Jindal Steel And Power Ltd
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Earnings Call Transcript

Earnings Call Transcript
2019-Q4

from 0
Operator

Ladies and gentlemen, good day, and welcome to Jindal Steel & Power Limited Q4 FY '19 Earnings Conference Call hosted by IDFC Securities Limited. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Ashish Kejriwal. Thank you, and over to you, sir.

A
Ashish Kejriwal
Research Analyst

Yes. Thank you, Neil. On behalf of IDFC Securities, we welcome all to the Q4 FY '19 earnings call of JSPL. So we have the senior management with us. And now without any further ado, I'll request Mr. Nishant Baranwal, Head, Investor Relations, to take it forward.Over to you, Nishant.

Operator

I request all the participants, please stay connected. The management line has been disconnected. We are getting them back to the main call.[Technical Difficulty]

Operator

Ladies and gentlemen, thank you for your patience. We have the management line connected.Mr. Nishant, go ahead.

N
Nishant Baranwal
Head of Investor Relations

Sure. Good day, everyone. We would like to welcome you today to JSPL's Fourth Quarter and Full Year FY '19 Earnings Release Call.Before we start, we would like to congratulate you for the highest ever revenue and EBITDA for FY '19 for your company in the history of JSPL.Today, we have with us our Joint Managing Director, Mr. N.A. Ansari; our MD and CEO of Power, Mr. Bharat Rohra; our CFO, Mr. Deepak Sogani.Not losing much time, I will request Mr. Ansari to start with his opening remarks. Sir, please.

N
Naushad Akhter Ansari
Joint MD & Additional Executive Director

So good afternoon to all of you and a very warm welcome to this interaction. I'm very pleased to share our -- the highlights of our performance.To start with, on a yearly basis, if we look at our stand-alone revenue, this is up by 58%, stand-alone EBITDA is up by 51%, consolidated revenue is up by 41% and consolidated EBITDA is up by 30%. And also at the same time, our net debt is also reduced substantially by more than INR 4,000 crores. And Oman has also produced the highest in the fiscal year.If you look at fourth quarter performance, in the fourth quarter, it is actually a milestone for us because the company recorded its highest ever steel production in aggregate and also individually across all its locations. So stand-alone production went up by 19% to 1.51 million tonnes, which is already more than 6 million tonnes exit rate, and the sales of the second phase along with that.The Angul production post for the year, it is up by 92% to 2.25 million tonnes. And the company, the blast furnace in Angul is actually operating at a very good rate, close to about 10,000 tonnes per day, and it has started ramping up gradually.In terms of our top line, the JSPL stand-alone is also the highest ever, INR 7,402 crores, up by 29% year-on-year basis. This is under deck of high volumes we have [ exhibited ] in India. And despite the steel prices in this quarter being quite low, our EBITDA has been reasonably good. It is INR 1,440 crores, marginally down on a year-on-year basis.The value -- the good thing is that the value-added products are close to about 62% of our product portfolio.The pellet sales was about 0.79 million tonnes during this quarter. This is again up by 6%. If I look at full year FY '19 performance, stand-alone -- on a stand-alone basis, our production has gone up to 5.25 million tonnes, which is 31% up, and the sales of those, of course, kept pace.Now if I also look at overall EBITDA, despite the prices going up and down, the EBITDA has been fairly good. It is INR 6,017 crores, it is up by 51% year-on-year basis, so this is really quite a good number. Pellet continues to be a steady business vertical, and it has been performing reasonably well.If you look at it on a global basis, Oman, during this quarter, has done first of all 0.45 million tonnes, which is almost similar to the last quarter on a year-on-year basis. And of course, in Oman, the prices, they came down substantially, the global prices they are down, and that's the reason why the EBITDA is -- Oman is lower compared to the earlier number.Mozambique mines has produced substantially more, 0.52 million tonnes ROM in this quarter. This is up 57%, and the yearly production went up by 19% to 1.71 million tonnes.And Australia, during this year, produced about 49,000 tonnes in this quarter. And of course, in Australia, there had been issues in terms of despite all the efforts we've done there, the fact is that the Wongawilli mines have been at the moment placed under care and maintenance in this quarter. So if there are any questions on that, we can take it during the question-and-answer session.And if you look at the consolidated performance, we have still produced 1.95 million tonnes of steel. That is up 14%. It's almost close to about 8 million tonnes of production on a consolidated basis, and of course, this is all the same [ volume ].And the consolidated revenue is also up by 18% to INR 10,159 crores. And EBITDA is also up -- EBITDA is INR 1,845 crores. Obviously, it's a [indiscernible] down because of the international depressed rate there.So by and large, I would also like to tell you about the steel business, what's happening. If you look at the world steel predictions which are there, overall, we expect the world steel demand to go up by more than 1% -- 1.3%, actually. That's the kind of number we [ settled in ]. And as far as India is concerned, we expect it to be close to about 6.5% to 7% growth that is continuing.The China demand growth is also expected to be there, following the progressive number, close to about 1%. And of course, we are very closely watching what's happening in U.S.-China trade tensions and taking all actions related to that in terms of what protections are required, et cetera, so that the -- our Indian Steel Association is all taking up the issues with the Ministry. And we are very sure that if there is anything untoward which is to happen, the right action will be taken by the Ministry.And of course, the iron ore prices have gone up primarily because of the [ oil ] incident which is there. And even though most of the year, it was somewhere close to between $65 to $70, it went up substantially and now currently, it is -- anyway, it is [indiscernible]. But once this issue of supply of [indiscernible] starts becoming better, we are sure that these prices will also come down.But what's also going to happen is that because of this cost [ switch ], we expect the steel prices to be much better than [indiscernible] this quarter there. So that's something we do only [indiscernible]. The cheap prices which currently are showing the downward trend, we expect this to come up very, very positively.Now as in India with 7.5% steel demand growth. And obviously, there is not so much of capacity being built in the same [ time frame ]. We expect that the demand will remain very robust. And with this demand robustness, the balance of [ sheet ] should indeed improve substantially.One issue which currently is taking at the moment of liquidity, we expect that soon after the election results are over and [indiscernible] in a month or so the liquidity should [indiscernible]. So this is what we look at. So we think that this is what's going to happen to the steel business. And we're actually very, very hopeful that in this year, the results should be far, far better.And now I hand over to Mr. Bharat Rohra for his [ report on Power ].

B
Bharat Rohra
MD & CEO of Power Business

Good afternoon, everybody. I'll talk about the performance of the fourth quarter, and then I will go on to the outlook for the Power sector after that.The performance of the fourth quarter of the year '18, '19 for JPL had seen a flat performance, and the generation has been clean as in, in previous quarter at 2,609 million units. Internal [indiscernible] has increased marginally from INR 980 crores to INR 999 crores, and the EBITDA has marginally dipped from INR 273 crores to INR 267 crores.So with these numbers, I'll go on to the outlook for the power sector, which for the first time in the last few quarters appeared to be improving due to various positive steps initiated by the government.Over the last few quarters, immediately after the reallocation of mines, a large number of IPPs became [ unraveled ] and some of them stopped working on the power plants and have met them in the [indiscernible] stage. And those that were operating found it difficult to meet their obligations to the banks. Today, out of 77,000 megawatts of installed capacity in the IPPs, the 41,000 of these [ brands ] are in the distressed category. There are about 34 such IPPs which are in distressed list, and I'm proud to say that JPL continues its best efforts and continues to be counted out of this list.The government during the year '18, '19 set up a committee on securities to look into the stress in the Power sector and come out with measures to reduce the stress. The recommendations are positive and some of them are now under implementation.In line with these recommendations, [ NSPCA ] has come out with an [ mitigation ] tender for 2,500 megawatts to be sourced from IPPs who have FSAs, but do not have PPAs. JPL has offered 515 megawatts in this tender and has [indiscernible] in this tender.Another tender for 2,500 megawatts is being finalized, which shall be for sourcing power from IPPs that do not have FSAs and also do not have PPAs. This tender is likely to be floated by the [indiscernible] on similar lines as the [ NSPCA ] [ gradation ]. This will happen sometime in the month of June and JPL [indiscernible] is looking forward to [indiscernible] perform them in that tender also.There are also a few more tenders floated by [indiscernible] and Gujarat, and we are optimistic about getting some quantity in all these tenders. Now apart from the PPS, the availability of coal has seen a slight improvement, and the auctions held after December 2018 have seen a downward trend in these [ ranges ]. This is primarily due to the fact that the 5-year linkage auctions held for steel and other industries have now seen realization of coal, and helping the share by these industries in the spot actions has substantially reduced.Coal India has also been directed to offer more quantum of coal in special power auctions held solely by power plants, and due to all these steps, the price and the availability is better.As far as our operations are concerned in the current year, this year has ramped up generation from April 2019 to 1,700 megawatts, up from the average 1,400 megawatts that we used to operate in the previous financial year. This will improve our PLF from 34% to 50%. We plan to operate our [ plant ] at plus 50%. And as soon as the aggregation tender floated by NHPC starts in October this year, our PLF shall [indiscernible] upon the group.Another positive that I would like to share with you is that in end of March 2019, [indiscernible] has directed [indiscernible], one of our biggest customers, to start paying JPL for the [indiscernible]. And the settlement has been reached by which [indiscernible] has started paying [indiscernible] in installments.Further in another development, [ Bankapur ] has also started paying JPL dues due to escalation, which we had filed last year. And this is only directed only on the [ ICO ].So with these positives, I would like to hand over to our CFO, Mr. Deepak Sogani, for his message. Thank you.

D
Deepak Sogani
Chief Financial Officer

Good afternoon, everybody. I'm pleased to present a very strong set of financial numbers for the year ended FY '19 and for the fourth quarter ended FY '19 as well.To go to the headline of the numbers. On the revenue side, the consolidated revenues have grown by 41% on a Y-o-Y basis, FY '19 versus FY '18. Similarly, stand-alone revenues have grown by 58%. Our production has grown on a yearly basis at 32%. Stand-alone production has grown by 31%. And let me highlight that production of Angul, which has grown by 92% from FY '18, and the plant is now fairly stable and should be able to ramp up meaningfully in the coming year, in FY '20 as well. Similar story on the EBITDA side, consolidated EBITDA grew by 30%. stand-alone EBITDA grew by 51%, so remarkable financial performance as well.Now let me -- after covering the highlights of the revenue production and the profitability, which are all in line with our expectations, let me just kind of give a little bit of color on our financial profitability in that in the current quarter, we have seen significant improvement in our cost of producing the steel. We've been mentioning that we are driving certain operational efficiency initiatives in our Angul plant in particular, but both in Angul and Raigarh, if you will.And second, from an operational efficiency point of view, we had said that as Angul ramps up, we will start seeing lower cost of production of steel over there. So I'm happy to report that Angul already is producing steel cheaper than Raigarh today. In the last quarter, that is Q4 of FY '19, we have seen about INR 800 per tonne efficiency benefits coming in on the cost of production of the field site, both from operational efficiency initiatives as well as from the ramp-up led efficiency initiatives in Angul. And as we have been saying that we will see a total of around INR 2,500 to INR 3,000 per tonne cost of production improvement as Angul ramps up.So we are expecting that in the current year, we should be able to see more of the cost-led efficiency that we will see in the business. Somewhere around INR 1,500 to INR 2,000 per tonne would be the ballpark estimate of additional efficiencies that will come in, in the cost of producing the steel, in both accounts as Angul ramps up, over INR 1,000-odd will come from there. And in relation to that, we will be having -- kind of embarked on several operational efficiency projects, which will help us improve our mill yields, which should help us improve our production throughput from the mills. And many of these initiatives will again deliver value in terms of reduced cost of producing the steel.So I think I would just like to say in my financial commentary that we have started delivering improvement in our cost of production, and we would like to say that in the coming year, further improvement in the cost of production of the steel is on plan there. So I think that's one important commentary that I'd like to leave behind.Second important commentary on the financial color is that our product mix is improving. Already, we are doing a fair amount of rail and structures business. And as we kind of go into the next year and as we improve our volume, our product mix will become richer, and we will obviously strengthen our value-added steel mix as well. So in this comes the various initiatives that we are taking up in terms of increased volume that is coming our way and the improvement in the product mix that is planned, ballpark, about INR 1,000 of NSR improvement is being factored into our next year's workings on these factors. So as I mentioned, irrespective of the market volatility and the pricing, about INR 2,500-odd of structural internally controlled initiatives are underway, which should flow in quarter-after-quarter. So that's the broader construct based on which we should deliver the results in the coming year, if you would.Now let me kind of add on a little bit of commentary on some of the items that have been reported in the financials. The first and foremost we would like to report that as you're aware that our Australian mine, which was [ Wongawilli ] had been shut down. And as a management team, we have taken a view on the valuation of the mines. The carrying cost of the mine valuation, Australian mine valuation, was AUD 750 million, and we have taken an impairment -- to be on the conservative side, we have taken an impairment of AUD 252 million, totaling to INR 1,260 crores. So that's one provision that we have taken, which gets reflected in the reported depreciation numbers, which you see that depreciation numbers that have been reported are INR 5,480 crore. That factors INR 1,260 crore of operational depreciation on account of impairment that we have taken in the Australian business due to the mine devaluation, downward revaluation. So that's one commentary.The second commentary that I'd like to give is on the exceptional items. We have reported on a stand-alone basis INR 1,650 crore -- INR 1,654 crore of exceptional items, which are primarily full levy advances that will line in our books of INR 1,274 crore based on the fact these were payments that were made long time back based on the Supreme Court judgment for a payment. These are paid in December 2014. Given that we were obviously contesting them and given the fact that there's been no movement in the last 3 years, we have decided to provide for them in the profit and loss account.Similarly, there is a charge of INR 308 crore pertaining to electricity duty for our Raigarh plant. This pertains to certain benefits that were promised by the Chhattisgarh government to us in 2007. There was an MOU signed with them, by which they had given us various industrial incentives, including electricity duty exemption for a certain period of time. However, the government in 2013 reduced the benefit in our -- from retrospective effects for large industries, which we have been contesting. We believe it is discriminatory. However, again, there has been no progress on the matter in the last 3 years. To be on the prudent side, we have taken another INR 308 crore charge over there.Then there's 1 plant in Barbil, which is a producer gas plant, it's a small plant. The total cost of the plant was around INR 100 crore. This plant had -- initially had some teething trouble, and we were operating it, but then we figured out that the right configuration for running this plant required coal of high grade and high cost, and therefore eventually the plant was shut down. Again, for the last 3 years, we have not been using this plant, and therefore we have taken an impairment of this plant of INR 71 crore net of salvage value of the plant. So these are all noncash expenses pertaining to cash outflow that has happened many, many years back. Similarly, we have taken -- in the consolidated side, we have taken an INR 81 crore charge in the power business, again, pertaining to the full levy matter, right?So that's a quick commentary on exceptional items. I think I would like to leave behind the thought that these are all noncash, and these are cash outflows pertaining to these items that happened several years back. This is a part of strengthening our balance sheet and taking a more consistent, conservative view on the accounts that we are pursuing this. Obviously, it also helps us to manage our [ CapEx ] more efficiently as we take this up.Now let me also give a commentary on a couple of other items. We have been in multiple conversations with all of you every quarter and in one-on-one investor meetings, analyst meetings. And I would just like to kind of say that on some of the main items where we have made certain commitments to you, how have we delivered on the macro commitments that we have made to the investors and to the analysts, right? So the first commentary in line of what we have said and what we have done, right? The first is that we said that Oman, that our Indian business will improve its production very significantly. We will ramp up significantly and volume will be the key driver for our financial results. So that's indicated. We have grown our Indian volumes by 31% and consolidated volumes by 22%. We have said that we will improve the production capacity in Oman from 2 million to 2.4 million tonnes. That again has been delivered right on time, in December of last year, that was also commissioned, and we are hoping that the benefits will start coming in, in the current year.Second, we have said that we will see significant improvements in our cost of producing the steel, that Angul will produce cheaper steel than Raigarh. Again, that is a reality. Angul today is producing steel cheaper than Raigarh, which used to be INR 2,000 more than Raigarh, right? So that's again one standard feedback that we use to give the investors, and we are accurate on that as well. We have been saying that our product mix is improving, and it will improve our profitability. Obviously, the market prices of steel will be volatile. But true to what we have said, our rail mix, our structural mix and value-added mix has actually gone up and will further go up. So again, I think that's the business model that we have been sharing with you, and we have been delivering on that as well.The next in line has been our main focus on deleverage. We have said that we will deleverage by INR 12,000 crore in 2 years, FY '19 and FY '20. We said that this will be comprised of 2 components: INR 9,000 crore from operational cash flows and INR 3,000 crore from monetization and divestment related initiatives. So this year, we have deleveraged INR 4,000 crore from operational initiatives through operational cash flow. And next year, we are in line for divestment -- for deleveraging about INR 5,000 crore from operational cash flows. So that will make it around INR 9,000 crore deleverage from our own internal operational cash flows.We have been -- we are obviously in the process of divestments in Africa, so we are in the process of divesting our Botswana assets. We hope to realize maybe $150 million to $200 million from there. The process is going on. There is an iron ore mine in Africa, which is also in the process of being divested. Again, it can fetch anywhere around $100-odd million. And we are in the process of monetizing part of our business in Oman, which can again deliver maybe $200 million to $300 million. So all of these are mature projects, and we are very hopeful that in the coming year, we will be able to deleverage our debt to the extent of INR 3,000 crore through nonoperational cash flow-related initiatives. So therefore, we will be on track to deliver our deleveraging thesis of about INR 12,000 crore.Then next in line, we've been saying that on the debt side, let me also kind of add that our net debt-to-EBITDA leverage ratio, we've been saying that we are very focused. We want to reduce our net debt-to-EBITDA very significantly. And I'm pleased to say that as we have been saying that the preferred method to EBITDA target for us is around 3. On a stand-alone basis today, at the end of FY '19, we stand at net debt-to-EBITDA of 3. Last year, the same number was 5.36. So as a team, we have been focusing on net debt-to-EBITDA as the key driver for our business.Similarly, on the consolidated side, our net debt-to-EBITDA reduced from 6.55 to 4.65. And in the coming year, in India, on a stand-alone, our net debt-to-EBITDA should be closer to 2, and globally, it should be closer to a little over 3. So I think on the main leverage issue and on the deleverage, which has been a concern of the Street and has been a key management initiative, we have done our best to deliver, and we are hoping that whatever we have committed will get delivered in the coming year as well.Next, we've been talking about CapEx. There was a lot of obviously several questions on multiple calls and meetings on the CapEx. We have been saying that our CapEx, we have completed our main CapEx cycle, and very limited CapEx should happen every year. We have been saying that our CapEx should not exceed INR 1,000-odd crore. So I'm happy to report that in the current year, our CapEx has been in the zone of INR 1,000 crore in total. And the cash CapEx has been lower. The cash CapEx, in fact, has been lower, and the cash CapEx figure is INR 460 crore. So the total CapEx this year is INR 1,088 crores, and the cash CapEx figure is 416 -- INR 460 crore. Balanced money was used to repay the previous supply-related CapEx. So ballpark, our CapEx is also very much in line with what we have kind of indicated to you.So with that, I would like to close my initial commentary, and we can open.

N
Nishant Baranwal
Head of Investor Relations

So thank you, sir. We now open the call for questions. But before we open the call, my small request, please ask more strategic questions. We at IR, myself and Gaurav, are always glad to help you with the data questions. With that, operator, we can open it for the questions.

Operator

[Operator Instructions] The first question is from the line of Amit Dixit at Edelweiss Securities.

A
Amit A. Dixit
Financial Analyst

I have a couple of questions. One is on the impairment loss, the impairment that you've taken in Australia. So the carrying costs is AUD 750 million, as you mentioned, and the impairment cost, AUD 252 million. So point a, is there a possibility of taking further write-downs on this? Or going ahead, if the prices improve, do you see that there's a possibility of writing that as impairment charge?

D
Deepak Sogani
Chief Financial Officer

So based on the detailed evaluation done by the management team, including the Australian management team and the corporate management team, we felt the AUD 252 million was a fair impairment. Number two, we are working for certain license renewals and approvals in Australia, which are likely to come in this fiscal, which will obviously improve the value of the business over there. Further, we have certain land assets there, which are fairly monetizable and a fair amount of monetary value as well. So based on monetizable assets, based on improvements that are possible in terms of the licenses that are going to come, we believe $500 million appears to be a fair carrying cost at this point in time.

A
Amit A. Dixit
Financial Analyst

Sir, the caution or the main concern is that you had a very decent production uptick from this mine in this year also so can't understand the operational difficulties that actually falls off to take this impairment charge.

D
Deepak Sogani
Chief Financial Officer

Well, so the main reason as we had mentioned on my opening commentary, as I said, that due to certain regulatory reasons, the Wongawilli mine has been shut down for the time being, and we have to obviously work to kind of bring it back to the production level. And on account of the shutdown of the mine and on account of the other regulatory challenges that we are trying to deal with at this point of time in respect of the Wongawilli mine, we have decided to kind of take a look at the carrying cost of the assets in Australia.Also as is [ within ] the other parts of the financial reporting, we have started taking a sharper look at our financial reporting to make it more conservative and improve the health of the balance sheet. So in line with the larger objective to kind of strengthen the balance sheet and take a conservative view, we have kind of decided to take this impairment. Currently, we do not feel that there is going to any further impairment based on the information that is there, so it looks like a fair assessment.

A
Amit A. Dixit
Financial Analyst

Okay. The second question is on the interest cost that we have. Basically, the high interest cost were INR 276.2 crores that is provided on advanced receipt from JPL. So just wanted to understand the rationale of the same and how much more we can expect in ensuing quarters and whether the transaction has been consummated or not.

D
Deepak Sogani
Chief Financial Officer

So as you're aware that there was an advance given to JPL of INR 2,700 crore, right, to divest the captive power plants from our steel business into JPL. And when we evaluated it closely, we figured out that there will be -- post-GST, there would be tax leakages if we were to divest those captive power plants into JPL. And therefore, we have decided not to [indiscernible] the captive power plants from JSPL into JPL and to -- and therefore, the advance that has been paid from JPL to JSPL has been converted into an interest-bearing advance. The INR 270 crore that has been charged off in the fourth quarter pertains to the annual interest for this particular advance. So in the coming FY '20, INR 270 crore will be the full year additional interest payable to JPL. Obviously, in the consolidated financials, these -- and these will get knocked off.

A
Amit A. Dixit
Financial Analyst

But this INR 270 crores you are saying will come again in FY '20.

D
Deepak Sogani
Chief Financial Officer

This will be in the full year.

A
Amit A. Dixit
Financial Analyst

Full year.

D
Deepak Sogani
Chief Financial Officer

This was a quarterly charge, which was taken for the full year in the fourth quarter. Then in each of the 4 quarters, INR 270 crore will be the annual charge.

A
Amit A. Dixit
Financial Analyst

But sir, if the transaction is not going to happen, then why are we continuing this advance? Why can't we return that advance and finish it once and for all?

D
Deepak Sogani
Chief Financial Officer

No. Obviously, we would like to -- based on cash flows and based on the lenders' approvals in the steel business. Eventually, at some point of time, that will have to be done. But for the time being, after having taken the management decision that we will not [indiscernible] the captive power plants to JPL, this was the most prudent thing to do to start paying interest to JPL on this matter. And also we have been sharing bits and pieces, and our goal is get in the process of creating a view on the matter, but we are contemplating restructuring of our business into 2 different businesses, the steel and power business. So hopefully, when we carry out that exercise at that time, we will be able to settle and take care of this advance as well.

Operator

The next question is from the line of [ Jamesh Fadhi ] from [Principal Asset Management Company ].

U
Unknown Analyst

Sir, could you just update on the Oman asset sale? It's been taking longer than what we had expected earlier. So where are we placed as of now? And by when should we expect this to get consummated?

D
Deepak Sogani
Chief Financial Officer

So obviously, we have been saying that we will work on our monetization event in Oman. And as reported to you on the last call and in various other intermediate conversations, that project is going on. It's a mature project, and we are hoping that it will deliver cash in the near term. However, as you're aware that the prices in the beginning has turned softer, and our financial results in that region have kind of come down a bit. Given that, there are conversations going on with the investors to realign them with the current financial outlook of the business, post which we will be able to conclude this transaction.

U
Unknown Analyst

But would you like to give any time line now because we were earlier expecting it to happen by March, now it's probably the first quarter results so kind of just the 1 month away. So can we expect it to happen this quarter or it could get delayed further?

D
Deepak Sogani
Chief Financial Officer

I think we are working on the project, it's -- I would say that it's almost 80%, 85% done. In the next 1 or 2 months, we should be able to take a final view on the project and deliver the project.

U
Unknown Analyst

Okay. Fine, sir. And sir, secondly, on the Sarda Mine case, if you can share anything, next hearing on that.

B
Bharat Rohra
MD & CEO of Power Business

Yes. So on the Sarda Mine matter obviously we -- our main interest there is ensuring that...

N
Naushad Akhter Ansari
Joint MD & Additional Executive Director

[indiscernible] So let me answer this question. So as far as Sarda Mine is concerned, this case, which was there for our iron ore/fines, which are lying -- the almost 12 million tonnes of fines, which are lying there. We were expecting this case to be opened in the month of May. But Supreme Court decided that this case will be taken up only after the rotation is over. So we are very hopeful that in the month of July, minus the quarter events and this case comes up, we should be able to get this clearance very soon. And once that happens obviously I mean that's really -- it's going to be very good for the organization, for the company. So that's as far as the -- that's for the iron ore, which is there. There's another case, which is directly between Sarda Mines and the government. And that's something, which we really don't want to comment at the moment.

Operator

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

R
Ritesh Shah
Analyst

Sir, first question is on the power operations, you indicated a lineup of potential PPAs. Can you please highlight the quantum and the time line for each of the ones that you indicated? It will be a bit of a repetition, but I think it's -- this is something which is more exciting for JSPL going forward.

B
Bharat Rohra
MD & CEO of Power Business

Yes. Sure, Ritesh. I'll do that for you. You see, the largest PPA quantum that we have got is for 515 megawatts in the aggregation tender brokered by NHPC. Now NHPC is in the aggregation mode. They are talking to the DISCOMs. And once they are through with the aggregation quantum of 2,500 megawatts, next month, they will come back to us, and then they will start signing the PPAs with various generating companies. So there is 515 megawatts that we are trying over there. Apart from that, in the short term, in the last 2, 3 months, we have been doing PPAs with [ Torrent ], with UP, with Bihar, and we have done it at good prices but all those for a short term. In the long term, this NHPC is there, then there's another tender from Bengal, which is in the medium term range, that we have to submit the bids next month. There's another 3,000 megawatt tender from Gujarat, which is on a long-term 25-year basis. There again, we have to submit the price bids in the month of June. So these are the tenders which we are working on.

R
Ritesh Shah
Analyst

Sir, this is helpful. Sir, Gujarat, you said, 300 megawatts. What is the kind of competition that we are expecting over here? And I'm presuming this is for Gare Palma wherein we will have some advantage.

B
Bharat Rohra
MD & CEO of Power Business

Yes. Gujarat, it is 3,000 megawatts. Bengal is 300 megawatts.

R
Ritesh Shah
Analyst

Sir, I think Gujarat was 9,000, out of which 1,000 was for Gare Palma, so please correct me if I'm wrong.

B
Bharat Rohra
MD & CEO of Power Business

So there are 3 tenders issued by Gujarat for 3,000 megawatts each. But as far as our understanding goes, they are trying to determine which is a route which is going to be cheaper. So at the end of it, they will go in for only 3,000 megawatts. And as regards Gare Palma, they want 3,000 megawatts from there also and we being located in such a way that nobody can beat us on the price, which we are going to bid over there.

R
Ritesh Shah
Analyst

Okay. So sir, just to verify, this is 3,000 megawatts corresponding to Gare Palma and Gujarat. Is that right?

B
Bharat Rohra
MD & CEO of Power Business

You see, Gujarat has issued 3 separate tenders of 3,000 megawatts each. In 1 tender, they are saying that it has to be with a person who owns a mine. In another 3,000 megawatt, they say with FSA coal. In another one, they say with Gare Palma coal. So they're trying to determine which is best for them. In totality, they need about 3,000 megawatts only, they don't need 9,000 megawatts. And I feel that the Gare Palma one is the one in which they will be going forward, yes. And we are trying to give them at least 1,700 megawatts from our plant in that tender.

R
Ritesh Shah
Analyst

Okay. And sir, Bengal, you indicated, what is the contract over there?

B
Bharat Rohra
MD & CEO of Power Business

That is 300 megawatts. That is a medium-term tender for 3 years.

R
Ritesh Shah
Analyst

300 megawatts, 3 years. Okay. Sir, I have a couple of questions. We have -- under other comprehensive income, we have factored a revaluation gain. I understand it's under other comprehensive income. This is for 2 of the overseas subsidiaries. What is this regarding to?

D
Deepak Sogani
Chief Financial Officer

Yes. So these are pertaining to a business in Shadeed where the business has been revalued, the assets have been revalued. But they have directly flown to the reserves and surplus through the OCI route, and there have not been [ duplicates ] through the profit and loss account. So our only entry that has passed through the profit and loss account is for the impairment of Australia. So that one and the Mozambique business. In both these businesses, based on the valuation of the business today, there has been an uptick in the business valuation, which has come into the OCI route.

R
Ritesh Shah
Analyst

So is it possible that you can break up this INR 4,395 crores because there's no cash flow impact? Is this something to do with the covenants that JSPL has?

N
Nishant Baranwal
Head of Investor Relations

Ritesh, I can provide you that data off-line.

R
Ritesh Shah
Analyst

Okay. Sir, third question. I think more from a business perspective...

N
Nishant Baranwal
Head of Investor Relations

Ritesh, I'm sorry, I'm really sorry, but we've got a long queue. Thank you.[Operator Instructions]

Operator

[Operator Instructions] The next question is from the line of Ashutosh Somani from JM Financial Limited.

A
Ashutosh Somani
Research Analyst

Sir, if you could throw some light on the debt side of Australian operations. So I believe the debt is close to USD 600 million. So ex of JSPL, Mauritius, there's $400 million of long-term debt. So what is the interest rate that we can be charged on that? And are there any covenants that get breached because of the changing outlook in these operations going forward in terms of net debt-to-EBITDA?

D
Deepak Sogani
Chief Financial Officer

So sure, I think for the debt breakup in the international business side, in Mauritius, we have around 765 million of debt.

N
Neelkanth Mishra

Sir, I'm just talking specifically about the Australian operations only.

D
Deepak Sogani
Chief Financial Officer

India -- Australia, that is a super debt where around $400 million of debt is outstanding, [indiscernible] that is outstanding. And your second question is that whether based on the current operating conditions over there, is there an impact on the loans or any covenants are getting breached.

A
Ashutosh Somani
Research Analyst

Correct.

D
Deepak Sogani
Chief Financial Officer

So that's not -- there is no such impact. All the interest that we'll have -- we have been paying interest and the principal on scheduled time. So there's no real breach of any covenant on those.

Operator

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

A
Atul Tiwari
Vice President and Analyst

Sir, on -- in your consolidated P&L, your finance costs have been kind of inching up through the 4 quarters of this year, while your consolidated net debt has been coming down. So could you throw some light on that? Why is finance cost going up while debt is coming down?

D
Deepak Sogani
Chief Financial Officer

So there are 2 main drivers. One, obviously there is an upward movement in the interest rates. So the [ CLR ] of the bank has been going up, and therefore there is an uptick into the interest costs. Second, while we have been repaying the debt, we are -- the interest costs that we are reporting also factors in the interest pertaining to the LC discounting that we do on the customer receipt side. So as the business is growing, we obviously do our business primarily on LC basis. And as our revenue grows, the LC discounted, a portion also is going up and the interest charge is pertaining to such LC discounting, also gives an increase in the interest costs. So the deal -- fixed in the interest cost and obviously on the reduction side, we have -- obviously, the debts have been repaid and partially the interest costs have come down.

A
Atul Tiwari
Vice President and Analyst

And sir, just one more. You mentioned INR 2,500 per tonne EBITDA increase, which is possible because of Angul ramping up and various cost initiatives that you are taking. How should we think about this number? What is the base? Should we assume FY '19 average EBITDA as the base or fourth quarter EBITDA as the base? And does it apply to the full business or only Angul, and by which quarter it will be apparent in your numbers?

D
Deepak Sogani
Chief Financial Officer

So as we -- as I mentioned in my opening comments that we have seen improvement in our cost of producing steel to -- on account of operational efficiencies of about INR 800 per tonne in the fourth quarter. And the balance, as we are talking about, around INR 1,700 to INR 2,000 additional EBITDA per tonne improvement is on the basis of fourth quarter onwards, right, so whatever is there in the fourth quarter thereafter. In FY '20, we should be able to see around INR 1,800 crore of EBITDA per tonne improvement.There are various factors driving it, as I mentioned in my opening comments. Clearly, there are operational efficiency initiatives that are in play right now, which will help us improve our throughput, which will help us improve our mill yields, et cetera. And as Angul ramps up, we will be able to get better cost reduction from the Angul plant. Further, we are completing our balancing projects. One of our coke ovens batteries is likely to be commissioned in October, and our new oxygen plant will come up in Angul in August. So based on reduced costs on account of coke, oxygen and operational efficiency parameters through the next year, we should be able to see INR 1,800 per tonne improvement on a blended basis, not just Angul but in both the plants put together. There are operational efficiency initiatives that are also being driven in Raigarh.

N
Naushad Akhter Ansari
Joint MD & Additional Executive Director

So to further add to it, so there are multiple levers by which we are actually bringing down the costs. So what Mr. Sogani already mentioned about the coke cost coming down as well as oxygen cost coming down because we have our own coke and oxygen, so that's obviously very substantial. And on top of it, the blast furnace cost is definitely going to come down substantially because we continue increasing our PCI rate and cutting down the coke requirement, and that's a very, very important lever by which we'll cut down our hot metal cost and consequently the steel cost.Also as we increase our volume, which is the ramp-up is going on very well, so as we continue increasing the volume, our cost is going to come down substantially. And on top of it, there are many other initiatives, which have been taken within the organization in terms of improving the yield of various parameters, also looking at -- there are several improvements, which are -- improvement initiatives, which have been taken, looking at what is the best product to be made. And importantly, we release [ it out to ] include the margin. So there are multiple levers, and this INR 1,800 number, which the CFO has talked about, is certainly very much doable.

A
Atul Tiwari
Vice President and Analyst

So if you can allow me just one counterpoint on that one. So if you could, should we assume these benefits becoming apparent in your quarterly numbers from first quarter onwards? Or will it be more back ended in FY '20? That's one. And the second thing is, all the initiatives have been happening in the background, but the impact of this was not visible in your EBITDA per tonne number in the fourth quarter numbers. So if you could shed some light on why it has not happened in the fourth quarter.

N
Naushad Akhter Ansari
Joint MD & Additional Executive Director

So EBITDA per tonne number obviously is a lot of it is also market-driven, and that's something which is there. So therefore, you'll see that quarter 4 NSR has actually come down almost by about INR 2,500. Actually, INR 2,800, it has come down. Part of it we have been able to cover up by improving our cost, close to about INR 800 or so -- actually, closer to about INR 1,200 is what we have covered by our cost improvements.But there -- but obviously, the completing per tonne recovered only by cost. But the very fact that this improvement is happening and that cost improvement has taken place, that is all we have been able to maintain this EBITDA close to about INR 10,000. And that's what we're really talking about. So maybe there's a marginal reduction out there. But going forward, we certainly see the benefits coming, and already the benefits are there from the cost improvement point of view, and also it will continue happening in the future also. There is absolutely no doubt in my mind.

A
Atul Tiwari
Vice President and Analyst

So in FY '20, it will be the second half or starting from the first quarter, we can start seeing some of these benefits coming through.

D
Deepak Sogani
Chief Financial Officer

There are 2 kinds of operational efficiency initiatives. One is driven by the volume of Angul. As Angul ramps up, we will be able to see more and more cost reduction happening in Angul. That will happen as and when Angul is kind of ramping up in the full year. And the other is basically operational efficiency initiatives. As Ansari mentioned, which deal with throughput improvement, et cetera, et cetera. Those will flow through the year, and they will perhaps happen more in the earlier part of the year because many of those projects are mature.So if you ask me my view on INR 1,800 crores, INR 2,000 crores EBITDA per tonne improvement, as in the last quarter, we have been able to deliver INR 800 per tonne improvement in the cost of producing the steel through various initiatives. I would pretty much say that INR 500 to INR 700 per tonne per quarter could be the ballpark improvement that can happen in FY '20 in each of the quarters, yes?

Operator

[Operator Instructions] Our next question is from the line of Bharat Subramanian from Sundaram Mutual Fund.

B
Bharath Subramanian
Fund Manager

Just a question on the realization. I know we see a [indiscernible] of blended rate additional growth of [ INR 500] a tonne plus between 3Q to 4Q. If you'll just guide us in terms of is there any adverse mix impact. And going ahead, how should we see between -- another Q4 exit to, I think, balance sheet in terms of realization. What's in the markup? And in terms of mix, would there be something markedly different than the current year compared to how we exit FY '19?

N
Naushad Akhter Ansari
Joint MD & Additional Executive Director

So if you look at this product mix, which is there in this quarter, the product mix obviously has improved substantially. I mean compared to the earlier product mix, we have already increased by 50% these special products, the value-added products is what we have increased. So we have -- currently, we are close to about 62%.Now one of the items, which are there, and this is also the rail. And the -- let me also elaborate a little bit on this rail business. So we entered into this rail business close to about a year back. And that rail, once we have that entry -- for the entry obviously this rail profitability was almost at a similar level as what was there for the structures, which are happening. But the good thing is that the new orders which are coming, once we have already got this entry, the new orders which are coming are almost 20% at higher ASR compared to the original rail price. So therefore, you will see the impact of this going forward. The impact of this will be very substantial on our EBITDA per tonne in the coming quarters and months because this is a very, very substantial jump as far as the rail prices are concerned.And also we have taken several initiatives to improve our rail productivity in the [indiscernible]. And that's also another thing, which is going to help us substantially in this. So in the coming quarters and year, the rail is going to be one fundamental thing, which should help us. On top of it, we are also pushing for the plates -- [ plates business ] and [ blade business ]. There are several grades which we are developing, and we have already started getting into the market, and we also see the positive impact coming from the plates business also in the quarters to come.

B
Bharath Subramanian
Fund Manager

So just a count of your rail mill, could it for us would be -- at what levels of utilization? And so it's -- the one at Raigarh, these are not [ around ].

B
Bharat Rohra
MD & CEO of Power Business

So you're right. I mean the rail mill is at Raigarh. Rail mill, I will -- let me explain this. This is not just the rail mill. This is rail and structural mill, it's the combined mill, what we call. So even when -- at the time when the rails were not there, we were able to make structures order that melts. So we were able to utilize it to the extent we have this key.You see the way it was -- that earlier, our steel-making capacity was lower compared to our mill capacity. But now with Angul ramp-up, the steel availability has gone up substantially high. So now we are in a position to feed all our mills through almost 100% capacity. And so going forward also they're exactly the same thing we're also going to do for our rail and structural mill. There still are -- we actually call it RUBM, rail and universal beam mill. So this also we are pushing now for very high productivity.So therefore, this capacity, for example, today, earlier, the nameplate capacity used to be somewhere around 0.7 million tonne. Now we have already made more than 0.6 million tonne. It's close to about that is what we are already doing. And we actually want -- depending on what is the product mix which we're seeing, depending on how much -- what sections we are making and what rails we are making, that capacity varies according to that. But at the same time, we are also pushing now for increasing our capacity to almost close to about 1 million tonne. So that's the way that we are trying to push.So therefore, as I said, going forward, rail, which is going to be in high demand, we will continue to supply more and more rails. And that should certainly be a pretty big value driver product. And in the private sector obviously we are the only ones who can really do that at the stages the other supplier which we are then supplying. So I suppose that answers this question.

Operator

[Operator Instructions] The next question is from the line of [ Kamlesh Jain ] from Axis Capital.

U
Unknown Analyst

Sir, just one question on the part of your guidance on cost reduction. If I take Q4, your whole operations had operated at roughly around 88% to 90%. Sir, what kind is this cost reduction, further cost reduction? Then secondly, sir, in March you instructed that DRI at Angul. Despite knowing the fact that you have not had seasonally strong quarters and election has been there, so what [indiscernible] to restart the DRI plant?

N
Naushad Akhter Ansari
Joint MD & Additional Executive Director

So it is extremely important that this DRI plant was shut down. We wanted to make sure that we try out all our plants and make sure that all our [ services ] are operating very well. And there are -- this was a short-term experiment which we carried out, and we found that everything else is working because the plants, which are shut down for some time, it is important that we check it out, we make sure that everything is doing well and people are also in the practice of being able to operate it. So we tried that out. And also we had lined up for the coal for this, which we wanted to utilize the coal as well as pellet. So therefore, there was a good reason to do that.And the fact is that it still gives us some margins, but I think the better route is to keep pushing for blast furnace route until we have got our additional oxygen plant because the question was: that should we use this oxygen for improving the blast furnace operation or should we actually use some of this oxygen for the DRI route? And after trying this out, we decided that the better thing is to push for -- use this oxygen fully for the blast furnace route, and that is how we have decided.Now once the next oxygen plant is available to us by the month of August, then in September, we plan to restart our DRI, [ DRA ] route also and then make additional [ lever ] to all on that.

U
Unknown Analyst

Sir, is it operational now or back in the shutdown, sir?

N
Naushad Akhter Ansari
Joint MD & Additional Executive Director

No. At the moment, we have stopped it simply because we are -- as I said, that we really want to push for blast furnace, more and more productivity to be pushed out.

U
Unknown Analyst

And lastly, on the cost side, sir. Why are there guidance on further cost reduction despite 88%, 90% utilization levels at the whole in the fourth quarter?

N
Naushad Akhter Ansari
Joint MD & Additional Executive Director

So when you say 88% to 90% utilization, Angul capacity is 5 million tonnes. The fact is that we are still operating at much lower capacity compared to what it is. We really have a lot of headroom in Angul to keep pushing forward. And with that headroom, our cost will come down very substantially. So that's the way that we really look at it. We have a lot headroom in Angul to push for.

U
Unknown Analyst

To be honest, it's very unclear that what plans do we have at Angul plant because in one quarter, we restart the facility, in another quarter, within [indiscernible] for 2 months. We close, like we shut it down, then we like gave the guidance of a cost reduction but when we are first operating the blast furnace.

N
Naushad Akhter Ansari
Joint MD & Additional Executive Director

I mean it might look to you from that point of view, but the very fact is, as I was repeating, we have the other plant, the DRI plant as well as a coal gasification plant. We also wanted to test out that whether with lower amount of oxygen usage, whether it really works out and whether we can share this in both cases. And that's how we really tried it out to see that. And it was possible. As I told you, it was beneficial. But there was a more beneficial route, which was available to blast furnace. On top of it, we were also wanting to use certain amount of coke oven gas in there, in the DRI plant, and we actually tried that experimentation also with the coke oven gas.And based on that, we have also decided that next time when we operate, we are going to use much higher level of coke oven gas, and that's another process, which has already been started. And in September, once we start, we should certainly be able to use more of coke oven gas. And the whole idea, of course, is to maximize EBITDA, not just the production. And production, of course, we are obviously -- we should see that which route is actually giving a better EBITDA, and that's how we did it at that operation.It was a short-term experimentation. It was not something which was -- and also the very fact is that market was also very -- I've been talking about it that whether we are really going to start or not. So it was -- we also wanted to try it out, so there was -- there's nothing unclear about it as far as we are concerned. We had a very clear strategy about this.

U
Unknown Analyst

So sir, if you look at the data, Angul plant in the last quarter produced around 55-odd percentage of its capacity utilization.

N
Naushad Akhter Ansari
Joint MD & Additional Executive Director

Correct.

D
Deepak Sogani
Chief Financial Officer

So there's a lot of headroom remaining in Angul. So as Angul ramps up, efficiencies will come in and also the need for CGP, DRI will also kick in more when the volume process may be at threshold level.

U
Unknown Analyst

Yes, but that capacity has not -- because that capacity is attached to [ DRI ], and DRI is not operational. So we need to -- we would look to capacity integrated with the blast furnace not the DRI, which has not been operational for the last 1.5 years.

D
Deepak Sogani
Chief Financial Officer

Would you like to comment on CGP, DRI?

N
Naushad Akhter Ansari
Joint MD & Additional Executive Director

Yes. I mean you're saying -- you're questioning whether Angul is really adding 5 million tonne capacity or it doesn't add a 5 million tonne capacity. The answer to that is that it is absolutely clear to us that it has got this 5 million tonne capacity. If we have started -- you should be actually more confident now of this because we actually have started this. We produced it. We showed that it can actually produce. And then we decided that because there is a better route alternative, a better alternative available until a [ diesel oxygen ] is available. So therefore, it is something which is [indiscernible] proven. You should have not have any doubts at all that whether we can actually produce it.

D
Deepak Sogani
Chief Financial Officer

We are absolutely confident.

N
Naushad Akhter Ansari
Joint MD & Additional Executive Director

Yes. Absolutely, no doubt in that, that it can return. I'm saying, repeating it, that we actually proved it also. That this plant, that plant was operational. We saw it. It's not -- it is not which we have done because of any operation clearance, it's only because we think that we can make better EBITDA by using this oxygen through the blast furnace route at the moment than going through the CGP, DRI route. So that's the way it is.

Operator

And we will take the last question from the line of Rajesh Lachhani from HSBC.

R
Rajesh V. Lachhani
Analyst

Sir, I have a question really on the vendor realization. So if I look at quarter-on-quarter, there is [ trivial ] fall of close to INR 6,000 on the vendor realization. And this is coming at a time when our VAP, our value-added product mix was improving. So I just want to understand the reason for the same.

D
Deepak Sogani
Chief Financial Officer

So the actual, as you rightly said, on a blended basis, the realization appears to have dropped significantly. But in reality, the key NSRs had dropped by around 2,800 in the reported quarter. And as you're aware that we have fair amount of -- other than steel products, we have [ granite stones ], we have cement, we have power, we have pellets, we have iron ore, right? So for all these other products other than steel, we accumulate the EBITDA for all of them. And the total EBITDA that comes from them, that gets applied towards the source steel tonnage kind of resulting to the total EBITDA for the steel, et cetera, right? So the drop that you're seeing is on account of the accounting aspects letting through other than steel products, right? In the steel, that drop is around INR 2,800 per tonne.

N
Nishant Baranwal
Head of Investor Relations

Right. So before we close...

D
Deepak Sogani
Chief Financial Officer

So I just wanted to make a couple of comments towards the closing. One, there was a discussion around the Australian impairment, right? As we mentioned that to be on the conservative side, we have taken this impairment, but we are very hopeful that we'll be able to get the mining approval for the Russell Vale mine shortly. And if that happens, we can now obviously see a significant improvement in the valuation of the asset over there. So that's just to record over there that the Australian asset, the management team is quite focused and very hopeful that we will be able to turn it around and take it to the next level. I think that's the point number one.Point number two on the interest cost obviously I tried to answer the question saying that in the interest cost, there are 2 elements of uptick that has come in, one on account of the increase in the [indiscernible] which has led to an additional interest cost. But I also mentioned that interest cost bucket includes certain operational matter-related interest costs, which deals with the LC discounting for the receivables. And as the business is growing, some of that is also coming in, and therefore that increases the interest cost a little bit. But broadly, the interest cost, if you look at it, some of the -- from a quarterly perspective, the increase in the interest cost primarily has been on account of certain one-off and annual charges, which get repeated on a yearly basis, right? Okay.

Operator

I will now hand the conference over to Mr. Ashish Kejriwal for closing comments.

A
Ashish Kejriwal
Research Analyst

Thanks, Neil. And I would like to thank the management of JSPL to give us an opportunity for the same. I think sir, lastly, if you can highlight, we are still are maintaining our FY '20 steel production guidance of 6.5 million tonnes?

N
Naushad Akhter Ansari
Joint MD & Additional Executive Director

So as I said, in this quarter, we already done at the rate of 6 million tonnes. You have seen that more than 6 million tonnes. So 6.5 million is really no issue at all. We are absolutely confident that we'll beat that number, without doubt. But right now we are not raising any more expectations. We are just leaving it at that, at 6.5 million, but we are absolutely sure that we will be beating it.

A
Ashish Kejriwal
Research Analyst

Thank you, sir. Thank you very much, and any closing remarks you can give?

N
Naushad Akhter Ansari
Joint MD & Additional Executive Director

So what we really want, I really want to add is that we still have a lot of headroom as far as Angul operations and cost reduction is concerned. So that is one area where there's a lot of work happening. The other area is there's a lot of improvement happening all around in the plant and determining what is the product mix which is giving us the best EBITDA and how do we improve our mill productivity as well as the mill yield, et cetera, very substantial work is happening in that area.And the whole idea is that every week should really be better than the previous week, and that's the way we really work. We look at all the losses in terms of times now, not really in terms of hours but in terms of minutes, that's what is the time it was really launched and how do we really do that. So there's [ no issues ] as far as operational improvements are there within the plant, so that's another thing, which is there. And the third is the product mix that the rail, the new orders, which are there, as I said, they are at substantially higher prices compared to what it was earlier. And that should give us very good margin going forward. So all in all, we do expect that this year has -- this year, 2020, will be much, much better than any that we've had. Thank you.

A
Ashish Kejriwal
Research Analyst

Thank you very much. On behalf of IDFC Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.

N
Naushad Akhter Ansari
Joint MD & Additional Executive Director

Thank you, everyone.

N
Nishant Baranwal
Head of Investor Relations

Thanks a lot.