JTL Industries Ltd

NSE:JTLIND

Earnings Call Analysis

JTL Industries Reports Strong Q2 Performance with Growth Prospects Ahead

In Q2 FY '25, JTL Industries achieved a total income of INR 4,874 million, with an EBITDA of INR 377 million and a margin of 7.7%. Notably, sales volumes surged by 26% to 103,193 tonnes. For H1 FY '25, the company reported a record EBITDA of INR 815 million. The manufacturing capacity is being expanded to reach 1 million tonnes by year-end, driven by a new DFT plant expected to start trial runs by November. Looking ahead, the company maintains a guidance of 30% revenue growth for FY '26, aiming for 40% of total sales to come from value-added products.

Strong Financial Performance in Q2 FY '25

In the second quarter of FY '25, JTL Industries Limited demonstrated resilience, achieving a total income of INR 4,874 million. The company's EBITDA was INR 377 million, with a margin of 7.7%. Net profit after tax reached INR 264 million, translating to a tax margin of 5.2%. Remarkably, sales volumes surged by 26% year-over-year, reaching 103,193 tonnes. The increasing demand for their diverse product range, including value-added products, has been instrumental to this growth.

Record Half-Year Results

For the first half of FY '25, JTL Industries achieved a record EBITDA of INR 815 million, setting the highest performance for the period in the company's history. Total income for H1 FY '25 stood at INR 10,069 million, with a year-on-year increase in profit after tax of 7.1%, totaling INR 571 million. JTL maintains plans to enhance manufacturing capabilities to sustain this momentum.

Expansion and Technology Upgrades

JTL Industries is expanding its manufacturing capacity significantly. The total pipe manufacturing capability is set to increase from 680,000 tonnes to 1 million tonnes by year-end. The introduction of advanced technology at their Mangaon plant is expected to elevate their product portfolio by enabling the production of large diameter structural tubes, thus improving profit margins.

Outlook for Sales Volume and Growth

Looking forward, JTL Industries expects to maintain a robust sales volume growth trajectory of approximately 30% year-over-year, with targets of reaching between 440,000 to 450,000 tonnes for FY '25. This growth is anticipated to continue, with potential 30% increases projected for FY '26 as well. The company aims to see a gradual uptick in sales volumes as new manufacturing solutions are implemented.

Value-Added Products and Revenue Mix

With ongoing enhancements in manufacturing processes, JTL aims to improve its product mix, targeting value-added products (VAP) to account for 40% of total sales by the end of FY '25, while eyeing an increase to 50% by FY '27. This shift is expected to yield EBITDA margins from VAP products of at least INR 7,000 per tonne, creating defined pathways for increased profitability.

Capital Expenditure Outlook

The company expects to invest between INR 140 crore to INR 150 crore in capital expenditures in the second half of FY '25, which could reach as high as INR 200 crore depending on needed flexibility. This investment is crucial for scaling operations and enhancing overall production capabilities.

Market Dynamics and Competitive Landscape

Despite industry challenges, JTL's position remains strong, with a balanced approach between primary and secondary steel markets. They continue to avoid price wars and discounts, maintaining margins while absorbing some losses due to inventory adjustments. The company sees export opportunities remaining favorable, bolstered by anticipated infrastructure investments in key sectors.

Closing Thoughts

In summary, JTL Industries Limited has established a solid performance track with promising growth strategies driven by capacity enhancements, improved product offerings, and a commitment to value-added production. Their proactive management and cautious outlook place them in a potentially advantageous position for continued growth in a competitive market.

Earnings Call Transcript 2025-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to the JTL Industries Limited Earnings Conference Call, hosted by PhillipCapital Private Limited. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Vikash Singh from PhillipCapital India Private Limited. Thank you, and over to you, sir.

[Vikash Singh, analyst]

Thank you. Good evening, everyone. I warmly welcome to everybody on JTL Industries Quarter 2 FY '25 Earnings Call. From the management side today, we have with us Mr. Pranav Singla, Executive Director; Mr. Dhruv Singla, Executive Director; Mr. Atul Garg, Chief Financial Officer; and Mr. Amit Gaur, Chief Strategy Officer.

Without taking any more time, I hand over the call to Mr. Pranav Singla, for his opening remarks. Over to you, sir.

[Pranav Singla, executive]

Good evening, everybody. I hope you on your family are having a wonderful Diwali, filled with joy and prosperity. It's great to have you all here for Q2 '25 earnings call. Today, I'll share of financial performance and give you an update on our ongoing initiatives.

For those who are new to our journey, let me take a moment to introduce ATM. With 3 decades under our belt, we've become a trusted name in steel remanufacturing. Our product range is diverse, that is ERW black steel tubes, galvanized pipes, large diameter steel tubes, solar structures. We took pride in producing value-add products, ensuring top-notch quality and everything we offer. Our advanced manufacturing plants are located across India.

Now let's dive into our Q2 FY '25 performance. We achieved a total income of INR 4,874 million this quarter, demonstrating resilience and adaptability in the market. Our EBITDA came at INR 377 million with a EBITDA margin of 7.7%. We are also pleased to report a profit after tax of INR 264 million for Q2, giving us a tax margin of 5.2%. Our sales volumes reached an impressive [ 1 lakh 3,193 ] tonnes, reflecting a solid growth of 26% compared to the same quarter last year. Notably, value of products made up to 25% of our total sales mix.

Turning to our H1 FY '25 results. I'm excited to announce that we achieved a record EBITDA of INR 815 million, making the first -- making the highest for any first half in our company's history. Our total income for H1 stood at 10 -- INR 1,0069 million and year-to-year date PAT at INR 571 million, which is a 7.1% increase compared to last year. As part of our growth strategy, we are enhancing our manufacturing capabilities. And the GST lines are on track with machinary already delivered to our Mangaon plant -- solution is underway, and we expect trial runs to begin by the end of November. This technology will allow us to use large diameter -- diameter structural tubes, expanding our product portfolio and improving our margins. As a liberality we've doubled our capacity from a [indiscernible] enhancing our overall pipe manufacturing capacity to a proximally 6.8 lakh tonnes for the company. That expansion is part of our goal to reach 1 million tonne capacity mark by year-end. Specifically, the Raipur facility will now produce larger and more diverse tubes and pipes with an increased price range from 4 inches to 8 inches and addition of 400 new SKUs to better serve various industries. In July, we raised INR 300 crores through QIP at an issue price of INR [ 2 11 ] per share. These funds are primarily directed towards expansion -- capacity expansion, working capital and general corporate purposes. In September, we also converted the warrants issued in January 2023. Looking ahead, we are optimistic about the continued demand of state given by infrastructure investment and sustained product actively across key sectors.

By this, I come to questions from everybody.

[Operator]

[Operator Instructions] The first question is from the line of Sneha Talreja from Nuvama Capital.

[Sneha Talreja, analyst]

Couple of questions from my end. Firstly, what was the net loss in this particular quarter?

[Pranav Singla, executive]

Thanks Sneha, for the question. Inventory loss was to the tune of INR 900 to INR 930 this quarter.

[Sneha Talreja, analyst]

Per tonne?

[Pranav Singla, executive]

Per tonne, per tonne.

[Sneha Talreja, analyst]

Understood. Secondly, what I wanted to understand was you will need kind of changed the strategy towards pushing volumes and on basis on certain discounts that it is offering, what is the impact that you're seeing on the market with respect to volumes and any change in your volume guidance or EBITDA per tonne based on those strategies?

[Pranav Singla, executive]

See, Sneha, we at JTL, always have been a margin player. And being that having a wide SQ range, we never wish to participate in a price war when the [indiscernible] are plummeting in the market. And given the comparison of primary secondary market, we don't -- we didn't offer any further discount to what the business company is offered. And we didn't have any extra discounts passed on this quarter.

[Sneha Talreja, analyst]

Understood. And on Nabha, I wanted to understand the sales. When is it likely to get completely integrated because our earlier sense was that Nabha sales volumes be integrated, and we are currently seeing Nabha sales separately. So when is this likely to get integrated or we'll continue to see this as a separate sales count of?

[Pranav Singla, executive]

There are some benefits that we have to take under the Punjab government. And for that purposes, we couldn't just get the company under us in this quarter itself. But we've got the benefits that we're coming to receive. And within this quarter, Q3, you see Nabha coming into [indiscernible].

[Sneha Talreja, analyst]

So we no longer see a separate sales coming from Nabha, it will be your overall sales volume?

[Pranav Singla, executive]

Exactly. We will see the total sales volume happening in as a whole from one company.

[Sneha Talreja, analyst]

Will it be complete backward integrated? Or will we see the sales volume coming up?

[Pranav Singla, executive]

As it will be basically the same process that we are doing at the Raipur plant. And as I mentioned earlier as well, we in a situation where the production from Nabha was currently being sold to the market because they were not getting the same requirements, what we use JTL. But going forward, starting this quarter onwards, we've already started accepting [indiscernible] from Nabha. So you'll actually see effect in which the volumes will come under JTL. So the for product will be under JTL. There are a few modifications that we had planned and most of them already done. So as soon as they are completed, we'll be set to use the product in retail as well.

[Sneha Talreja, analyst]

Understood. So that will take how much time approximately when you'll be utilizing this particular plan completely for backward integrated purpose?

[Pranav Singla, executive]

By the mid of last quarter.

[Operator]

[Operator Instructions] The next question is from the line of Aditya Welekar from Axis Securities.

[Aditya Welekar, analyst]

Congrats for such a resilient quarter, Pranav, despite being a very tough quarter. So I have some 2, 3 questions. So last one is on the sales volume guidance. So we are targeting some 30%, 35% year-on-year growth for FY '25. But now our focus is shifting to FY '26. So any growth rate you are expecting what kind of growth rate you're expecting in sales volume for FY '26?

[Pranav Singla, executive]

Thanks, Aditya, for your questions. We maintain our previous sales target. This year as well, if you look at the run rate, we've already closed close to 2 lakh tonnes in H1. So given a 10% increase in -- like the minimum 10% increase in volume in Q3 and for the 10% increase in Q3 again in Q4, so we'll easily be able to clock our before-mentioned target of reaching 4 lakh -- 4.4 lakh tonnes to 4.5 lakh tonnes release for the [indiscernible]. And further, as next year proceeds, DFT, as we mentioned, will be running -- up and running last quarter by the end of this quarter. So as the volumes will pick up, the numbers will pick up and the volumes in next financial year will come up in a better way as well. And plus today itself, we announced the trial run of Raipur sitability, where we have increased the capacity from 1 lakh tonne to 2 lakh tonne. So all these factors will play in part and our yearly targets to achieve a [ 230% ] growth every year and volume is still on target.

[Aditya Welekar, analyst]

Okay. So in '26 also, we can assume 30% year-on-year growth in sales volume?

[Pranav Singla, executive]

Yes, we can -- we can say that. But there are obviously some slowdown that happen in Q1 and Q2 because of monsoon and other factors. But if you look at the whole year picture, we'll be able to deliver the same run rate of 30% growth, 20% growth in the coming year as well.

[Aditya Welekar, analyst]

Fair enough. And on the value-added product, we have a target of 40% for FY '25, so how confident we are for touching back in '25? Any color on '26, how it will grow in '26?

[Pranav Singla, executive]

I believe so year ending target for [indiscernible] is 40% and as the DFT will start, as I mentioned by the end of this quarter and the producer from DFT totally value-added. So the DFT can -- if utilize a full capacity, can also make up to [ 700 ] times a day as well. So we can see the on picking up in that way and our 40% target of VAT be covered from DFT itself. And recently, in this quarter itself, we announced when we had started a -- GI plant in Maharashtra -- second GI plant in Maharashtra. And the result of that, we saw the volume increase happening toward exports from Maharashtra itself. So all these factors locked in, we will be able to maintain a target of 40% for that. And when I say my wraps, my [indiscernible] products are only products which give me a beta per tonne of INR 10,000 plus. So with that guidance still maintain a core guidance for the year end.

[Aditya Welekar, analyst]

And for '26 because we will have full exposure to BFT in 2016, so that share will increase from 40%?

[Pranav Singla, executive]

So Aditya, we have a lot of CapEx going on right now, and there will be a situation when the capacity for black price will increase in a quarter. And on the milling production, we will be able to maintain a higher sale of 40% plus as well. But given that we're doing CapEx quarter-on-quarter in other segments as well, fiscal liquid price and therapeutic segments. So those things will kick in coming quarters. So you can -- it will be very hard for me to give exact number right now on what exact percentage I shall be achieving in VAT next year, but it shall be less than 40%.

[Aditya Welekar, analyst]

Yes, understood. On the warrants front, so all our warrants are now fully converted, right? Or is there anything outstanding?

[Pranav Singla, executive]

Only the warrants that the promoters and 1% from public categories subscribed in December -- or early Jan this year, those are pending. So these are a INR 2.5 crores warrants that issued to promoter family and public at shareholder. Other than that, all the warrants from previous situations have been promoted and limited.

[Aditya Welekar, analyst]

And one last question, Pranav. EBITDA per tonne trajectory, what do you plan will be able to touch INR 2,500 for this fiscal year and for next, can we assume INR 5,000?

[Pranav Singla, executive]

So Aditya ji, again, this number is totally dependent on the production that we do. As I mentioned, the DFT started in Q3. So we did take a little delay in DFT, which we are expected to start in this quarter. But given that the DFT will start in this quarter and as I mentioned, the total value-added product. So the numbers will start adding up towards the similar levels of [ 4,500 ] next quarter onwards. And given that I mentioned that we had an inventory loss close to INR 900 per beta per tonne. And if you add that with our beta per tonne current situation, so we were already at [ 4,200 ], [ 4,300 ] mark. But -- so we expect that these things will normalize by -- in this coming quarter, and we'll be able to maintain a healthy beta per tonne.

[Operator]

The next question is from the line of Pallav Agarwal from Antique.

[Pallav Agarwal, analyst]

I think -- most of the questions, I think, have been answered. But just on the working capital level, I think the net debt also has gone up. So in terms of number of days, that can give some clarity on how the number of receivable days and inventory days have been moving.

[Pranav Singla, executive]

Pallav, thanks for the question. Happy Diwali to you as well. So our inventory days increased this time because our inventory levels from what we last year haven't significantly. And this has happened because we had a few reports which came in towards the end of second quarter. And those imports of coils from our side, from Korean Japan. So those imports led to higher inventory levels. And given that the prices have bottomed out because the tragic move for the company from the company's end to accumulate inventory this time because the prices have bottomed out from what we think and from industry seeing as well. So given head working capital cycle will improve. But for now, everything has gone up, keeping in mind the pricing, which are working out. The major impact came just because our inventories were towards the high side.

[Pallav Agarwal, analyst]

Sure. So with the new DFT plant starting, so maybe we would probably initially have some recognition of inventory over there also till -- till the sales and production ramps up over there?

[Pranav Singla, executive]

So I have a little other side. So a new DFT to range of product that we are making it into the previous section. Yes. So we are making a section in which the market is fairly available at the pad is there. So we don't anticipate any inventory development on the term stocks and the purpose of DFT is such that we are able to maintain lower stocks by rotating the rolling as and when the material is acquired. So if it was litigation machine, I would think it before putting up the rolling but the inflation machine where I can consistently can rolling asset of demand accumulates within our panel 3 to 4 hours. So acceleration of material in the segment seems not to be [indiscernible].

[Pallav Agarwal, analyst]

Sure. Also, given that you probably global markets, because demand for at steel product seems a little subdued. So is there any -- how competitive is the Chinese -- are Chinese steel producers? So at least in terms of exports because export proportion has been going up. So at least in the case of steel, we hear that because of the dumping from China the prices are low and there is a lot of volume competition as well. So is this scenario different in the case of steel pipes?

[Pranav Singla, executive]

See, first of all, I would like to mention that from India, we are usually supplying guideline seem due to 2 countries like Europe, U.K., Africa, Australia. So in all these countries, there is a accurate already applied to the taxes products for the [indiscernible]. Wherein the competition from Chinese market is not there. However, its challenges where the raw material is supplied by the Chinese market. But at the moment, we see that there is a huge similar that Chinese ever offered and Chinese product is more so competitive in the market as far as raw material cooperation that we're getting today. So that is a seen some changes. The benefit that we have is that we have an export drive me to the [indiscernible]. There will be scenarios than we are able to or for the real estate. So as to be able to maintain our viability in the export market.

[Pallav Agarwal, analyst]

And then we export, so we are out to import without paying the import duties.

[Pranav Singla, executive]

Yes, absolutely. So when we are reporting for the prices, a company is allowed not to pay any retail on top of it, there is no BIS requirements for the purpose of [indiscernible] that out. So that is completely valid.

[Pallav Agarwal, analyst]

Sure. And lastly, I mean, a major competitor has recently put up a facility in Dubai. So I think the rationale was that maybe when steel prices internationally were lower than domestic prices. So that would give them sort of a cost advantage. So are we thinking of anything on those lines? Or are we are more comfortable putting up a 1 million tonne incremental facility [indiscernible], so how does the economics work other?

[Pranav Singla, executive]

See, our target currently is, I think [indiscernible] that we have to tell our on expansion that we currently are doing and focus in that manner. We -- as you see by our performance, we have received successively we report share is very silent in the -- in the region. We are not thinking of moving abroad at the moment because we see the Indian scenario of things being on the very aggressive front with development and the government policy. So our notices driven for the product for aging market and then think of going to a second market for the purposes that you mentioned, if they were viable to the [indiscernible]. Right now, banking is not fair that direction.

[Operator]

The next question is from the line of [indiscernible] Gara from Max Life Insurance.

[Unknown Analyst]

I have a couple of questions. So firstly, just wanted to understand currently what is the primary versus secondary mix that you have? And do you see that mix changing in the market?

[Pranav Singla, executive]

Thanks for your question. The current mix that we have is close to 53%, to be exact, I think 52% of secondary and the remaining 47% is primary. And -- so both the segments they have a different market itself in the market. So we are not competing with ourselves in the market. It's just a different segment market that we cater with secondary materials and it's a different market that we cater with [indiscernible] materials. So there is no confusion as such that we products or something like that.

[Unknown Analyst]

But with the expenses that we are going see the mix changing? Or should we understand that more these segments will remain close to the [indiscernible?

[Pranav Singla, executive]

So with the expansion that we are doing in our facilities is our mix change and which will be that our major expansions happening in primary segment. So -- which is -- so what primary and secondary is 50-50 right now and will eventually be 20% secondary and the remaining will be primary.

[Unknown Analyst]

And in terms of the total SCs,how are you looking at a force expansion I mean the percentage shares within the products, how should we look at the product mix of expansion?

[Pranav Singla, executive]

[indiscernible] about close to [ 12 million ] right now. And the adding capacity day and with the RSB [indiscernible], which will be adding by end of this quarter. [indiscernible] and once my [ 13 ] million tonne staff is well, I'll be having [indiscernible].

[Unknown Analyst]

Okay. And the product mix?

[Pranav Singla, executive]

Product mix will be as such and the VAP products will be 45% and -- and -- for the next year and 55% would be general products.

[Unknown Analyst]

And so that if you say FY '26, you will have flat total VAP products to be closer to 45% so is that how should we see the trajectory over the next 3, 4 years? I mean your target that mix that you have?

[Pranav Singla, executive]

The target now is 50% once the full capacity installs of 2 million tonnes. On that production, I -- the target is to have a 50% mix of VAP and the remaining general products. And how I differentiate -- we have a very conservative approach of annuity production VAP category. So are as anything about INR 7,000 EBITDA per tonne.

[Unknown Analyst]

Okay. So that you say almost INR 7,000 per tonne will be included into that and that will go to almost 50%?

[Pranav Singla, executive]

Exactly. INR 7,000 and above as well.

[Unknown Analyst]

INR 7,000 and above, okay. So this, like you were mentioning that you are planning to raise this 2 million tonnes capacity in that from what other capacities in the VAP side would you be adding to reach this targeted 2 million tonne?

[Pranav Singla, executive]

Ma'am, firstly, our capacity today is stand by the success and capacity. We commissioned a new higher IR machinery at Raipur, which makes it a 7 lakh tonnes. By the addition of DFT, will be adding another 2 lakh tonnes of capacity by DFT in market. Also, this will be usually our yearly pipe manufacturing capacity by the end of this year. By 2027, we are going into certain forward market integration, which include narrowed galvanizing CR lines, wider along for sheet manufacturing and collecting. So those -- all the pillars from 1 million tonnes to 2 million tonnes are a value-added product at different stages. So in that utilization of about 60% to 65%, we are attesting that matter in the end of '27 will be having go to 50% to 55% of a value-added it targeting about that, but yes, achievable at 50%, 55% of our real equity with all those steel manufacturing, galvanized side, steel local pipes, the DFT pipes. So that would be where our value added will be.

[Unknown Analyst]

Okay. Just last 2 questions from my end. You mentioned the Mangaon facility that is coming up. You mentioned last of Q4 will be the time when the capacity comes, correct?

[Pranav Singla, executive]

DFT will be starting by Q3 end and we start in with the in Q4.

[Unknown Analyst]

And how do we see the ramp up? Any guidance on it?

[Pranav Singla, executive]

Ma'am, it's too early to say, though, but by the end of it, so we should be able to [indiscernible] about 25% of it capacity -- of the peak utilization capacity of 25% and F1 third quarter.

[Unknown Analyst]

Okay. So you're saying by the exit run rate should be closer to 25%. Should I take that?

[Pranav Singla, executive]

I understand a that's what the guidance is.

[Unknown Analyst]

Okay. And sir, just lastly, with all the coal mines -- coal [indiscernible] and galvanizing [indiscernible] coming up. What percentage of integration that will give us in the overall capacity?

[Pranav Singla, executive]

I did not understand your question, ma'am, sorry.

[Unknown Analyst]

[indiscernible] higher expansion is true and your cooling is set up as well as the galvanizing [indiscernible], what percentage of power integration in overall steel [indiscernible]?

[Pranav Singla, executive]

I think we're adding to [indiscernible] that's not because we cannot really say that it's a forward integration or in [indiscernible] integration. There are multiyear products in our range, which we currently can do what we are wanting to do because of the lower margin it will be by procuring the product from outside. So all while total from outside, you don't get the margin. So I'm not currently doing it. So certain steps are back-integrated so that I can make a pre-galvanized pipes at a higher margin and certain products like the color potash and the wider are forward integrated not towards pipe, but towards a new [indiscernible] development in the similar industry.

[Operator]

[Operator Instructions] The next question is from the line of Bhavik Shah from MK Ventures.

[Unknown Analyst]

Sir, my question is, what kind of realization for [indiscernible] in October, it has fallen or it has improved from Q2?

[Pranav Singla, executive]

Can you please repeat the question?

[Unknown Analyst]

Also, what kind of realization coloration in October? Are you seeing improvement? Or are you seeing further fall in realization?

[Pranav Singla, executive]

No, we've -- for the month of October, we've seen a further upward system variation. There is no downward shift on that.

[Unknown Analyst]

Okay. Got it. And sir, like, can you just help us understand mix of our total expenses how much or a percentage of our will be a fixed in. So just to understand the operating leverage, if any it can come when we add value-added products?

[Pranav Singla, executive]

Can you please repeat the question, it's unclear.

[Unknown Analyst]

Sir, what percentage of our total cost will be in nature. So as to understand the level of operating leverage that can come [indiscernible] increase our sale of value-added products.

[Pranav Singla, executive]

So the Bhavik ji, our fixed cost is just on the machinery and land building. Does that -- the rest is on reliable cost. So -- when going forward, the guidance of the capital investment that we've given is a fixed cost. So for me in our industry, we look at a return of [ 3 ] on the fixed costs. So everything about that, say, whatever we have to provide for the running ammunition to be raw material be label power is all label in that case. So only the administration expense, which are as we increase the production, we will need to add certain managerial-level employees. But that does not increase in that higher trajectory as the production will increase. So am I able to answer your question?

[Unknown Analyst]

Yes, yes, understood.

[Operator]

The next question is from the line of Bhavin Pande from Athena Investments.

[Bhavin Pande, analyst]

Am I audible?

[Pranav Singla, executive]

Yes, you are audible.

[Bhavin Pande, analyst]

Congratulations team on a related performance despite macro headwinds and tough industry scenario. Just extending on that the EBITDA pre the number looks pretty good despite paying in the sector. So I'm just trying to understand how margins and EBITDA per tonne have managed to stay elevated despite headwinds.

[Atul Garg, executive]

Bhavin ji, have a very happy Diwali to you. To answer your question, see, we are at our as Pranav previously mentioned are, say, 50% in the secondary market, 50% of the parimary market. The secondary market scenario is that it's a daily buy and sell. So the loss of inventory, there is not so much of negligible or we are able to obtain a fixed level of EBITDA that there are, so only where you have to take your larger amount of chunk of a material from their primary manufacturers wherein we get certain issue while the market is correcting in terms of the prices annualizations. Luckily enough, in this first half, we were able to substantially increase our expense by 104%, wherein we were able to have a higher margin as compared to the previous times that we were able to offer the product range in the market and also able to cover those materials on a back to back basis via the donation process and base for the purpose of these do. So these certain areas help us to keep our level impact.

[Pranav Singla, executive]

If you look at our exports this time, we had one of the highest exports ever for each one. And we have better position exposed at this time. And given that we did import some oil, so all of them as we quoted the finished product and margins were better than that. So altogether, being close to port and having cents in secondary market, these are few things that added up to 8 EBITDA per tonne.

[Bhavin Pande, analyst]

So Pranav, in Q -- in H2 FY '25, do we see export the mix in the same portion or it could be a higher or lower?

[Pranav Singla, executive]

Do you expect another all time high exports in H2 given that our DFT will start as well and our galvanized is already anyway started. So our exports can have a good increase from what we have. We have good order book as well for exports.

[Bhavin Pande, analyst]

Okay. So our margin -- or your growth guidance is intact at 30% for the year, right?

[Pranav Singla, executive]

Yes, yes. That's right. Our growth guidance is intact for 30% for this financial year.

[Bhavin Pande, analyst]

And what CapEx outlook should we build in for H2?

[Pranav Singla, executive]

Around INR 140 crores to INR 150 crores is something that is expected. It can for stretch up to INR 200 crores as well.

[Bhavin Pande, analyst]

Okay. So if we add up the INR 90 odd crores, it could be around INR 250 crores to INR 300 crores for the full year, right?

[Pranav Singla, executive]

Yes. That's right.

[Operator]

The next question is from the line of Sneha Talreja from Nuvama.

[Sneha Talreja, analyst]

I just wanted to understand what is the current price differential between the HRC and the secondary prices? And what's the kind of shift that you're seeing based on that in your internal product mix?

[Pranav Singla, executive]

So Sneha, also on the basic steel prices for secondary to primary, if you talk about the difference on -- as of it today, is INR 4.5. And if you go further on in [indiscernible], for example, if I have to -- I'll give you that number as well. if you're selling to pipe in market -- INR 50 per kg for HRC. And at the same time, the secondary pipe is INR 45.5 per kg in the market right now. But the game changes when you go in less the central. So 1.01 thickness of pipe for secondary will be INR 47, whereas the 1.01 thickness of pipe for HRC will be close to INR 56. So that's where the delta increases, and that's where productions are like we benefit as well. Total altogether different segments that we cater with less technical. And there is no -- so it's a business segment that's also teated and help there is something about overall.

[Sneha Talreja, analyst]

So you don't see any shift happening internally based on that?

[Pranav Singla, executive]

Given the delta of INR 5, which is on the basis that the math, but as I mentioned to you, the delta further increase to INR 8, INR 9, so that's something that can ever normalize what we expect. And what are we supplying to customers demand and we don't see anything going in that some. Currently, what we estimate is that's something that is keeping the return will be for the whole company as well.

[Sneha Talreja, analyst]

Understood. And lastly, on your EBITDA per tonne with the DFT coming into play, in Q4, what can be the EBITDA per tonne level that you can estimate given that you currently are at about [ 4,200 ] to [ 4,300-odd ] easily. What can we see this ramping up to when your actual DFT comes into play?

[Pranav Singla, executive]

There should be a slight increase here, given that even if we produce close to 20,000 tonnes of material in that quarter around maybe 30,000 tonnes of material in that quarter, in Q4. So that will be a producer, which will be extra on a lactone any as we do right now. And that product will be having an EBITDA per tonne of [ 7,000 ] are going to be plus. So given that calculation, you can see maybe a console in the total EBITDA per tonne in Q4.

[Operator]

The next question is from the line of Vikash Singh from PhillipCapital.

[Vikash Singh, analyst]

So this one question. I wanted to understand that in the first half, so while the PC data so [indiscernible] steel demand has been doing at almost 14 -- 13%, 14% industry or go and it is a little lower. Usually, the growth rate for the annum because of substation has been in the high in the past 4 years. I just wanted to understand, is this that the second page wins you market share from the ERW players or in this slow a little bit of no progress is because of other factors, if you can just clarify.

[Pranav Singla, executive]

Vikash ji, the second segment, is this replacing the lower successes and loan basis, which is a very high any high realization for the primary -- primary segment and also takes a longer time to produce in that. So -- so when you talk about a little macro as you started speaking about the demand at everything we talk about the in the second line in producers in the world, but still have the lowest book captain, where demand is coming from is less item temper from, say, domestic demand, replacement of growth or low to low how we say from a replacement of an [indiscernible].

So these demands are there persistently coming from the increasing perception of usage, higher -- the parable and also the rules and regulations, which are consistently change the domestic scenario for better utilization of manpower, timing and resources. So we did in the building deal industry are a proxy to all the development. So these are all is we see pipes prices center, applying everywhere and to a me from a stable to, say, road signage from our and barrier to the block ever where we see our partners or a pie been applied. So when we talk about primary and secondary, there is a parallel market for both of them rather than competition. So yes, the lower segments of the pipe from the rigs not even happen to deferred the pre segment is coming from the secondary segment now days and effort from there where there is more higher sites required high [indiscernible] performance in that area. So where any primary product will be applicable. So listen the whole rest of the scenario, I believe [indiscernible].

[Operator]

The next question is from the line of Akshay Chheda from Canada Robeco Mutual Funds.

[Unknown Analyst]

Just one question. I just wanted to unify possibly for esteemed clearly if you can give a sense what is the margin that you rate in our primary price and secondary price. Is it that primary factors...

[Pranav Singla, executive]

Can you please speak, your voice is not very clear. Can you please?

[Unknown Analyst]

I just wanted to understand what is the margin that you make in your primary pipe versus the secondary pipe. Is it that secondary such as better margin or more are equal? Or is it primary use of better margin?

[Pranav Singla, executive]

Thanks, for your question. So basically, when we talk about our page, we are making versus of steel and the conversion that we get in primary and secondary is just the same. It's just that as of this quarter, we did see inventory losses in primary segment and nothing to nothing is secondary. So that's how the differentiation happens otherwise being converted, we get the same margin across both the production. And also, when I talk to you -- tell you that we are a secondary material producer and metal producer. Are we see the [indiscernible]. So it's not that our secondary cannot be primary pipes. They can be primary pipes overnight as well and same goes of primary as well. So it's just that we -- what we wish to supply in the market and what demand is in the market.

[Unknown Analyst]

Okay. And how do you see the cost and like are they reaching up? Or are they relatively taking or do you expect some correction the way that has happened in the primary one?

[Pranav Singla, executive]

We don't see any further correction happening as of now. I think the market has bottomed out. And the demand this should be -- the government has -- we should be stepping government orders coming in soon as well. So and the exports are anyway with our expanded capacity, we are almost touching on all term exports. So given the current situation, we think everything should be face in the coming quarters.

[Unknown Analyst]

Referring to the secondary side. Secondary, how do you do the cost?

[Pranav Singla, executive]

Secondary, the cost -- it changes every hour as per [indiscernible]. And it's just delta within primary secondary, which is INR 4.5 right now per kg. And it's a good demand over there as well right now.

[Operator]

Thank you. Ladies and gentlemen, that was the last question for [indiscernible]. I now hand the conference over to Mr. Vikash Singh from PhillipCapital India Private Limited for the closing comments.

[Vikash Singh, analyst]

On behalf of PhillipCapital, as well as and for giving us the opportunity to host them and without taking any more time, I'll hand over to Pranav Singla for his closing remarks. Over to you.

[Pranav Singla, executive]

Thank you all shareholders for joining us today, and I wish you a joyous of Diwali. And thank you Phillip, thank you Vikash ji and thank you PhillipCapital for hosting the call as well. Thank you. Happy Diwali to everybody.

[Operator]

On behalf of PhillipCapital India Private Limited, that concludes the conference call. Thank you for joining us, and you may now disconnect your lines.