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Mishra Dhatu Nigam Ltd
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Ladies and gentlemen, good day, and welcome to MIDHANI Limited Q1 FY '22 Earnings Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Abhijit Mitra from ICICI Securities. Thank you, and over to you, sir.
Yes. Thanks, operator, and good afternoon to all the participants. Thanks for joining in. So we are here to discuss Q1 FY '22 results of Mishra Dhatu Nigam. We have with us the MD of MIDHANI, Mr. Sanjay or Dr. Sanjay Jha. So without further ado, I hand it over to Dr. Jha for his opening remarks. Over to you, Dr. Jha.
Thank you very much for giving me this opportunity. So I welcome all the investors for joining this conference call. Friends, as you all know, that this quarter, which was the first quarter of this year, that FY '22 has been a very mixed I'd say the feeling of response or mixed, I think the functional as the [ functional ] requirements are concerned. We have started this month, April and May, as you know very well that we are in the midst of a very peak of the second wave. And the entire nation was facing that, and Hyderabad, Telangana is also not untouched by that type of effect of this pandemic. But one more thing that since we have the experience of understanding the taking that the first wave. There a lot of understandings were there and people had these protocols as far as the COVID guidelines are concerned, but the impacts are very high for the second wave compared to the first wave and which has been felt on the employee also. So we had a lot of, in fact, [ so ] started in the company. And then we had a lot of restrictions coming across the country as well as the local condition also, we had a lockdown situation and which has gone from -- right from the complete lockdown to then partially lifting. So we have passed through the different phases in the next that April and May and, of course, partly in June also. But then in this process, what has happened since we understood that how to operate during this COVID time. So we continued our operations, but not to the fullest scale, but it was not like the first wave when we had a complete shutdown of the unit. So we are operating. But a lot of logistics were not available. So certain things like [ Sapporo ] you have to do some outside contract activities, [ ja ] work outside where we are depending on their supply chain. Some of the processing of our material outside and getting it done and transferring it to Hyderabad for further processing. So there are some sort of -- we had the restrictions and we have faced in our dispatch, pricing also. So in spite of that, I'd say that our people they have done reasonably well. At least on the BOP front, which was last time, we had a near value of around INR 87 crores, INR 88 crores. We've been able to have INR 124 crores in this quarter, and we are at 41% jump in that BOP. So definitely, as your UOP is more than keeping the same amount of more or less amount of fixed cost. There is an advantage on that side. In addition to that, we also have had this period that certain things like we [ have ] advantage of reducing our raw material consumption by taking some of the strict measures and improving the cost efficiency. And there also, we could get a substantial amount of some savings there which can be seen in our results also. So with this type of performance this year, this quarter, that is '21, '22. First quarter at least, we have got a profit. Otherwise, it was some symbolic loss we had incurred in the last year. So we got PBT of around INR 25.6 crores, INR 25 crores around against the earlier time, the loss of 1.2 lakhs. So this has come at a good [ replace of we're ] on boosting for the people working in the company. And now when we are entering in the second quarter, I feel that indications are good now and we are moving effectively as I say, it has come to almost a fixed [ 1-off ]. So things are now in the [ partly ] in control. And we are moving effectively in that in the second quarter. And during this period also, we have done 1 thing. Our project activities which we are indicating from last couple of years and seeing that we have 2, 3 projects that are going on. So those projects also the progress has been quite same is satisfactory, I'll say in this period. Even though we had 2 phases of the lockdowns -- but our people, they were able to manage. 3 of our -- 2 of our main projects were, I'll say, 1 wide plate mill and another is that 1 in the armor plant, the [ Rohtak ] has told us very well. And I'm very happy to share with you that a wide plate mill, which is coming up in Hyderabad campus [ Telfa ] has come to the state of now the commissioning has started. And initial indications are good. Equipment is performing. It is giving good output, but it is still under the commissioning stage and full plate commissioning I'll be announcing as an [ under ] entire trial for conductor respectively. But initial indications are good. That was 1 of the biggest challenges in this period, bring back that equipment operation. And that also with the involvement of a lot of foreign OEMs, the foreign person, they have to turn all the way from Europe to India. And a number of instances what has happened that even though you are India is having less number of cases, they are having more it was India and Indian COVID condition has gone to the bad case. In their country, it was in a [ better ] condition. So all those things have put a lot of restrictions on their family. And in spite of that, with our consistent effort, we are able to bring them here even though the confidence that yes, we are going to take care and they did a fantastic job. And at 1 moment of time, we had a half a dozen founders working inside the plant, and that's why we've been able to bring this equipment into operational condition. And now we are also in the process of putting our armor facility also into the operation very shortly. A lot of [ official ] things have started there also. But there are some statutory clearances required from the local government, which is being taken up. And you know today also, again, during the COVID time, that also has got affected because you cannot travel, you cannot call them for inspection. And the response will be very, very slow. So any of that, those things we are going to handle progressively. But that project also has now is coming to our plate. And I'm sure that very shortly that also all this is what I'm talking about the project side. Coming to the other issues, in fact, we had an order book position the last year because of this pandemic condition, a lot of uncertainties in getting the flow of funding the various projects. And order inflow was slightly inferior. But then this year, it has picked up now. And especially, I'll tell you whatever we have done in the last 2 years on the export front, it is giving the good results now. And we have a good visibility for the export. And as already I have mentioned that in the year 2021, we did almost a jump of around 85% in growth in the project export. I'm sure that this year also we'll do some good growth in the product export also is expected. So on that export side also, we are moving quite [ respectively ]. And internal order flow also this year, I'm expecting is going to increase. So certain things, which already we have mentioned that a lot of products we have [ intonized ] in the last '21, '22 -- sorry, '20, '21. So that is going to give our revenue inflow in the '21, '22 quantity is going to increase. And we are going to get certain things on the form of the revenue. It is [ evidently ] in the good quantity and the various projects are getting approved. So from defense, I am seeing that good inflow is expected. Defense and aerospace. Aerospace already, we had a quite comfortable order book position. So this we are executing now, and there is certain, again, some inflow is coming from the space also. And as you know, that space has gone far out. They are going for the public-private partnership model and where some private players are coming in the, entering in the [ aerospace ] program. So MIDHANI has a potential law as it [ since it ] previous supplier to have a tie-up with certain [ home service ] winning the contract. So the materials are again coming expected to join from MIDHANI. So we had 2, 3 round of discussion with the various agencies who are expected to get the orders, are expected to get the first project coming in the private sector. And I am sure that they also will be having a good beginning and sort of start it there. And coming to the future projects or future prospects, our main target is now to enhance our capacity, which is our core capacity and there, the capacity includes the melting and the melting basically on the titanium alloys, where our requirements have gone up in the country. So there's a need to improve our production in the titanium alloys. And there, we have decided to set up a new titanium facility, exclusively for making the titanium [ manner ]. And that facility also we have started working. We have [ this ] order for the equipment, [ mineral ] equipment. And also the work is going on inside for making a new facility. And in addition to that, in the primary melting from the specialty steel sector and the super alloys. We are setting up a [ 8 ] ton vacuum-induction melting. So back to work also is progressing very well during the COVID period also that project has moved very effectively. And I'll be sharing with you the information which comes for the store commissioning or [a call ] solution is going on and it is going in [ free the ] space. And also, we had certain other developmental program, which we have tied up for investment casting, that work also is going on. So what I say that this -- our company also is taking -- thinking about the future and in the future like enhancing production then going for the export market and also seeing that how the domestic requirements are made in the very less time. So these are the different activities going on. And then 1 advantage now that with the government getting a lot of putting restrictions on buying the material through the global market by putting the limitation that beyond less than INR 20 crores tender has to be purchased from the domestic manufacturers only. So we have -- we are getting some advantage of that also. But definitely, the price is a factor which have to beat, not at the cost of [ that ]. It is a monopolistic type of approach. So that's also how your company is doing well and a lot of orders, we are now getting at a highly competitive price. And one example, I'll say that the flow of orders in the form of as we said [ a fin in 2 tools ], which we have supplied to BSL recently and which, in turn, going for the nuclear power plants. We have supplied 2 sets of tools for a steam generator and [ for that ] is already under production. So basically, they are also -- I'm seeing the visibilty that we may, again, win some of the tenders in that category also. So overall, today, market is good. And if coming for our wide [ treatment ] operation, once it is getting stabilized, I see a very good visibility and business in the sector where there is a lot of vacuum and MIDHANI is one of the potential supplier to fill that gap. So overall, I'd like to end here and with the one last one, that our order book position also has touching today around INR [ 1300 ] crores. And it is not the value, but I see a lot of requirement are coming in the future. And there, if we are able to supply on time more and more orders [ will be filled in our folds ]. Thank you very much. Now it is open for further discussion. This is all from my side.
[Operator Instructions] We have the first question from the line of Bhagyesh Kagalkar from HDFC Mutual Fund.
So regarding the order book expectations for the next 8 to 9 months, this target INR 200 crores tenders will be open for the Indian companies like us is going for a long tender [ period ]. But where are our bids now? And what do you see the order position by end of the year? What's your target?
See that today, as I told you, except the space where we have the long-term requirement for 2.5 years. Now practically, it has come down to 1.5 years. So beyond that, certain other orders, normally, people will not wait for even the months also. So the expected time of delivery once the order is placed in a 6 months, sometimes maximum 1 year. Now that is where I say that whatever we have the INR 1,500 crores today, is going to add further as we progress fast. And there are various order processing are going on, which we are aware, and it is on the various different approval stages, especially even from the defense or the space also. So those things are going to materialize with the time. And by the time, whatever I have a INR 1,500 crores order book, I'll exhaust something by supplying another couple of months, then further addition will come. So I see at the end of the year, let's say if I'm able to do this year around INR 1,000 crores, I need the minimum inflow of around INR [ 7,000 ] crores. And I don't see that there is any reason that INR 5,000 crores orders should not come. Very good visibility that we get them [ also with ] the product, and also will be resorting to [ similar ] lines. It is coming to almost in the area out of the value of around INR 1,400 crore to INR 1,500 crores order book will remain once we are closing in FY '22.
Sir, should I interpret this, okay, you would like to close the year at INR 1,000 crore revenues. So a lot of the orders are short-term-oriented that you get them in a month and you finish in 6 to 9 months, essentially. And plus, there are midterm orders for the wide plate mail, et cetera, will continue to come.
Yes. It will come. I'll give you 1 example. Wide plate mill -- even though we have not started, today, I have the order book for that also around 20-25 almost 12 plus, around INR 15 crores order is already there with me and another INR 5 crores is -- visibility is there. So -- but these orders we have taken very conservatively because we don't want to commit as of now to have the full capacity of the equipment. These are under commissioning stage. So still in the commissioning stage, we don't want to waste [ extra ] material. Whatever comes out reasonably at a very less amount of capacity utilization, we'll be able to execute that. So we are not counting that as such because that we are counting in the area of commissioning only that those things will go from the commissioning trial only. But definitely, sales will be there. Once you make the product yes, you can [ say ] it.
Okay. And your facilities you feel are gearing up, the foreign consumers are [ be in ] -- okay. So for next year, you can have positive other revenue targets as well as on the margin side because [ the plates ] start running, et cetera. Okay.
Yes. Yes.
[Operator Instructions] The next question is from the line of Jinal Sheth from Awriga Capital Advisors.
So in case of titanium line, I just wanted to understand the market a bit the market opportunity and the players out there and the kind of CapEx that we intend to put there. Can we just talk about that?
First of all, titanium alloy manufacturing capability in India is only with MIDHANI today. Other than MIDHANI, no other Indian companies, they are manufacturing titanium alloys in the country. And coming to that requirements for titanium alloys. Right now, I have a order book position where I will be producing around 500 tonnes of titanium alloys in this year. And the requirement I see in the future, it is going to increase to up to around next couple of years. It will be touching around 1,500 to 2,000 tonnes. Those are the requirements. Now 1 [ of the ways ] is that either you can meet the [ baggage ] quantity by import or you can use, you can ask right now how we are able to meet the requirement of gap, whatever the demand and supply gap in the country. So mainly, it is being met through the import only. So we are trying to fill this gap by increasing our capacity. And I see there is good visibility in that area. So that's why we are enhancing our production capacity by adding new melting facilities. Now the CapEx requirement for that will be around, we are investing first in the smelting furnace. Very crucial equipment, already we have placed the order. And also, we have to take some [ melting ] unit. So total [ capacity ] around INR 100 crores, INR 150 crores investment will be there for the new facility, which is [ coming now ].
And you did mention that currently -- so if we -- you see around 500 tonnes this year, but you've also been mentioned there some demand is being met by imports. So what is currently the industry size in that because if you are the only player and then you're importing. So I didn't -- if you can...
We are supplying requirement. But since we are not able to meet the entire requirement, we are importing also.
Right. Right. Understood.
That's gap only. Now we are enhancing the capacity.
[Operator Instructions] We have the next question from the line of [ Ravir ] from [ Rethambali ].
I want to understand on scope for MIDHANI, is there any scope? Like recently, HL has received an order of around INR 40,000 crores for [ 83 MCs ] So India is sooner or later going to make a lot of [ ingots ]. And this ingots require a lot of titanium [ so far ], et cetera. So going forward, if I see the scope only for, say, this 83 LCM [ mark 1 ]. So what going to be the expected scope of MIDHANI for this project?
Yes. Actually, they are also trying to figure out that what would be the [ indination ] in that LTA as far as the raw material is concerned. So they have worked out. And basically, they are coming in the 3, 4 categories. The first 1 is composites and fiber component, which is still there to depend on the import or some for material import then fabrication inside. The second area of titanium alloys is already -- we are supplying to them, and we are expecting some orders and some models have already had in place also for -- but not for the full aircraft, full project, but they have closed the order also. So part of [ super alloy also ], and some of the special sales, we are getting the orders. So we are -- entire 83 aircraft LCA [ of them ], MIDHANI is going to get a good like amount of orders as far as the raw material part is concerned. But definitely for the fiber composites and all, it is coming from the wholesale.
But sir, in terms of percentage, I want to understand like for a higher craft of LCA, what is the percentage of this 3 divisions like the composite and the titanium business superalloys [ we comment twice ] And how much MIDHANI is going to get into that?
Exact figure I'm not having, but I'll tell you, it's not going to be that big percentage. Because if you see any aircraft, basically, the Indian part is still we are very well that we are getting premiums from the outside. We are engine is coming from G. And as I said, the second component also is coming from the import source. So other metals and all is, amount is limited because majority of the high-value raw material used in the Indian company. And since [ it then come ] from the outside, there is a very less part left in the other areas of the aircraft. And you know the ammonium alloys being used very widely for main structural components that is going for the [ inside ]. So because those things have curtailed that input of the material. But I see as far as the total is concerned, it will be around INR 300 crores to INR 400 crores of orders will be definitely there as we progress. But everything will not come at one time with the -- it will come in the back sides because all their crafts also they are not being delivered, it is a staggered delivery. It will take some time to complete the entire supplies.
Okay. So maybe my last question. Last question is like what is the percentage of nomination and competitive tenders in your current order book? That's it.
Currently, order book position, I'd say, by nomination, we have around 70% around you can say, balance 30% from the competition only. But that 70% -- whatever I'm talking is that since we have got these orders logged back. But in the coming days, that is going to be still lower. And I expect that since like say, if you take an [ if we have an LCM ] the only supplier. So definitely, it will come by nomination. So these are an area where since we are exclusive in manufacturing. So it is coming by nomination. Do not because that there are some 2, 3 suppliers in the country, and they are giving [ among all of them ] nomination. There is no [ one today at that level ]. That's why it is coming by the nomination.
Sir, what is the scope of, what is the growth projects -- what are the growth projects in the next 3 to 5 years?
I am saying that now we have the project mostly, we are working on the project from last 3, 4 years, and aircrafts are getting commissioned in 1 by one in sequential way in this financial year. So I say the majority of the projects we are going to commission in this financial year. And there, as I mentioned that wide plate [ making is ] 1 of the biggest among all the projects, which will be around a value of around INR 550 crores. And in addition to that, we have exclusive armor plant it is coming in the Rohtak. That also is going to commission this year only. And another 1 is 2, 3 capacity augmentation facilities like, as I said, [ vacuum induction ] maintain and also we have some investment casting. So these products are also getting matured now. So everything [ goes to be ] commissioned in this year only. FY 22.
The next question Is from the line of Himanshu Upadhyay from PGIM Mutual Fund.
I had 2 questions. First was, what is the CapEx line for FY '22 and FY '23 over all the projects we have in [ this tranche ]?
FY '22, we have the CapEx target of INR 230 crores. And for '23 I can say it will not be less than that. It will be almost on the similar line. So next 2 years, I [ would say everything is ] there. But beyond that, we have to see that -- where we should invest and what are the other prospects [ there would ].
And one more question was in the older calls, we have stated that we are trying to diversify also, okay? And working on oil means parts for oil rigors and everything of it or mining and all those where, again, high where our -- some of the parts may be required or where we can add a lot of value addition of it. [ With ] significant improvement in those markets happening, what is your assessment of what you were trying to reach over 1 or 2 years back. Where are you? And how are you progressing there on those efforts of yours? And are you seeing any increased demand in those segments for what you have achieved...
One area of diversification I said earlier also that we did some work in the railway. Now the railway, they are the bulk consumers of flat products. Flat products means like steel, alloyized steel, they use for [ their decortez ]. And there already, we are in the business from last couple of years. But now since our whole wide plate mill is installed, and we are going to -- and we are commissioning now, we can supply the railway from that. In addition to that, now this plant also, we are making the [ tender steel plates ]. [ Efforts ] also is going to be in the open consumer market only. So that also is the 1 line of products we are having. So diversification is out now on the car now. In fact, diversification has [ diminished in ] the last couple of years. But I see now from this year onwards, our share of diversification will be more. And the first one, what I mentioned about the railway and also these plates are [ along ] whatever I am discussing. It can also go in the mining also. But mining as such, I have seen that we are not having so much presence and not possible also because their material requirements are very, very like commercial grades, which are a level and others who are having a bigger capacity and now they are more economical for them. So if we can solve there are some chronic [ in product ] chronic issues regarding some of the material problem, then only we can -- or will be becoming profitable and will be also acceptable to them. So there, we did some work with the Northern [ corporal ]. But I'd say that now so far, their response, we are expecting that performance of the material, if they say it to be okay, then we can also enter into that. But right now, the volume I don't see much in the -- coming in the mining sector. But railway, I see that it will be a reasonably good beginning for us. And also in oil and gas, I'm not talking about the domestic industry. At least, I see that an export market, whatever we have supplied some of the major items have gone in the oil and gas only, in the export market. So I see there, some good visibility there in the export market to enter in oil and gas.
Okay. And any thoughts on, let's say, next 3 years how much can with your plate mill CapEx and railway and oil and gas, whatever efforts we have been making, how much can be the revenue contribution from Aero, Defense and Space over next 3 years?
Whatever investments we have done, I'm not bifurcating in the sectorwise. But definitely, it will be a major part will be going to again, a space and depends only from them. But as I said very -- in the initial 1 that specialty also is going to use for the railway and also for oil and gas. So it is a combination of different requirements. Since the capacity is big, the mill capacity is coming to the very high level of around 30,000 tonnes per annum. So I see that serving to only a specific sector will not be economical for us. We will definitely sell in a different sector using this facility. Sometimes, we have to produce the very lower value item also in large volume, and high value items in the low volumes. But the equipment has to run and meet the regular requirements and will go for regular operation.
But we have not set any targets. We want to have this much from nondefense is over a period of time. The situation evolves, we'll decide. Would that be the right statement?
Order position is the same. The order position will decide that how much percentage go to the defense, how much going to the space and how much will go to railway.
[Operator Instructions] The next question is from the line of Jonas Bhutta from PhilipCapital.
Sir, I missed your earlier remarks, but if I caught it right, you are targeting almost INR 1,000 crores of revenues in the current financial year. If you can share what is the likely breakup going to be between space, defense and nuclear energy and others out of that INR 1,000 crores, please?
Thank you. First of all, I request you not to quote INR 100 crores right now because the figure you're giving is not the right way [ appear ] in that number. But what I said is [ outside of ] approximately considering the growth of net sales, 20%, 14- 15% last year also, we had the growth of 14%. If the current situation of pandemic is not going to reverse now the next couple of months, we are not getting yet affected. Definitely, we'll have the better prospects. But what I said that after addition of certain new facilities, it is possible to have this magic figure of 1,000 crores but very different to sector-wise. See, normally, if you see the last year also, we have done around, say, around 50%, 55% for the space. So more or less space will again dominate and not less than 50% this year also. But definitely, other 50% defense will pick up, defense is picking up also. And balance number is our wide plate mill gives us the full support, it goes for the complete operation. I expect that some good revenue from railway also as well as from other industries. And I'll say it is coming from the mix of the [ filling life ] and go for, let's say, players using for the LNG application because you know that wider players are there, which are being formed in the form of the tube [ are using ] used for making the LNG pipelines and all. So it is an oil and gas will be contributing. So railway oil and gas will be coming from that sector. And some of the things which are already we are doing outside processing. So that can be stopped and brought it inside. So there will be savings from that front because we are reclaiming an old facility instead of using the facilities from the other companies.
Connected to that, sir, what is the targeted order inflow for this year? And how much have you done in Q1?
Order inflow, we are expecting around not less than 1,000 this year. And already in the first quarter, we have crossed around 200, 250 around -- 230 around more precisely. And we are seeing that now it is going to nearing around [ 1/3 ] income for this year.
Understood. So my second question...
If you said I said right initially, that if the LNG and all like we have to supply the [ tubes ] and all. The order book will not be lying in your ERP and you can say that I am in the order book position of this much value it will come after like a supplier -- next couple of months, 5 months, 6 months. So the orders are very dynamic in nature and moment they find that we are having a suitable quality of product at the right price [ they'll not only come ] and supply inflows. So that sort of thing is there and exported [ oil ] also will not remain in our order provision for the long time. They place the order and then within a very short time, we have to complete the supply.
Okay. And my second question was on the wide plate mill. When is that likely to get -- when is the plant fully likely to get commissioned? And in FY '23, should we assume a full year of operations and revenue contribution, and what could be that revenue contribution? And how -- what is your expectation of what kind of revenues you can do from the wide plate mill?
Revenue value I cannot tell you now -- right now, but [ sanit ] I can tell you, 30,000 tonnes is the capacity of this mill. And we have to plan on the product mix. If we are able to get the order for the high-value items, then our targeted revenue will be on the higher side. But for normal low-value steel, with the same amount of volume, revenue will be less. But definitely, once you are listening fully by this quarter end, or beginning of the third quarter, I am sure that we'll be utilizing these mills effectively in the FY '23 to the full capacity is our plan. And right now, I cannot say that we are fully geared up because things are going on and these products -- these mills are very, very precision and very unique in nature, so it has to be done progressively. So it is being commissioned now, strip by a strip. And I am only told in the beginning that initial indications are very good. So we expect that very soon we'll be getting in this mill in its full capacity. But it takes around 3 to 4 months to stabilize and get qualified for the entire products which we have planned, and for which this mill has been designed.
The reason I ask it, sir, because...
Mr. Bhutta, I'm sorry to interrupt, this is the operator.
This is an interconnected question. So I was just waiting for the management to finish that. Yes, if I can just go ahead. So the reason I ask is, sir, you've done a CapEx of INR 500 crores that would have -- and once that gets commissioned, you will have a INR 20 crore depreciation hit on that. So to cover that depreciation hit, will you actually do INR 100 crores of revenues or this [ actually would be ]...
No, no, INR 100 crores is really less. We will be having much more than that INR 100 crores if we are doing it is very less. -- will be definitely our target will be not less than INR 400 crores.
The next question is from the line of Rohit Ohri from Progressive Shares.
Sir, I have 2 questions. If you can just share the timeline of commissioning of these plants, [ Tumkur ], Kanchanbagh and Rohtak?
Kanchanbagh, as I said, already started, it will be fully commissioned in the month of November. So in December, we will be dedicating this to the [ nation ]. And so for time line for Rotakh also, armor plate also is more or less in the same period. And we have [ insight on a spring plant ], but also time line is in the same period. So you'll be seeing that by the end of third quarter, we'll be commissioning all 3.
Okay. And sir, we had this dispute over the land in Nellore along with the aluminum alloy plant issues. So has that been sorted with the government?
Look, I said dispute is already there. But what we have done, we have removed the part of the disputed portion from our boundary wall, and we have kept to put the boundary for the entire land which has been allocated to us. So minus disputed area, we have made the boundary wall. And finally, talk is on to get negotiated with the parties who are claiming and we have put the [ requisition ] in the court to do the settlement and get this land [ up for ]. But our project activity is not going to get affected because we have taken care in our boundary wall and whatever land we have earmarked for our industrial setup.
So this property was around 100 - 110 acres. So the boundary line which is made is giving how much [ cause ] of property to us?
It is -- basically, it was 110 plus only, but then those things have been removed. So near about [ 109 ] is there.
Sorry, how much? 109.
Yes.
Okay. So Nellore...
That's why I cannot tell you right now so...
Okay. That's okay, approximation is fine. My last question is that with this turnover targets and the visibility of all the 3 plants coming by Q3 or Q4 and translating into a growth of around 18% to 20%, which you have said that it is your vision. Can the turnover of MIDHANI be 2x from now in the next 5 to 7 years, translating into 18% to 20% growth CAGR?
Yes, it is our expected. We expect it to grow [ times ]. We have to see that how we are able to realize, convert those things into our revenue, but targets should be in that, in that range only.
We have a follow-on question from the line of Jinal Sheth from Awriga Capital Advisers.
On the -- amongst all the different projects, the -- over the next 2, 3 years, this titanium business could be what kind of revenue -- percentage of total revenue over the next 3 to 5 years?
Yes, it's a very important question. And also we are having a lot of brainstorming on the side and titanium since it is a very high-end item, even tonnage by it may not be very high, but it will have a, make a permanent place in our turnover. And I expect it will be not less than 30% of our revenue. as we grow further. And in fact, last year also, if you see in our revenue, it was almost around 20% we have titanium. So it is going to have prominent role in the future.
And what kind of realizations are in that business? For titanium?
Realization in the sense in which sector are you talking specific or?
No, that's fine. My second question I would want is that now, we've spent close to INR 850 crores, INR 900 crores of CapEx from 2019 to '22. And revenues in the last 3 years have been broadly stagnant. So with all the investments and diversification plans, I mean this is in continuation to the previous gentleman's question, but what we are saying is with all the investments and plans, what could be the revenue growth in the next 3 to 4 years ideally, because the money has already been spent, right?
Yes. See what happens that for any company, when the projects are in the line, and it takes time to get realized into the revenue. And both -- all the 3 projects, if you see our expenditure is not having at 1 time. Whatever we have done the investment of around, as you said, around INR [ 400 ] crores. More precisely, I think around INR 800 crores to INR 900 crores we have done is there in the period of 3 to 4 years. Now, I will say now this year, it is a year of completion. And it was supposed to get completed in the last year itself, some of the -- one of the other mill units, wide plate mill. But it got postponed and then we have come to this year because of the pandemic. And but it was planned early of this year, maybe on March of 2021. But now having seen the impact of provision now it is coming to almost a stage where we are finishing by the end of quarter 3 of this financial year. So but all those things definitely add to the value revenue. And as you have rightly pointed out that what is the outcome because already you have invested so much money, where is the revenue coming out of that. So all the 3 products have its own revenue model is there. And I'm sure that it will be definitely adding to Midhani's turnover in the future the next 3 to 4, 4, 5 years. We will definitely multiplying it and our orders would be -- the sales will be around INR 500 crores range. But as for any business that sort of thing is not only that whatever you have done as a CapEx, it also requires that how we are able to look at the market. See market for is very important. You cannot ignore the market dynamics. The projects are coming, but the market dynamics also they are changing. So 1 has to align with the market dynamics. And that's what we are trying to do. It was this product, what about INR 550 crores we have mentioned, it has become like a scheme initially thought of R&D projects. There are no revenue model from this business model. It will become a profit center. But now is the changed scenario and the [ steel have ] current market dynamics, we are converting to a business center, unlike the business model. [ That's what I would like to impress on you ]
We have the next question from the line of Abhijit Mitra from ICICI Securities.
The question is mostly on this the installation and commissioning of the capital projects. So just wanted to understand what are the risks to this commissioning, I mean that you see? Can there be further delays? And -- or we are pretty certain that most of the operational issues have been resolved, taken care of, to see a progressive commissioning over the course of next few quarters, as you mentioned. I mean are there any risks that you would want to highlight? That's point number one. Point number 2 is that I think you briefly remarked that 27% of your last year's revenue has come from titanium. I think that's a very, very -- I think there's a significant number and probably that explains the high gross margin. So how is this sort of -- and I would presume that this is mostly aerospace. So how will this number move over the next couple of years? And combined with space and titanium, what percentage of revenue will it be? Some idea on this would be great.
First of all, I'll talk about the projects which you have mentioned about the certainty and uncertainty in commissioning. Let me tell you 1 point. This wide plate mill, this mill was, conceptuals was done in the 2009. In 2012, the money was earmarked for this type of this facility. And when the money was given, and it was realized that it is not sufficient to install the machine of that quality and that type of performance. So there was a lot of mutation and combinations going on how to minimize the cost and all. But finally, with a lot of deliberations and understanding, 2017, we're able to place the order on Danly, India for the rolling mill and other facilities. Now Danly India is 1 part for the equipments and the other facilities, furnaces and all. But the basic civil design, conceptual design, then electrical design, everything was coming in our in-house with the people. And it was not a turnkey project and turnkey projects we have not done because we are not having sufficient money to pass on. So we have to economize that, and that's why we have handled the different. So at 1 moment of time, 30 different packages have been handled by the different -- our people inside. So those things took some time to bring it to this stage. And then followed by a moment we have started pick up this space. Covid has affected us a lot, which all of us are aware. But then I'll tell you that with a lot of profession and so many things our consistent effort, that mill has come to the stage where now I can say that it is 90% already we have through. But then 10% also has a 10% in project case. So the projects will be...
Participants, kindly be on the line. We'll just reconnect the management line.[Technical Difficulty] Sir, you are reconnected to the call.
Yes. I don't know where I got disconnected, but we were discussing about project condition. So what I would like to submit that a lot of -- so many activities are there for any projects. It is a combination of different activities. And anywhere you have some deficiency will lead to the adverse effect on the project progress. So in this total pandemic time, in the Rohtak plant I can give you an example, so many equipments which have taken from the foreign origins, their equipments have come on time and install and commission. But equipment supplied on the Indian party to the equipments have not come on time. So this -- as we are [ experiencing ] some delay, but then now we have taken up with the supplier very effectively. And I am sure that if the third wave is not there, there is no further disruption because of Covid, this will complete by October. All the equipments installed and commissioning. So this is about a majority of things already installed and commissioned there. And I'll tell you not and I cannot say it right now, declare it officially, but certain activities already we have taken and we have exceeded a certain order also already we have done the execution of the orders using those facilities, partially, not fully. So these are the different success stories are there. So I'm confident that whatever time line we have decided now, we are not going to deviate from there. They are [ quite level ].
Yes. I think the second question was on the titanium [ plus ] space. I think the combined proportion of revenue, how do you see that number moving over the next couple of years?
Titanium, why I have told you that capacity we are enhancing. Right now, 1 product I will tell you, titanium flat, titanium plates are being imported fully in the country because nobody is there to roll titanium. So wide plate mill, which we have set up here, we can roll the titanium plate and supply it effectively. So it is going to add further in our [ admin ] production capacity, which was totally depending on the import. One way of looking on that. Second part on titanium, that number of new projects which are coming in country where they have the requirement of titanium.Earlier, our [ old product outside ] was being imported. Now people are having some restrictions in going for global tender with less than INR 400 crores. So there also, I'm getting good support from the Indian industry [ who are making ] titanium alloys and different components. So there is a change in titanium, increase in the titanium requirement. And considering that only, we are setting up our new titanium facility, where we are going to almost make 1,000 tons of titanium per annum. So that's going to increase our capacity almost 2 times.
Ladies and gentlemen, that was the last question. I now hand the floor over to the management for any closing comments.
Yes, it was nice interactions with all of you. And whatever questions have been asked is quite relevant and is also putting the management on very, I'll say sensitive or proactive platform. So that all our ongoing program ongoing activities should be monitored and executed effectively. And so that whenever we approach to the investor, we should be able to tell them some of the new achievements and the new work which company has done. In fact, there was no question -- no question was asked about development for the different grades, which we have given for [ gotten in the larad ]. But you must have seen our different reports or highlights that we have done extensive work on development of some of the unique products, which have been -- some of the things that they already made has gone as imports or pursued. And out of them already we have exported also. So it is an ongoing process and MIDHANI, one of the biggest strength lies in research and innovation. So we -- every time we try to innovate, and then you see that how we can quickly convert into the products and the sales. So that way, our team is today geared up. We have a very strong team. And there's a consistent effort to make something new [ we do this ] also. So we'll be interacting in the future as we progress in different areas. Thank you.
Thank you, sir. Ladies and gentlemen, on behalf of ICICI Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.