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MSTC Ltd
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Ladies and gentlemen, good day, and welcome to MSTC Limited's Q1 FY '24 Earnings Conference Call hosted by Equirus Securities. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Ansh Manek from Equirus Securities Limited. Thank you, and over to you, sir.
Thank you, Karen. Good afternoon, everyone. On behalf of Equirus Securities, I welcome you all to the Q1 FY '24 Earnings Conference Call of MSTC Limited. From the management, we have with us today, Ms. Bhanu Kumar, Director of Commercial; Mr. Subrata Sarkar, Director of Finance; and Mr. Ajay Kumar Rai, the company Secretary. We will begin the call with the opening remarks from the management, and then we can open the line for question and answer. I now hand over call to Ms. Bhanu Kumar. Over to you, ma'am.
Great. Thank you. Good afternoon to all of you, and thank you for giving us this opportunity to talk about our Q1 results for '23, '24 and the key highlights of the performance during Q1 is the revenue from operations was about INR 193.64 billion in terms of value of those transacted through e-commerce and marketing. Marketing is, of course, a very, very miniscule percentage of this. This is on a stand-alone basis. And as far as consolidated basis, the revenue is INR 199.76 crores. This, if we compare with the Q1 of last year, '22, '23, then there's an increase of 2.53% and similarly, PBT of Q1 is INR 80.56 crores in comparison to INR 80.54 crores during Q1 of '22, '23. Now the highlight here is that last year, during Q1, there was an abnormal increase in the rates of iron ore and scrap as such, which had fallen during the year. And now it is more on a steady platform. In fact, the iron ore prices have fallen by almost about 20% or so during the year. So in spite of it, we are able to retain almost the same level of PBT. So that is quite an achievement for us.
Now regarding the other highlights, we have successfully hosted the UDAN scheme version 5.0, fifth tranche of the initiative by the Ministry of Civil Aviation, for connecting all underserved airport. So that has been very successful. And MSTC has been awarded the most efficient and profitable mainly Miniratna of the year in the nonmanufacturing PSU 2022 Dalal Street Investment Journal. And we have also done a lot of major mineral blocks, coal block options and major mineral blocks in the Q1. So major mineral blocks, we have successfully sold about 27 of them and many major mineral blocks are in the pipeline as on date. Coal block also successfully sold 6 and many more -- I mean, the repeat auctions are also being conducted now and it will be done during the year. Now as far as the financials are concerned, I'll hand over the mic to Mr. Subrata Sarkar. He will talk in detail about this.
Yes. As you have heard from our Director, Commercial, it was almost [ start up ] trajectory so basically, in spite of reduction in the prices with the higher volumes, we were able to manage that trajectory. So a stand-alone basis, it is total revenue has grown from INR 93.86 crore to INR 100.63 crore, a growth of 7.22% and EBITDA has grown from INR 67.67 crore to INR 72.27 crore. PBT has grown from INR 66.12 crore to INR 70.56 crore and profit after tax, it's almost on the same level with like from INR 43.85 crores to INR 44.57 crores. Accordingly, EPS has had a meaningful growth of INR 6.23 to INR 6.33. And so far, consolidated highlights are concerned so the total revenue is -- has grown from INR 194.82 crore to INR 199.76 crore, EBITDA has almost remaining the same from INR 86.85 crore to INR 86.02 crore. And profit before tax, almost remaining the same at -- on consolidated basis from INR 80.54 crore to INR 80.56 crore and PAT is down a little bit from INR 54.29 crore to INR 50.61 crore. And accordingly, EPS on consolidated basis is from INR 7.71 to INR 7.19 and the cash profit is also a little bit down from INR 60.52 crore to INR 56.08 crore. So it is all about from our side. So handing over to you for QA session.
[Operator Instructions] The first question from the line of Yash Dantewadia from Dante Equity Research.
Yes, am I audible?
Yes.
Yes, sir, you are.
Go ahead.
So my first question is, could you give us the revenue mix for the e-auction in terms of product break up for example, coal or mineral for FY '21, FY '22, FY '23, all the 3 financial years?
Product mix, especially of e-auction e-sale you want, right?
Yes. Yes, whether it's coal or whether it's iron ore or whatever [ product it is ], but I want the product mix for all 3 years.
Right now, I don't have it. But one thing I can confirm is from the scrap sale, it is about 52% of the total revenue. I don't have that breakup immediately.
Could you give me the break up off-line if possible later?
Yes, you can send a mail, we will definitely address that.
Yes. Okay. So what is your Coal India revenue percentage? What percentage of your revenue comes from Coal India?
It's not on percentage basis, it is on event basis. So if they conduct...
No, I mean for FY '23, for example, what was the total revenue that you got from Coal India?
See, I can't give you the exact numbers. But coal as such, the number of events is going down because the policy has changed to some extent. Now it is not mine-specific or colliery specific. So because of that, the number of events that you -- we used to carry in the last -- the past few years and what has happened now is definitely on the downward trend. So the revenue is coming up, the exact numbers, and I won't be able to give you.
So basically, you're telling me that the number of blocks of e-auction mines that are going to come on NCLT coal auction is going to be going down?
No, you are actually confusing between issue. For Coal India, we are selling their mined coal, right, for the blocks that are being mined by their subsidiaries. Coal block auctions, we are conducting for Ministry of Coal. There is a nominated authority who is conducting these coal block auctions. So there, again, whenever there is a successful auction of a particular block then we get on the business of that per event. So that obviously it depends on the market conditions, whether particular block will actually be sold or not. Now as far as Coal India is concerned, we are selling their coal through various schemes, through some linkage schemes and through normal spot auctions, forward auctions and all. So that is again on event basis. Now the -- because of the change in policy because the earlier they were using -- they were doing these spot auctions on certain criteria. Now that there is a change in policy because of which there is an aggregation of coal in any one particular event. And the number of events that we carry out in a month has decreased. Earlier, we were say, carrying out, say, about 6 to 7 events in a month. Now it has come down to about 4. But that again is seasonal because depending on the supply-demand conditions of the -- for the country and especially the power sector, the coal under the linkage scheme can be increased or decreased. And the rest, whatever is not sold through leakage, that only comes to spot auctions. So there are a lot of factors. You cannot actually simply say that whether it is going up or coming down, these are things that cannot be predicted at all.
The reason I'm asking you the question is, in the recent statement, Coal India said that their auction is going to go up. That's what Coal India give in their guidance. That is why I asked this question ma'am.
Yes, now what they mean is the quantum of coal that will be sold through auction is going up. But that doesn't mean there will be increase in the number of events. We charge on the basis of a event suppose I'm selling only about 1,000 tonnes in 1 particular event, suppose they want to sell 3,000 events, I -- my charges are the same. Okay? So it doesn't actually reflect, it doesn't actually affect my earnings.
Okay. It's a fixed charge. Okay. Ma'am although it is coming down, but could you please quantify as the e-auction volume would be largely constant on your platform? Or if the prices change or if the prices don't change, for example, if coal prices change or if coal prices don't change, does that affect you or effect the amount you charge on that particular event?
It does to some extent, but we are not so much dependent on only the coal auctions. So that is probably just a very small percentage of our total earnings.
Okay. Ma'am last question before I come back in the queue.
Yes.
Would you be able to give any guidance as to how this is going to pan out because basically now Coal India does all their auctions through you, right, exclusively through MSTC or they use other platforms also?
No, no, no, not really. They have 2 service providers. And in fact, we are not getting majority of the auctions. The other service provider is getting about 60% of the auctions. So that has been the case with the past 4, 5 years. So that hasn't changed.
So the other service provider, is private or a PSU?
Yes, it is a private party.
So basically, all the government companies are not obliged to go through MSTC, right?
No, no, there is no such mandate that government companies have to come to MSTC for all their requirements of e-commerce. Based on our credentials, we go we market ourselves. We go and tell them that these are the features and facilities that we have. And these are the governing agencies who constantly monitor all the activity. Because of that, they are a little more comfortable with MSTC. It's that people are bound to give their business only MSTC. It's not like that.
[Operator Instructions] The next session is from the line of [ Prakash Purva ], an Individual Investor.
Hello?
Yes.
I want to make certain general suggestions because they are very let's say new to a government company, your setup and the organization, which is 2,000 kilometers away from Bombay. One small maybe special request to you, all the Board of Directors, Chairmen, Directors and management team is that you make an investor presentation, 1 or 2 days before the con call, not 0.5 hours before the con call. It is both inefficient and unprofessional to give the information just 0.5 before the con call. And the attention, the respect and the guidance given by the Company Secretary Mr. Ajay Rai is very pathetic and poor. He cannot reply with arrogance with all the shareholders. See, I'm a senior citizen and we have dealt with many great people like P. C. Alexander and great people. See so you should not consider yourself above law. This is in general, I'm talking to you.
And provide the address of every director on the Board so that we can ask them the questions on e-mail. We don't want anything special. But on the -- and secondly, I'm very sorry, for the lackluster performance of the company, flat performance of the company for the last quarter. Very bad it is. Secondly, can we know how many centers we're going to open, scrapping center all over the country and the region wise or East, West, North South or the state wise. This is very important for the information of the shareholders. In the next 3 months or in the next 6 months and what is the cost of opening every center. This is very important. We do not have the basic information, which is not available in the branch level also. So this is my question.
Secondly, how many vehicles are going to be scrapped in the next 3 months or 6 months? You may not have statuses, but can you give some idea so that we don't get a lackluster performance of the company. Secondly, on a subsidiary company sale, we always say that -- FSNL, that things are under discussion, things are under progress. Every report says that, a quarterly report they say statement like that. But what exactly is the status now? Is the sale already up now because the processes are going on for the last more than 1 year? So we would like to know, is there likely to be a special dividend to the shareholders from the company? After sale of the subsidiary company is over. And secondly, I would request every director to provide their e-mail address so that we can address them freely and personally and thank you. Sorry.
Okay. First, let me assure you that whatever information is to be given is generally provided by the Board of Directors. It is not that we don't want to reply and anyway, however, your suggestion that you want the presentation to be given well in advance, that is well taken, and we'll see to it that this is done for future. Regarding the e-mail address and the contract details, sir, these things are very much available in public domain in our company website. So you can reach us anytime over phone, over e-mail, and we always answer each and every phone call and each and every e-mail is replied. So that's definitely for future, I'm sure that specific queries, you can address there. Now as far as regarding the FSNL case is concerned, you also may be aware sir that we may be holding the share but the -- all the decisions are taken at the highest level by the Government of India. And most of those decisions even we are not privy to such decisions, and we are not even present in those meetings. So obviously, we are not in a position to reply to investor queries on this. And as far as the other centers are concerned, I would request my colleague director to reply on the MMRPL set up, right?
Like it is -- last in the -- last here con call also, it is very difficult to tell how much it is been there different location. At different locations and at different places, the costs remains fluctuating. Somewhere we can have a [indiscernible] somewhere we have bigger for [indiscernible] further, we will decide upon the number of vehicles, what are the equipment has to be installed at that particular staffing center. Now it is known as RVSF, Registered Vehicle Scrapping Facilities. So depending upon our regulations and all these things to get a certificate and all these things to comply with the regulations, that equipments are kept there. So it keeps on increasing or decreasing our cost as such. So far, in the -- so far, there are 2 types of things. One, at our scrapping facility and there we must be knowing that government vehicle scrapping has already been mandated, and it is being done through MSTC portal. So right now, it is as per our estimate, around 4,000-plus vehicles are coming up in the forthcoming auction to be sold and total vehicle since March has been sold is 8,586 to the Registered Vehicle Scrapping Facilities, RVSF assets. So that is the figures of the government vehicles that has been scrapped. And yet to the scrap, I have given around 4,000-plus it will be around -- it is there and it will be auctioned. So I hope I was able to satisfy your question, sir.
The next question is from the line of Harshit Jain from RAH Investments.
Firstly, I would like to know, as per Mr. Nitin Gadkari statement came that there are total 31 centers which are currently opened and current capacity is 930,000 cars. So as per the comment given by Mr. Subrata Sarkar, we only auctioned 5,000 vehicles and almost 4,000 to 5,000 vehicles are under pipeline. So is this the scrappage working on just 5% to 6% capacity utilization?
Actually, what we are talking about here, the figures that we have given is based on the government vehicles only. See MSTC has been mandated to sell all the government vehicles, so the figures that we are giving is what is there, what has already been projected to us for sale. Now such vehicles are just about 15,000 to 20,000 within this current financial year, it's not going to be anything more than that. Well, what the Minister -- Honorable Minister has talked about is the capacity of all the RVSF put together. Obviously, for that, there has to be a lot of feeder stock from the private industry as well as individuals. For individuals, we have already launched a portal, and we are conducting a lot of awareness campaigns and advertisements for individuals to approach and give their vehicle for scrapping. The issue that -- the issues that are faced by RVSF are in respect of ATS centers not being there. The complete ecosystem is not available. It is not just about setting up the RVSF, you also need to have the automatic testing stations. And we also need to have -- especially for the government vehicles. There has to be a budget approval for replacing the vehicles for scrapping by new vehicles. Now there is a mandate for going for electric vehicles. That kind of supply chain is again not available in the country. So it is not just about demand and supply. It is also creating the entire ecosystem. So those things are still at quite a nascent stage. And unless we achieve some more -- some better facilities, this thing is going to take some time. I hope I was able to clarify your query.
Through our portal are the private vehicles also coming on our portal, where we are earning 3% per vehicle?
For private vehicles, we are not earning on those charges. We are just charging on some listing facility. It is more like almost a free service for the individuals of the country. Now if it is going to be some institutional seller, yes, there we will be getting some charges. But as far as individuals are concerned, you and I, we can just go and there will hardly be any charges for that.
Okay. And my other question would be a very humble request from my end, just like the previous participant and all other PSUs, just like Mazdock, SJVN, Bharat Electronics, N number of PSUs have been sharing their updates regularly with their investors, stakeholders on a regular continuous basis. But as in our case, you guys are not being investor-friendly, not sharing any update. I have already given suggestions in 2, 3 conference call that can you please share monthly updates that what actually we are doing. Even we are working in a duopoly business where just MSTC and M-Junction are the sole platforms, which are auctioning everything in India. But still you are not able to leverage our company. So may I know that what actually is hampering this and what actually is preventing you from sharing updates to investors as a whole?
I mean, which type of updates you are looking for, if you can guide us so we can consider or we can think if it is as per -- so...?
Yes, because just now, like if you search Google, you will come to know if that Hyderabad authorities sold somewhere around INR 7,000 crores worth of plots through our portal but you guys have [indiscernible] actually you're doing. Spectrum auction, you did it and N number of auctions, you are doing auctions for United Group as well, more than INR 500 crores property. But you have been not been sharing any kind of update. I even requested Mr. Surinder Kumar Gupta 2 conference calls back, that you can please share updates on a monthly basis...?
Let us have you have our response, sir.
Sir, we fully -- we can understand your concern, but you please try to understand, these are the normal course of business. So for any normal course of business for day-to-day operation, we are doing the auction, we are doing everything. So do -- whatever you are mentioning, these things are normal for our operation. We cannot update each and every auction on the investor portal or to the [ stock exchanges]...
Concern is that we -- my only concern is that we are a good e-commerce company. We are almost a monopoly business but we are not able to leverage our company. Nobody knows about our company what MSTC is doing? What MSTC does? We are really a scrap company as per investors. And secondly, whenever you deliver quarterly results, you show other income, INR 18 crores you show e-commerce, INR 84 crores. When you go down, when you go to [ segment ] revenue, there e-commerce is mentioned INR 94 crores. So why there's a mismatch?
Which one, which one just tell me? Where it is a mismatch? You tell me.
You can check this quarter current year results. And in current results and in the stand-alone basis, you have mentioned INR 82.33 crore is your revenue from operations and other income is INR 18.29 crore. But when you go to segmental revenue, there, you have mentioned from e-commerce, you have INR 194.05 crores, and from marketing, you have INR 16.4 crore, so we have been earning INR 94 crores through our operations, and you are showing INR 18-point-something crore from other income. Why there's a mismatch?
Yes. Look, when we go for data segmental reporting, we currently see that it is for the total income. Here is a pickup, revenue from operation and other income when we report for our quarterly result. So there will be a mismatch. There will be always a mismatch because here, the breakup of total income is given. Here the breakup of only revenue from operation and other income is given. There will be a mismatch. So it is nothing to hide or nothing to hide from the investor. No...
No. But I think this can be done in a more efficient and transparent manner. So that investor community as a whole can understand your results because right now, nobody is able to understand results because everybody thinks e-commerce business is showing degrowth. But on the other hand, if you check segmental revenue, we have grown 12% from last year.
Okay. Your suggestion well noted, if it is feasible as per our disclosure norms, obviously, we will look into the suggestion.
And secondly, I just want to know that why are we paying 37% tax rates? Because if we are paying more tax rates, next quarter you will again show an entry so that you can adjust the same taxes again. So what exactly is happening? Because I'm not able to see I've been investor in your company since 3, 4 years, but this is a certain lackluster performance and no commitment given by your end, by management, by Board of Directors, investors are just sitting idle. They don't know anything about your company, whether you can check the books, whether you can check entry.
This type of commitment...
And secondly, your answers are very vague. I am not able to get any clarity. Even I asked you previous quarter, you were not able to provide me satisfactory response.
Just a minute, what type of commitment do you want from us? Please tell me.
Sorry?
You asked about the commitment from the management, okay?
Right.
So which type of commitment do you want from us so that you will be confident?
Yes, to be more transparent. You need to show your books clean because right now, our books are not clean, every quarter or there, you show some entry. Every quarter, you pay -- some quarter you pay 9% at some quarter you pay 37% tax.
Just a minute, just a minute, to be very frank and precise with you. Whenever there is a write off is there. So then there the tax rate goes down and write-ups are based on certain parameters. Every quarter, we cannot make write-up, every date cannot be written off until unless each and every hope has gone down. We have made provision for all the debt, bad receivables that we had. We have cleaned up our books. Everywhere it is done. Now it is the point when we write-off or we will not write-off. Write-off has got certain norms until and unless we expect and hope that everything has gone out of this particular data. We cannot write it up from the books of account, you will also appreciate like an analyst. So that's the point. So whenever the write off occurs, we get that tax benefit. So if you feel more clarification, you can go for mails and all, and we reply on the mails also, detailed reply has also been done through mail because 1 hour is at -- I feel a little time to just satisfy the investor queries.
Mr. Jain, I'm sorry to interrupt, but may I please request you to rejoin the queue for a follow-up...
And Mr. Jain, I'd like to comment on the previous queries also that he has raised certain query that information is not being provided to him. I will request all the investors to understand that when the trading number is good, these company secretaries cannot entertain the investor or any shareholder or provide all the information. When the Board meeting is going on and when the notice is provided that the Board meeting is scheduled to be held at 2:00 p.m., if any shareholder will call me at 3:30 p.m. and ask me why not the account has been uploaded, please try to understand we cannot answer that query. We cannot be able to receive that query. Similarly if that investor meet has been postponed. So there must be some emergency. There must be something. We are all human beings. We are all running through a lot of problems. So every time for every small things, why the investor presentation has not been uploaded? Why it has been postponed? When you are going to upload? When your board meeting is going to be finished off? These questions cannot be answered. So investors and shareholders also have to understand these small things.
Mr. Jain, I would request you to rejoin the queue for your follow-up. The next question is from the line of [ Srinivas Reddy ], an Individual Investor.
Yes. Yes. Regarding the suggestion by the earlier person, I think it is better for instead of the company management answering it on an individual basis. You can, in your website, Investor Relations, put all these questions and then answer so that every one of us will be on the same page instead of trying to repeat the same answer for the different investors from the company management perspective. So you -- all the previous -- whatever the questions or emails you will be receiving from the investors, if you can answer them in a transparent way for the benefit of all the investors, then it will be good for the company, a brand building for the valuation as an e-commerce company for the company because as earlier spokesman has clearly stated, I have been asking this from the past 10 years as a shareholder.
So before the listing has happened also, I have been a shareholder of your company. So the problem with -- is you are still working with the mindset of as if it is a scrap company itself. And the market is also giving you the valuations of a scrap business only with less than [ INR 0.10 ] around [ INR 0.10 ] price earning multiple only. But other e-commerce companies are getting [ INR 0.40, INR 0.50 ] price-earning multiples. So the perception change is required, sir. I hope that you will be considering this. And the accounts from the past 10 years, I have never understood. Because every time there will be some contingency planning or some provisions and next year, some adjustments and all those things. So you better look into it, get a consultant and try to provide the accounts as other PSUs are providing, not the legacy systems. So it will be transparent and beneficial for all the shareholders in the future.
As far as the second question, my second question goes, sir. Regarding this disinvestment, FSNL, you already spoke about that you are not in control of anything, but at least you should be able to tell from your end, whatever the previous surveys, which the people have come and then checked, it is completed or not yet completed because there were some earlier reports that some employees were not willing to allow them into the -- for the -- into the plants, for doing the due diligence part. So secretly or whatever it is, hiding the rate and you're trying to do it. That was the news flow. So you can tell at least, is it that completed or not? I mean, the due diligence process, visiting the local FSNL plants on all the due diligence by the buyers. And this consolidated numbers, your degrowth is clearly visible. Sir, we want to know the reason and the future line for the scrap business growth also if you can give it, it will help us a lot to stay as an investor in your company.
[ Mr. Reddy ], thank you for your very valuable suggestions regarding Investor Relations portal. Definitely, we will work on that and your suggestion is very well taken. We'll definitely work on it, and all your queries will be replied there so that all investors can go through that and the queries are there in the public domain. Now regarding FSNL status, Subrata, you want to say something?
Yes. So [ Mr. Reddy ] you asked about that process is still on and it is being followed up by DIPAM, Department of Investment and Public Asset Management. So that process is yet to get completed, but it is on the process only. Various states are being taken and various -- it is in the various [ dates ]. So it is still going on for regular update, you can visit the DIPAM website, where in the public domain, it is totally visible in what stage it is, if you click FSNL status it is there, it is regularly updated. So last that some [ EA ] was called from the prospective bidder. It is already there in the [ EA ] that is being...
Sir, from the past -- sorry to interrupt you, sir. From the past 3 years, we have been -- they are -- I have been asking the same FSNL news is going on. But see, the problem is we -- I'm visiting that sites, investors are visiting, but the due diligence process is being taken into almost like 2 years now for the plant due diligence. So I just wanted to know, is the due diligence completed or still it is spending from the prospective buyers?
Yes, this process is still going on. Yet to get completed, whenever there will be a second stage of asking for bid will open, we will -- certainly, it will come into the website, and we will let -- it will be in the public domain only sir that much we can assure you, sir. But still, it is going on, sir.
Okay. So I request you, sir, regarding this accounts. So from you -- at least change the...
Sir, you had the question about the consolidated group number, no. Can you please repeat the question? What was the group questions sir?
Your consolidated numbers of profits are showing a degrowth and EPS is also showing a degrowth, stand-alone is, okay, I mean, you have gotten almost same...
So sir, there are 2 things, stand-alone comprise -- the consolidate provides for our -- performance of our 100% subsidiary, Ferro Scrap Nigam Limited. And of course, what you can see, there is a 1 line item that is visible, that is a major cause of you see that degrowth like INR 121.99 lakh share of profit and loss from joint venture. So this quarter, there was a loss of the -- from the joint venture to the tune of INR 1.22 crore, this is basically because of some centers have taken, but yet to fly off and generate enough revenue to have [indiscernible]. That's the 1 cost and FSNL performance is also on a -- not on a track -- it is also on a flatter trajectory. So both the factors has made to have little bit of degrowth in the consolidated numbers.
[Operator Instructions] The next question is from the line of [ Mustafa Arif from NRC ].
Sir, I would like to know that in the marketing business, what would be the revenue on a steady state? And also how do we see the cost of goods line item, in the BG model? Is that -- does that good to zero?
See, as far as the marketing business is concerned, you all are probably aware that we had 3 models earlier and we have discontinued 2 of them just the BG-backed model is available. But there also, it hasn't taken much traction because most of our clients are finding it difficult to provide the BG because of stricter norms and limits by the bank. A lot of due diligence is being done by the bank. So this is more or less stable, and we don't envisage that it is going to grow in the future. So the revenues are going to be flat, whatever it was in the last couple of quarters. It's going to be more or less the same. But as far as e-commerce is concerned, definitely, it is on the growth trajectory and especially since the iron market has stabilized now and it is expected to slightly go up, we expect that our revenues will also be going up. And we are in talks with various government departments for further more projects. And in the coming next quarter, there will be some update as soon as we finalize some contracts or something. As far as our recycling is concerned, our JV company is expanding its operations. So obviously, in the initial stages, there will be a loss because each center as soon as it is set up is not going to make profits, right? So definitely, this may be there for some more time, but we are on the right path to expand its operations so that all the material that -- raw material that is available is converted to scrap and is given as a feeder to the industry for secondary steel manufacturing.
Okay. And another question is, so what is the current status of the Standard Chartered litigation? A few days earlier, you had provided an update.
Yes.
Yes. Let me explain you that, of course, you have seen the update that DRAT in that INR 222.51 crores demand matter has recent -- that we have made an appeal to DRAT and DRAT has kept aside the order of [ PRT ] in our favor. So that's now -- so we are in a favorable position accordingly by its overall order also that DRAT has ordered for the refund of INR 90 crores. And the recovery proceedings by overall order has already been -- we are waiting for the return orders for both the things that recovery proceedings have also being dropped from -- that the proceedings have been dropped. So we are waiting for both the return order like refund order and all these things we are waiting for that as soon as we get the refunds, we will update you. But the news is good, like we have won at DRAT, sir.
[Operator Instructions] The next question is from the line of Chirag Singhal from First Water Fund.
Just 2 questions from my end. First, how much of the revenue comes from our real state business with minimum volatility where you're not dependent on any one-off events such as auction of any mining blocks or so? Just trying to understand the consistent stream of revenues in the e-commerce segment.
Is that all? See, as far as the revenue in e-commerce sector is concerned, about 50% comes from scrap, which is more or less stable and it has been the case for the past many years. Regarding other products, the prime products, which we call mineral sale or some waste raw materials and all and property. There it is on a growth trajectory, and we don't see any threat as of now. As far as that business is concerned, that comprises of about 20% to 25% of our revenue. The rest is what is one-off kind of a case. But there again, say, mineral block or coal block. Now a lot of blocks are given to us for auction. But everything doesn't gets sold at the same time. So this is a very long process. And if you have seen every year, we are earning some revenue from the block sale itself. So this is going to be there for at least a couple of years more. Apart from that, we are giving some value-added services to our clients, especially in the miner [indiscernible] blocks like integration with their state portals and all. So with that kind of comfort and that kind of transparency and ease of doing business since we are able to give because of that, the clients are more or less happy with our services, and we don't envisage that they will go away from us for at least a couple of few -- a few more years.
Got it. So 25% of the overall e-commerce segment that came from the auction of the blocks is what you're saying. And the rest is more or less kind of content, the balance 75% which is again growing...
No, 25% includes actually the block, the minerals that are mined then the forest agro produce that we sell then some waste material like fly ash, which actually goes as a raw material for the cement industry. All that put together is about 20% to 25%.
So could you provide me how much of it...
This is one-off kind of a event or customized models that we prepare for government or the private sector. So the rest of 25% is what is on a case-to-case basis. And that also is not under very severe threat as of now.
So is it possible to share only for the auction of the blocks, how much came from auctioning of the blocks?
That would be very difficult to say see because every time we put up, say, around -- last time we had put up about 90 coal blocks for auction and eventually only 6 were sold. Now when it is sold and finally, when we get the result in that quarter, we reported at 6 blocks. And previous -- last year, we were able to sell about 20 blocks. So I'm not really sure -- and per block, I get some revenue. So I'm -- I cannot foresee as to how many blocks will be sold in a particular year. So it's very difficult to predict.
Understood. Okay. My next question is on the...
Mr. Singhal I'm sorry to interrupt, may we please request you to rejoin the queue.
Then there was just 1 question. If you can please let me ask the second question?
Sure.
Yes.
Yes. So my second question is on the growth guidance for this particular segment. So based on the visibility of events and the inclusion of the new categories and products that you've been doing on your portal, what kind of growth do you see for this particular segment for this fiscal as well as next fiscal?
See, we said last year was very good in terms of the prices because we have a -- revenue is actually a mixed kind of model that we have. We have on event basis as well as on percentage basis. So when it is on percentage basis, when the market goes up, obviously, our revenue goes up. But if it is on event basis, it has a very flat trajectory. Since that is a composite mix of both these models, I would say it will not be an exponential growth, but there will be growth.
So can we take a range of 10% to 15% assuming that the current commodity prices stay as they are for the rest of the year as well as next year, 10% to 15% will it be something...?
Based on past performance, definitely, you can take that figure, but then the market conditions will always not remain the same. So if something unfortunate happens, a sudden drop in some kind of the factor that it is going to affect. Otherwise, this is a reasonably good estimation, I think.
The next question is from the line of Keshav Garg from Counter Cyclical PMS.
Sir, firstly, I want to understand in your investor presentation on Page #6, the total value of goods traded through MSTC ecosystem has reduced from -- by 18.5% year-on-year. So sir, what is the reason for this?
See you're comparing Q1 and Q of last year and Q1 of this year, right? This is mainly -- yes, this is mainly the coal and iron ore that we were selling last year. As I said, the iron ore prices have fallen quite significantly in comparison to Q1 of last year, almost by around 20% and coal, it doesn't actually matter as to what is the volume and we -- because we charge on event basis, so there also, based on the policy of the government, whether it has to go to a particular sector, the volume that is offered for sale on open market, that is also from time to time that changes. So because of that, you can see, the mainly the -- I think the contributory factor is iron ore.
Sure. And madam, we have around INR 1,600 crores of cash with us and net cash is around INR 1,475 crores, which is 55% of our market capitalization and still we aren't doing any share buyback even though the government has repeatedly directed PSUs to go for share buyback. But I don't know why we are very comfortable sitting on cash, which is hardly giving shareholders any return in [indiscernible] adjusted. So please consider a share buyback.
Sir, your suggestion well taken. So from where this INR 1,600 crores came, I do not know. So this quarter, we have not published any balance sheet and all these things. So of course, we will review the situation at -- on 30th September. If as per the -- actually, the buyback norms are governed by the DIPAM, DIPAM is clearly stated at which position this buyback will occur. So of course, your suggestions are very prime important to us. We will look into that and we will discuss internally on that particular solution. Of course, after reviewing the 30th September situation, how much cash is with us only, okay? Rightly, your suggestion is taken at a very positive note from our side, right?
The next question is from the line of Raghav Agarwal from Kredent Family Office.
So I basically wanted to understand your end-of-life vehicle business model. So I heard you say that the private people listing on your portal quarter would be free. So is there a difference between MSTC portal and your subsidiary with Mahindra for the scrapping center?
Yes. Actually, what we are talking about here is MSTC has been mandated to auction all the end-of-life vehicles of the Government of India and the -- and advisory has been given to the state government for channelizing all their ELV through our portal. Now as far as private sector is concerned, there is no such mandate. And obviously, a large chunk of ELVs are with the private sector and private individuals. For private individuals, we are just charging some very nominal a few hundred rupees as listing fees because we are just giving them a facility of access to all the registered RVSFs and the RVSFs are supposed to actually bargain with them and then take the vehicle. So there's no actually role of MSTC. We are just providing a platform for ease of doing business with the RVSF. Now MMRPL is one of the RVSF. They are one of the bigger who take vehicles from our own portal. They also compete with other RVSF. They do the bidding, they -- once they become H1, they take the vehicles and then they do the scrapping. So here, as MSTC, we are offering e-commerce services for sale of ELV. And our JV company is doing the scrapping business along with 30 more RVSF in the country as on date. So they are facing severe competition and through competition, they are getting the vehicles, and they are dismantling and producing the raw material for the secondary steel sector.
Can you tell us something about your market share right now in the RVSF segment with your JV? I mean, are you the market leaders or there many more competitors and any time line of how much scrapping we are going to do through the RVSF in the coming year?
See, we definitely had the first-mover advantage. And as on date, also the maximum number of channel like the portal -- the vehicles that are going through our portal is going to our JV company, but they -- it depends on the location. See, if in a particular location, there are a large number of vehicles, then obviously, it is going to be distributed amongst various RVSFs like the case of NCR. There are about 3 or 4 full-fledged RVSFs, and some of the RVSFs have invested heavily, including a shredder and everything. So obviously, the volumes get distributed between multiple RVSFs, where we are the only RVSF, obviously, all the vehicles that are scrapped in that area goes to our facility only. So it depends on the location. But as far as the market share, if you say nobody has done this analysis, but we can safely say that we are getting the maximum number of vehicles and we are having the presence in largest number of centers.
The next question is from the line of Maan Vardhan Baid from Laurel Advisory.
I just wanted to know the average age of employees that we presently have.
It is around at about 37 to 38. I don't have the numbers ready from the past data and memory, I'm actually recalling and telling you this. And we are in the process of some more recruitment at the entry level. So average is -- average age is likely to go down further.
Okay. And sort of in terms of recruitment, where are we doing a recruitment from in terms of -- especially in terms of engineers, et cetera, what kind of institutes do we...
Our recruitment at the executive entry level is through a pan-India competition -- competitive examination and a group discussion. And we have already advertised for various streams. We need people in the tech field that is the systems department and HR, the finance, the operations, MBA marketing. So from all kinds of fields, we are doing the recruitment. All these details are available in our company website as well as the public domain also. Our advertisements and all.
The next question is from the line of Yash Dantewadia from Dante Equity.
So ma'am what percentage of your revenue is coming from private players as of today? In your e-commerce business?
See actually, the private player business have started very recently. You are aware probably that only the last 4, 5 years, we have done some listing. So we've not done any estimation like that, but I think we can take it as about 10%.
Yes. And also in your previous...
Okay, now I don't have any data to support this. I'm just making some mental calculation, and I'm telling you this.
Understood. Ma'am, in your previous con call you gave a 15 lakh figure that 15 lakh cars are getting e-auctioned right, scrapped basically. So ma'am can you -- the government has mandated for these vehicles to go through you through MSTC. So the 15 lakh vehicles what would be the time line for this? And what is the ballpark trends actually value for these 15 lakh vehicles. The number of years by do you think you will take to process this transaction?
One second, your voice is not coming very clearly. Can you just repeat the question?
I'm repeating it, ma'am. I'm a able -- are you able to hear me now?
Yes, it's better now.
Yes. Yes. In your previous con call, you gave 15 lakh figure, right, the 15 lakh government vehicles that we scrapped. Since the government has mandated that this scrappage has to go through MSTC, could you give a ballpark transaction values for these 15 lakh vehicles and also the number of years it will take you for -- it will take you to process this 15 lakh figure. Because right now, you're at a very lower run rate, you are doing I think 8,000 vehicles or 10,000 vehicles, right, is what you said. So this 15 lakh vehicles how real is it? Ma'am like how much time do you think it is going to happen and if it happens? Can you give us a brief understanding.
See, yes, I replied in the earlier query also that MSTC has been mandated to auction only the government vehicles, okay? And advisory has been sent to state government for training policy so that the ELVs can be channel through our portal. Now many of the states are still making those policies. It's still at a very nascent stage. Now the 3 lakh vehicles o3 2.5 lakh vehicles, whatever figures you are quoting is not just the government vehicles. It involves the other vehicles also. Now for the government to scrap their vehicles, they need to have a replacement for which a budget is required. So those things have to be in place for these vehicles to come to us for scrapping so this is going to take some time. So obviously, it would be in thousands as of date. And going forward, once the older vehicles get replaced in a phased manner by various government departments, all these vehicles will be coming for the scrapping. So market is a very major criteria for acquiring new vehicles once that is done, all these vehicles, we can see the numbers going up.
The next question is from the line of Harshit Jain from RAH Investments.
Yes. Actually, I want some more clarity on StanChart dispute. So I just wanted to know that whether we'll be receiving INR 90 crores that were paid to them or we need to pay INR 222 crores to them?
Yes. No, no, no. So let me clarify 2 things. First, the INR 222 crore order has been kept aside by the DRAT, Debt Recovery Appellate Tribunal, and they have also ordered for the refund of INR 90 crores. As and when we -- this requires certain process and then when the amount is credited to our account, we will let you know clearly. So it is for sure as of May day, as of now that refund order has already been given by DRAT and because of tax orders in our favor. So no INR 222 crore payment right now, rather the INR 90 crores deposit will be refunded to us in addition to that, the recovery proceedings has also been dropped and we are waiting for that return order also.
Okay. So after this is done, our books will be clear, no long-term borrowings and our liability will reduce by INR 142 crores?
But this is, of course, subject to certain regulations and regulatory authority. Right now, I cannot comment on this particular aspect. Let us examine the orders. Our legal person will examine the orders and that things and accordingly, whatever is required as per the law, it will be done, sir...
And my last question for me regarding, I just want to have some more clarity that how easy it is for us to change from event basis to percentage basis because we are doing big volumes lately? So if we can change from event to percentage basis, this will have a massive impact on our financials, and we can grow in big numbers. So how easy it is for us?
No, it is not at all easy. In fact, wherever we have agreed on event basis, the numbers actually is not of a big material to us because here, we are talking of say blocks, coal blocks. If it is going to be INR 1 lakh crore kind of a coal block. And I cannot be asking for a percentage out of it because the process for a smaller coal block and a bigger coal block that is very sought after the process remains the same. So nobody is going to pay me on the basis of percentage for such events. So it is almost not possible to switch from event basis to percentage basis, at least in such auctions. So wherever it's possible, we are already on percentage basis.
Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to the management for closing comments.
So today, we had a really good brainstorming session, and we have noted on lot of suggestions that have come from the investors. Thank you for taking so much keen interest in our business and the financials and your suggestions are always welcome. Thank you once again.
Thank you. On behalf of Equirus Securities, we conclude today's conference. Thank you for joining. You may now disconnect your lines.
Yes, thank you.