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Ratnamani Metals and Tubes Ltd
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Ladies and gentlemen, good day, and welcome to Ratnamani Metals & Tubes Limited Q4 FY '22 Earnings Conference Call hosted by Monarch Networth Capital.
[Operator Instructions]
Please note that this conference is being recorded. I now hand the conference over to Mr. Sahil Sanghvi from Monarch Network Capital. Thank you, and over to you, sir.
Thank you, Liza. Good afternoon to all. On behalf of Monarch Networth Capital, we welcome you all to Ratnamani Q4 and FY '22 Earnings Call. We are delighted to host the management of that company today. And from their side, we have Mr. Manoj Sanghvi, who heads the Carbon Steel division; and also the CFO, Mr. Vimal Katta.
So without taking any much time, I will hand over the call to Mr. Manoj Sanghvi for their opening remarks. Thank you, and over to you, sir.
Yes. Good afternoon to all the participants. So I welcome you to this call and hope everyone is doing good. Our results explaining the performance has been uploaded on our website, and I hope many of you have had a chance to go through it.
I would first like to give you a brief on the numbers, and then we can take questions. Now while narrating the numbers, it gives me an immense sense of satisfaction to inform you that FY '21, '22 has been the year of unprecedented revenue and profits, where the company has delivered highest ever annual revenue and profits in its 38 years of history.
Our revenues have increased 40% year-on-year and 5% on a sequential basis. For the full year, FY '22, it has increased by 36.6% as compared to FY '21. EBITDA has increased to INR 178.4 crores from INR 141.3 crores on a sequential basis, registering a growth of 26% on a year-on-year basis, albeit our EBITDA margin has slightly contracted on a full year basis by 200 basis points.
But in this quarter, due to picking up volume of [Technical Difficulty] products, the EBITDA margins have improved to 18% from 15% on a sequential basis.
Net profit margins have improved in this quarter to 11.3% from 9.5%. And for the full year basis, we have seen contraction of around 160 basis points, mainly due to inflationary pressures witnessed in the operating ecosystem.
Company's cash profit has increased to INR 402 crores from INR 332 crores on a full year basis. And quarterly increases by 25% sequentially and 8% on a year-on-year basis.
Our earlier CapEx has picked up well. And last year, all products have performed well. That is carbon steel ERW, SAW pipes, stainless steel, seamless and welded tubes and pipes. Our utilization levels have improved, but such high revenue growth numbers are also on account of steep rise in the raw material price. Optimization of profitable product mixes, prudent procurement decisions and product pricing discipline, coupled with strong cost controls are some of the main reasons behind this excellent operational and financial performance.
As you all know, commodities in general, especially metals and that too steel and stainless steel, in particular, have been extremely volatile over the few months. And the ongoing Ukraine crisis, coupled with COVID restrictions in China obviously has made supply chain and business complex. With strong demand witnessed in India and overseas, we have witnessed good order booking across all segments. So the order booking as on 1st May, the total order book is INR 2,223 crores. Since its financial year beginning and there have been lots of changes in terms of geopolitical situations, inflation, rate hike, tapering of liquidity, volatility, et cetera, et cetera. It would be very difficult for us to give the full year guidance. However, we are internally targeting a growth of 15% to 20% at a constant price basis for this year. We have witnessed good momentum in order bookings. But with the present inflationary outlook and geopolitical situation, it is to be seen how long the same is continued. However, we believe once the steel prices will stabilize, there will be good traction and we may see good bounce back in the business climate.
Something on the CapEx update. Company is undertaking the capacity expansion for stainless steel tubes and pipes for approximately INR 180 crores. This will be operational in the next 18 to 24 months. Further company is also increasing capacity for carbon steel submerged arc welded pipes and coating at the new location.
CapEx for same is expected to be around INR 170 crores over a period of next 18 to 24 months. Both CapEx put together will have a financial outlay of INR 350 crores to INR 400 crores over the next few years. We can fund the CapEx through internal sources with some debt component if needed, for better capital mix.
To conclude, I would just like to say that things are moving more or less as anticipated, mainly for our recent CapEx utilization have increased and mostly stabilized. Products have been overwhelmingly accepted by our customers due to high quality and precision and numbers have started growing.
We thank all of you for healthy discussion and patience in hearing and welcome your questions. Thank you.
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions]. The first question is from the line of [Ashit Modi] from Equirus.
Ashutosh here. Firstly, congratulations on the good set of numbers for the year and quarter as well.
The audio from your line is sounding very soft. Can you come a little more closer to the mic?
Is it better now?
A little better. Thank you.
Firstly congrats on the good set or numbers on annual and quarterly basis as well. Now this asset scaling that you're announcing is basically for which kind of pipe, also carbon steel, I mean, which kind of pipes you're looking at because you already had seen capacity, so is it for different pipes?
It is stainless steel tubes and pipes, seamless, welded is a mix of all. So it's a capacity expansion of the existing product line.
So -- but we actually added the 20,000 tonnes capacity that is not fully operational [indiscernible] . So is it a different kind to that you're targeting through this expansion or the same [indiscernible].
No, the 20,000 tonnes is extrusion trade, which is hot finish. This capacity expansion is for the current capacity what we already would have for cold finishing.
Okay. So the cold finished will go from -- where to where?
That number update on the capacity from where to where we will get back to you.
Okay. And in carbon steel, which segment we are adding like -- you said saw, but is it helical saw or LSAW?
Yes, it will be helical saw along with coating plant.
And you're looking at location outside Gujarat?
Yes. Location will be outside Gujarat.
And you said 15% to 20% growth you're targeting for next year? Is it a revenue growth number or volume growth numbers?
This is the revenue growth number. It can be 20% to 25% also.
Okay. Because we already have this INR 970 crores sales in last quarter so ideally --second half, we did very well. So I think...
But with the correcting raw material prices, I can say 20%, 25%, but if the raw material prices drop further, so it will have a direct impact on the revenue.
Okay. But the EBITDA margin probably in that case will be higher, right?
It will remain range bound between 15 to 18.
Okay, and last time, you had highlighted about whatever we have bid in the carbon steel and stainless steel segments. I think we had last time we had like 600,000 tonnes we had bid for. And out of which some 4 lakh tonnes was oil and gas and water and all. Any update on where we are in terms of what we have already bid for in carbon steel and stainless steel segment.
In last quarter, when the update was given, most of the tenders have been finalized, so which have some [indiscernible] and the announcement were given to the exchange and must have come to you also. So right now, for carbon steel, about 10 lakh tons, both in oil and gas as well as water is under bidding.
10 lakh tonnes okay. And can I write which projects -- like which are the bigger projects out of these?
Plenty of projects because state-wise, there's Gujarat to Madhya Pradesh, in South also and then the oil and gas -- some of the oil and gas projects in the East also. Last time there were 1 or 2 big projects, so I could name it. But the list for 10 lakh is quite elaborate.
Okay. So this is a mix of oil and gas and water?
Yes, about 60% is water and 40% oil and gas.
And the stainless steel side, how are you seeing the momentum in terms of export side? Are you seeing more lift coming up or more -- like say, we are bidding for more bids in the overseas market now as a segment?
Yes. Exports is picking up.
Okay. So assets should see a high growth next year, right? Because the new plant utilization will increase.
Utilization of extrusion press will add to the growth of stainless steel products.
Thank you. I will join back the queue.
[Operator Instructions]. The next question is from the line of Hiren Kumar Desai, an investor.
Yes. Sir, congratulations on the good results. I would like to know the total capacity currently that exists for stainless steel and carbon steel pipes and current capacity utilization?
Roughly for stainless steel, it is 40,000 metric tons. 48,000 sorry -- 48,000 for stainless steel and 5 lakh tons for carbon steel.
48,000 for stainless steel and...
5 lakhs for carbon steel.
Yes. And the current capacity utilization as of FY '22.
Capacity utilization for various segments, it is between 60% to 80%.
In both segments?
Yes, in both these segments..
Okay. And any plans for -- okay, other than what you mentioned. Okay, for the -- as of now, the CapEx plan is INR 350 crores, as you mentioned, right?
Yes, INR 350 crores to INR 400 crores.
Okay. And while answering the previous participant, you were -- you are guiding for 15% to 20% revenue growth. So you are kind of assuming higher volume growth, right, because of softer steel prices?
Yes, yes. One is, of course, the higher volume growth in terms of tonnage also and rupee also.
Yes, yes, yes, I get that.
The next question is from the line of Vikash Singh from Phillip Capital.
Yes. Congratulations on very strong set of numbers. Sir, I just wanted to understand the rationale of new assets capacity expansion because we have already put up 20,000 kt, which we have not started rolling out any material from it. So not even half of the utilization and we started something new.
As far as I understand that even in our previous communication, we said that it would take a couple of -- 2 to 3 years for this new capacity to fully utilize. And this time line for your next capacity is 18 months. So just wanted to understand why there is overlapping or what is the thought process behind it?
No. So this capacity expansion, as I had clarified earlier is for cold finish. 20,000 tonnes, which we have expanded is hot finish. And in the last call, I had mentioned, yes, 2 to 3 years, it will take for it to reach at optimum levels, the hot finish. But by that time, because for any capacity expansion, it will take 2 to 3 years. So by that time, we should be ready with another cold finishing line. .
Okay. And many of our competitors are also putting a lot of capacity in this space. So I just wanted to understand how do you see the overall industry size moving up so that everybody would be accommodated? Or are we going to see some price for going forward? .
Definitely, everyone is increasing capacity. But at the same time, the market is big enough, and we have export market also.
[indiscernible] time.
Yes. So for any new players, the time required will be much more than the existing and established players.
Understood, sir. But can you just give us some market size of as if you have what kind of current market size is there and what kind of the industry growth we are expecting going forward?
The global stainless steel [indiscernible] is close to 5 lakh tonnes . And it is growing at between 5 to 8 CAGR. Plus -- more of the manufacturing is based out of China and India.
Understood. So this new capacity could be more from the export perspective in mind. Is that a correct understanding?
Both export and domestic, both.
Understood, sir. Sir, what was the tail-end CapEx, which is pending from the past capacity expansion, if you could tell us and effective FY '23 CapEx plans? .
No. So from the past, we had 2 major capacity expansion, both have come into commercial production. So there is no -- some balancing equipment here and there during the year. That is a general CapEx, but nothing is pending from the past.
So not much is spending. And this new CapEx would be more of FY '24 than FY '23. Is that...
On the product front, it is done, but we have one solar plant, which is yet to be operational, 15 megawatts. So that CapEx is still ongoing.
Okay. Just one last question on our working capital, which has increased substantially, given that we have a very high volume growth target. So is it okay to understand that even though the pricing are coming down, our overall absolute working capital would remain high for this year? Or do you think that the second half we will get a lot of working capital release?
See, ours is a working capital intensive business. Because one thing is we work on right now is the made-to-order scenario, where we book our raw material on back-to-back basis.
Second thing is because company has been -- not leveraged, is debt-free. So we are not going even for LC bill discounting to remove the LC creditor [indiscernible] from the books because there is a negative carry if we go for discounting.
So that results into a higher working capital involvement in the business. It will continue going forward also. Because one thing is the part of -- this is -- major part of top line growth will be coming from existing business model that is made-to-order scenario. Some addition of stock and sale products will also be there, particularly from new hot extrusion facility, which will again require initial investment in working capital to build up the required inventory range of all the products. So this year, we may see some increase in working capital. Gradually, it will settle somewhere in next 2 to 3 years' time.
Understood, sir. Sir, what is our net cash position as of..
As on date, if we talk about today's date, then net cash will be more than INR 100 cr with the company. As on 31st March, it was [indiscernible] .
The next question is from the line of Abhishek Poddar from HDFC Mutual Fund.
Sir, this margin range you gave was 15% to 18%, and you also mentioned that steel prices, raw material prices would be volatile. So trying to understand that how should we think about margins. If, let's say, the steel prices are lower, then should we assume that the margins would be higher and vice versa? Or should we think about it more like an EBITDA pattern?
See, basically, it is more like EBITDA per tonne. But because ours is a made-to-order scenario, it is very difficult to give [indiscernible] figure for EBITDA per tonne. That's the reason we talk about EBITDA in percentage terms only. Because we are not right now in any made-to-order scenario. So in case -- theoretically speaking, in case raw material prices come down, our EBITDA percentage terms should be going up, but it never happens. Prices are lower when demand is lower. So somewhere you need to adjust your margins also. So it continues.
In case of higher-price scenario, usually theoretically speaking, [indiscernible] should be there, that also never happens because the demand is also good.
So somewhere is better. And this 15% to 18% range is looking to the product mix. Sometimes higher value-added products percentage contribution to the top line may be higher. So then we may see 17%, 18% sort of EBITDA. And if the percentage of lower value-added products is higher in top line, then we may move towards 16%, 15% sort of range.
Understood, sir. That's very clear. So given the stainless steel volumes will keep on going up for next 2 to 3 years, should we assume that EBITDA, let's say, not this year but maybe next or next to next year could be towards higher end of the range of 18%.
It should be. Our efforts will be in that direction only. A lot will depend on the market and everything, but we'll try to see the percentage of higher value-added keep on increasing in the overall product basket.
Understood. Sir, just last question, this 20,000 tonne capacity -- seamless capacity, how do you see the capacity utilization this year and next year?
This year, we are targeting close to 30% utilization.
Okay. And it will be a gradual improvement in next year or it could be a big jump, sir?
No, it would be a gradual utilization increase.
The next question is from the line of Aman Thadani from Solidarity Investment Managers.
Sir, what is the peak revenue that we can get from the current capacities?
Close to INR 5,000 crores.
Okay. And what would it be from the new capacity that you currently announced?
That numbers are still -- we are working, but it's -- 2x the asset turnover ratio.
You can consider roughly INR 600 crores, INR 500 crores of maximum any potential from the new investment.
The next question is from the line of Anirudh Shetty from Solidarity Investment Managers.
I had 3 questions. So my first question is on -- you had mentioned how the SS seamless market is largely dominated by India and China. I just wanted to confirm that once again because there are a couple of peers who seem to be European-based and Japanese-based.
There are players from Europe, Japan, Korea, even U.S., but majority of the capacity is in this area. These 2 countries.
Got it. And I would -- would you also be able to share some numbers on the SS welded market?
Welded.
It's in millions.
Yes. Welded is a huge market, close to 1 million tonnes. The architectural and infrastructure, it is maybe 2 million or 3 million tonnes.
Got it, got it. And sir, my next question is on one of your peers on the SS is recently looking to list and they seem to be doing SS pipes for chemistry, chemicals and engineering kind of pipes. So is this an area of interest for us.
Can you repeat the question, please? .
Sorry, there is a competitor on the SS space who is looking to list and they are more into the SS pipes for chemicals, for engineering, more of the small diameter pipes. So just wanted to check whether this is an area of interest for us.
We are already supplying to that industry. .
And how much would that be? The chemicals, how much would that be for us?
The total spectrum, the revenue might be 5% to 8% only for the chemical and pharmaceutical industry.
Got it. And sir, my final question is oil and gas, the domestic refinery space, how much of our order book would be coming from that? And if I look at these from a 3- to 5-year time horizon, this is something that you guys are optimistic about from growth point of view?
This is for carbon steel price, correct?
Yes.
Yes. So majority of our line pipe order is from the oil and gas space. So within oil and gas, city gas distribution, product pipeline, gas distribution lines all put together, the next 3, 4 years, with the dream of the prime minister to connect the whole country with the gas network and pipe supply.
So growth for 3 to 5 years, definitely, that vision is already there.
Got it. And this whole [indiscernible] we see that in oil as well gas, like I meant from a refinery point of view, like we are seeing growth over the next 3, 4 years, it should be across both oil and gas categories, right?
Yes. Both oil and gas like HRRL refinery expansion -- and the new refinery is going on. So the crude pipeline for that, then once the crude pipelines are there and then the refinery starts, then there will be product lines.
Yes, a lot of petrochemical plants are expected. So there, both the mix of stainless steel and carbon steel, both will come.
We move on to the next question. That is from the line of Kunal Shah from [Karvy India Capital].
Congratulations on good set of numbers as well. I had a question on margin. Vimal ji did allude to previous participant question as well. So 2 broad questions. One is basically, how is the sense you guided for a revenue growth of around 20%, but then that will depend largely on how the metal pricing are going, right? So if you could help us understand what kind of volume growth we are seeing on the ground because prices went up have cooled up in the last 3 days. So are you seeing holding back of CapEx, right? And if you can help understand how does our pricing mechanism works because obviously, our margins have come off in the current year.
So volume growth, how should one look at for FY '23? And at the same time, how should one look at profitability growth and margins for the coming year?
So, keeping the prices stable in terms of revenue in rupees I'm saying, there will be a growth of 20% to 25%. Now if the prices go down, the number can come down or may come down, but the volume in terms of metric tons, that growth of 20% will remain.
Okay. Okay. And how should that translate into profitability growth? Because even in the current year, our revenue growth has been fantastic. But our PAT growth because of the margin compression has been less than the revenue growth, which is quite obvious as well. As you said, that EBITDA per tonnes movement is something which we should look at, but considering we are into different segments, it becomes difficult to compare on a year-on-year basis and quarter-on-quarter basis. So how should one look at profitability for FY '23?
See, Kunal, the broader range of 15%, 16% to 18% seems to be maintainable over a longer period also. In current year also, if we talk about some compression in margin. That is mainly because of the higher contribution to the top line coming from the line pipes, which is a low-margin business. Because in stainless steel and processed pipes, one cannot expect to have a very significant jump because they are dependent on very niche application requirements only. Whereas in the case of line pipes, volume requirements are there. So major growth drivers in top line has been line pipes, which will continue.
Going forward, contribution from new hot extrusion facility and the newer CapEx, which we are planning, which may result to higher value-added products that will also be there.
Plus, we have to understand one thing, see in case of stainless steel, there may not be any volume -- significant volume growth but value addition can be very high depending on the product mix. Because we try to have -- we should be having rather a better margin product than a product which gives only top line with a lower margin, right? It is possible in stainless steel to continuously focus on higher value-added products. And that is the reason in spite of increased competition, we have been in a position to safeguard our margins to a great extent.
Correct, correct. So basically, sir, it will be right to understand that the gross margin compression that we have seen from FY '21 to FY '22, right, is largely on account of basically product mix and not a case where we have not been able to pass on price increase or something of that sort. Would that understanding be right?
You can say majorly, you are right because we -- in our case, all the orders are on fixed price basis, we cover our raw material on bank-to-bank basis and that is the reason you must have observed our investment in inventories have moved up significantly compared to last year. Because a lot of inventory was purchased, because all orders are on fixed prices. But in some cases, because of the sudden price increase, there might be some cases where we were not in a position to book the [indiscernible] immediately. So some minor impacts will be there, might be.
But even out over longer period because there will be cases where we get the benefit also. So -- and that is the reason you can think largely more than 95% of the reason can be attributed to product mix.
Got it, sir. Just one question, sir, on the CapEx plan. So we were deliberating on putting up a plant probably outside India, right? And now with this CapEx announcement, I believe one thing is obviously -- improves our visibility beyond FY '24. But is there anything more in the offing as well? Because in the next year, our cash flow generation, again, would be very robust, at least for the next 2 years. So are we contemplating anything outside India as well or probably nothing as of now, this INR 350-odd crores CapEx, which we've announced in the 2 segments in India. Is fair to assume is what is there on the plate as of now?
Right now, what you are helping finalize that we have shared with you. Of course, team is working on other growth opportunities also. Because to continue to see growth, after 2, 3 years, we need to have significant volume growth potential. So that can come from a number of investments in different, different products and different different opportunities. So at appropriate time, once these are finalized, we will be sharing that information with you. But more CapEx can be expected as we move forward.
Right now, the team is working on evaluating various, various opportunities. These 2 are the ones which have been finalized.
The next question is from the line of Manoj Bahety from Carnelian Capital.
Sir, a couple of questions. First one is -- as you mentioned that our stainless steel capacity is 50,000 and Global is around 5 lakh. And if it we see our aspiration towards moving towards value-added segment for which we already have capacity, I just wanted to understand that -- what will be our right to win in this value-added segment when we are competing with existing stainless steel player across the world. And how we are going to gain market share in this segment going forward, which will lead to structural improvement in our EBITDA margin once we move towards the value-added segment, a higher proportion of our volumes.
I'd like to correct you at one place. Our capacities of stainless steel, 48,000 tonnes is bifurcated between seamless and welded. Seamless is close to 28,000 tonnes and welded is close to 20,000 tonnes. And this 500,000 tonnes of capacity, which Manoj has discussed, that was about seamless only. So we will be having closer to 5% of the global capacity in seamless is our new hot extrusion facility, okay, one thing.
Second thing is right now also in stainless steel, almost 30% to 50% of turnover is coming from physical exports. Plus another roughly 15%, 20% comes from indirect exports because the tubes, which we supply to equipment manufacturers, then ultimately, those equipment were also exported. And we have been competing with global players like [indiscernible] and then all others since last several years, and we have been successful in bagging orders from those countries where local industries are well established like South Korea or Japan, even Japan also.
So we are confident with our focus on quality equivalent to what global players are manufacturing, and the prices which we can offer being very efficient converters, you can say our CapEx cost also continues to remain very, very efficient -- pattern of CapEx cost will be very, very efficient. If you look at the global CapEx costs for the similar products.
So we should be in a position to establish ourselves for newer products also and focus has been to continuously explore manufacturing import substitute products within the country and those products which we can manufacture and supply in competition with the other global players in the global market.
See, we have been in a position to get approval of Saudi Aramco for our existing product lines. So that itself is an achievement, which establishes about the quality standards, which company is in a position to maintain. Ours is the only company which is approved by Nuclear Power Corporation of India in the country. We have been supplying for defense applications also.
So, we are very confident with this already established credentials and established track record, we should be in a position to find approvals for majority of the newer developments in the product applications also.
Sir, it is just if it is just a 5% of global capacity and if we have like -- definitely, we have an advantage on account of the CapEx side, capital efficiency as well as in terms of the cost advantage as well as the product is at par. So, this 5% kind of capacity, are you hopeful that you will be able to absorb this value-added segment in the next 1.5, 2 years? Because I think a significant portion of the time takes -- in terms of like getting the approval thing behind.
So in the next 1.5, 2 years, we can expect that the value-added segment, the capacity which we have put, you will be completely using that towards that, and we will see a structural margin improvement on that?
See, in case of hot extrusion, getting accrual is not a challenge. Getting means production parameters is a challenge because each size and each grade will have a different production parameter, because that product needs to be heated to almost 150, 200 degrees Celsius.
And then hot extruded given the time frame to get the desired output quality, so that setting up the production parameters, it takes time because all the varieties, all the sizes and other plates cannot be hot excluded in a very short period. And that is the reason, usually hot extrusion takes longer time to achieve the optimum capacity utilization.
So in next 2 to 3 years' time, we should be in a position to have entire range available with us to the hot extrusion facility. And the majority of the approvals already are in place and are in the process. We are in the process of getting accrual from the newer customers also.
Got it. And sir, lastly, if you can give us some color on like current macro headwinds. Like where the multiple headwinds, and how do you see the scenario panning for you in terms of like extreme fluctuation in commodity prices as well as interest costs going up. Will it lead to some kind of deferment of CapEx or a slowdown of order book for us going forward also? So I just wanted to understand like what kind of discussions or order pipeline, which you are having with your customers?
Yes, with this high also, if you see our order book is currently at the highest at INR 2,300 crores. And things have started to come down. So we don't see a difficulty in booking the orders or there is the demand side at least for another 2 years.
Beyond that, yes.
Basically, in case of stainless steel the biggest product is call does not form either part of the overall project cost. And it is a must, it is a must requirement for any continuous process industry. The demand will continue. Capacities are also not very large. In case of line pipe, of course, challenges -- some challenges may start coming up once the required infra in oil and gas is over. But by that time, the [indiscernible] product should be starting.
So, maintaining top line should not be an issue. And if major CapEx are turned off by the government, then margin shrinkage should also not be too high even if it is water application products. Because ultimately, everything is demand-driven.
The next question is from the line of Madhav Dhanuka from [Fintech Capital].
First of all, congratulations for good growth set of numbers Sir mostly my all questions are answered. I have one question. Can you tell me in more details of current price trend as the metal and outlook on it?
Metal prices before the war [indiscernible] correction had come. But once the war started it had abruptly gone up because lot of buying from Europe.
But now with the quota getting exhausted, it is again started -- it has again started to go down. So it will remain volatile because of the current situation. But in the long run, I see prices going down.
And sir, what is your outlook on quarter 1 financial year '23 and the metal prices?
Sorry, can you repeat that.
Sir, on the growth outlook of the metal prices on the quarter 1 financial year '23.
It's very difficult to predict steel prices. But it will settle down somewhere lower than the [indiscernible] price.
The next question is from the line of Akshay Kothari from Envision Capital Services.
Recently, there was a removal of antidumping duty from the Chinese. So how are we impacted?
On what products?
So, I think there was some notification [indiscernible] in February month, there was a removal of antidumping duty on certain steel and stainless steel products. So are we impacted by it or no?
No, not related to us.
Okay, not related to us. And of the total 5 lakh tonnes capacity of stainless steel, how much would be the capacity from China?
The total market, you mean to say?
Yes, total market, sorry.
This is excluding China. This is outside of China. For China though, nobody knows.
Figures of China is difficult to know.
Okay. Okay, understood. . And in the export market, which would be the geographies which we are seeing traction. So you did talk about Saudi Aramco. So where are the...
Middle East and Europe, Southeast, Korea and Japan.
Okay. And there was also a notification that CGD companies are seeking for extension with the government for around 2 years. So would we be impacted by these, what we can say, they are not able to set up these pipelines. So how are we impacted regarding that?
No. So they are trying to defer their time lines because of the increased steel prices, but the number of geographical areas awarded are too much. So as it is -- if it is distributed for another 2 years, it becomes better for us.
The next question is from the line of [Diksha Upadhyay from Fort Capital].
I just want to do revenue breakup for carbon and stainless steel in the industry.
The breakup, we've decided not to share -- yes..
And how about volumes? .
Volumes, meaning -- volume, I see the total mix is already given, the total revenue.
Okay. So in terms of volume mix, I want to get breakup for carbon and stainless steel.
No, no. That cannot be shared.
Sorry, sorry. We regret because from this quarter onwards, we have decided not to share this input because one thing is number of people have either ventured into stainless steel or they're trying to venture into stainless steel, which may hurt us in the longer run because they are used to work at a very lower margin business. And on pricing, anybody can compete. So in the short term, it may be detrimental to the interest of the company. That is the reason we have shared the total numbers, total volume and total turnover, including both the segment.
So I hope you might have got it. And if not, so please share your e-mail ID. My e-mail ID is vimal.katta@ratnamani.com. I'll revert back to you with these quantities.
So can you repeat your e-mail ID.
It is Vimal. V-I-M-A-L dot Katta, K-A-T-T-A.
Vimal, yes? Pardon.
vimal.katta@ratnamani.com.
The next question is from the line of Anurag Patil from Roha Asset Managers.
Just a small query. Can you at least share the total volume number for FY '22?
Yes. Total we did close to 254,000 metric tons against 231,000 metric tons in last year.
Okay, sir. And how much was the contribution from exports? .
The exports will be closer to INR 500 crores plus.
Okay. And sir, are you facing any logistic challenges there?
Yes. Because of the global supply chain, which is affected, the time taken earlier and now and with the congestion also, it has increased.
The next question is from the line of Abhijeet Bora from Sharekhan.
Sir, most of the questions have been answered. Just one clarification, as you have discontinued giving the breakup of volume and revenue. Should we directly take EBITDA per tonne like you had given total volume, we have the EBITDA would just have an understanding that why the margins are moving up and down rather than taking a percentage.
No. See, margin, depending on the product mix will change quarter-on-quarter. So it is very difficult. And quantitative information segment-wise is hurting us somewhere. So we have decided not to share with us on the call.
Sir, I understood that. And I just wanted understanding that if I do a back calculation on the Q4 volume number, I get...
It will give a wrong picture because dividing total volume by total tonnage will give a wrong picture because it depends on the product mix, right? How much -- what is the contribution of assets, what is the contribution of carbon steel within carbon steel, there are so many products; within stainless steel, there are a number of products. So the mix keeps on changing. We try to remain in the 16 to 18.
Okay. Would it be fair to say that this quarter, the sequential move in the margins were due to like pickup in assets order booking, right? Will that be the right assumption?
Yes, that assumption would be correct.
And also, there is a benefit of operating leverage also, volumes also or not?
A little bit, but major would be on dependent on the product mix.
Okay. Okay. And sir, last quarter of Q4 FY '21, if I see the margins were quite high. So like was there any one-off last quarter? Again, FY '21 -- I'm talking about Q4 FY '21.
Again, the revenue distribution in the total revenue among the products would have been more value-added product during that quarter.
And within the products also [indiscernible] sometimes order better margin compared to the normal one. See, in our case, it is very difficult to normalize. So that is the reason we have to talk about year-on-year comparison instead of quarter-on-quarter. Because quarter-on-quarter will never give you any figure, which can be extrapolated.
Even within carbon steel also, for example, water and oil and gas. Now if I -- maybe the metrics tonnes I do more for water. But oil and gas, the margin will be more.
So 1 quarter, maybe I'm doing only water. Another quarter is more oil and gas. So then comparing quarter-on-quarter, will make things more difficult.
So that is the reason that I was asking Q4, you mentioned that we had higher share of lane added product mix, we had a margin of almost 23%. But normally, you were between 16% to 18%. So was there -- because like you had a strong revenue growth of 40%, but there is a margin contraction, though in line with your guidance, but I just wanted to understand on that front.
The product, the distribution between divisions would be higher from stainless steel and within that high value-added would be more.
It is a little complex because again, ours is made-to-order scenario. And within that also all the products will not be giving the same margin. The margin range may keep on fluctuating based on applications, materials to be used. The best thing to be carried out, number of pieces required in the order, length of the tubes -- number of factors are there.
[Operator Instructions]
The next question is from the line of Hiren Kumar Desai, an Investor.
Yes. A couple of quarters ago...
[Technical Difficulty]
Mr. Hiren Kumar Desai, may we request you to repeat your questions for the benefit of the management team.
Sir, 2 or 3 quarters back in the call, you had mentioned that competitive intensity from the Chinese manufacturer was likely to be lower because of removal of export incentives, et cetera. So just can you give a sense of how is the competitive intensity in the export market?
See competitive intensity for the export market, the Chinese process is more or less [indiscernible] product. Whereas what we manufacture stainless steel is through the extruded product. So wherever the acceptance of extruded pipes is there, there we do not face any major competition from China where peers product is required, of course, China for the export market that competitiveness is required. But various countries have antidumping on China. So again, entire Europe, there is antidumping, U.S., there is anti-dumping on China.
Okay. So do we have an opportunity to significantly increase our..
Yes, yes. With the stainless steel seamless pipes extrusion, we have that opportunity to have more market share.
[Operator Instructions]
The next question is from the line of Sahil Sanghvi.
I had 2 questions. Regarding the import of exchanges steel pipe in India, there is a lot of Chinese imports happening still. So how is that -- what kind of market share are they having?
Yes. So the domestic industry is working on various fronts. One of them is the quality control order, which Bureau of Indian Standards. So any pipe coming in the country has to follow the Bureau of Indian standards. Every country you go to Europe, you go to U.S., they have their own standards and mechanism to protect their local industry. So within India, we are trying that. That is one thing. Right now, none of the Chinese mills, they have BS. So they have to apply for follow certain guidelines, procedures and maintain that.
So second is we are also working on antidumping on China. So these 2 mechanisms are there to get the protection from the Chinese subsidized product.
Right. And one of my question was that how much market share is the Chinese imports having right now in our domestic market?
About 30,000 to 40,000 tonnes in a year.
It is 30,000 to 40,000 tonnes of stainless steel seamless pipes in a year.
Okay. Okay. And what would be the total -- the market size in India for seamless steel?
1 lakh tonne.
1 lakh tonne. Okay. Okay. Got it. My second question was regarding the solar power plant. So this is what location and any kind of savings that we can expect?
It is for captive only. It is a 15 megawatt. It is so captive consumption only, it is in North Gujarat near Patan.
Okay. Okay, okay. So this will give us some savings in terms of the cost of the power?
Yes.
Yes, [indiscernible].
Okay. And when do you expect this to be commissioned?
By this June end.
Okay. Okay. And lastly, how much CapEx are you expecting in FY '23 and for exactly what projects? These projects only will start CapEx in FY '23?
Yes. From the second half of FY '23.
Okay. So total spend that we target in FY '23 will be how much?
INR 100 crores -- INR 250 crores.
[Operator Instructions]
As there are no further questions, I now hand the conference over to Mr. Sahil Sanghvi for his closing comments.
Yes, thank you. So just wanted to thank the entire management of Ratnamani Metals for basically answering all the questions. And on behalf of Monarch Networth, I would also like to thank the participants. Manoj, would you like to give any closing comments?
No, that's it. Thank you. We'll keep you updated.
Okay, thank you. Thank you.
Thank you, thank you.
Thank you. Ladies and gentlemen, on behalf of Monarch Networth Capital, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.