Thank you, [Sharvani?] .

Good afternoon, everyone, and welcome to Godawari Power & Ispat Limited's earnings call to discuss Q2 and H1 FY26 financial performance. We have on the call Mr.

Abhishek Agrawal, Executive Director; Mr. Dinesh Gandhi, Executive Director; and Mr.

Sanjay Bothra, Chief Financial Officer. We must remind you that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that the company faces.

May I now request Mr. Dinesh Gandhi to take us through the company's business outlook and financial highlights, subsequent to which we will open the floor for Q&A.

Thank you, and over to you, sir.

Hello?

Yeah. Hello.

Thank you. Good afternoon, everyone.

Thank you for joining us on this call today. Our financial results, press release, and earning presentation are available on our website and on the stock exchanges.

I believe you have had a chance to review the same. At the outset, we are deeply mourned and grieved by the unfortunate and unforeseen incident which took place on 26th of September 2025, 26th of September 2025, in one of our pellet plant in which six of our colleagues lost their lives and six others were injured.

Our heartfelt condolences to the family of deceased colleagues. May the departed soul rest in peace.

The company has provided financial assistance to the families of the deceased. While no amount can ever compensate for the loss of life, our support goes far beyond the financial aid.

We remain committed to ensuring long-term security of the families of the deceased employees through employment opportunities for the eligible dependents, pension benefits for no employable member in the family, and uninterrupted education for children through reimbursement of school and education expenses. Safeguarding their future is our highest responsibility, and we stand firmly committed by the same.

Now coming on the GPIL performance, I'm pleased to state that H1 FY26 has been a period of consistent performance, strong operational progress. Revenue remained stable, supported by higher pellet and galvanized product volumes, while EBITDA and PAT margins stood healthy at 22% and 14% respectively despite soft realization across the product range.

On operational performance front, GPIL is well on track to meet its FY26 production target despite loss of production of pellet for about 40 days due to the incident took place on 26th of September. While the plant was closed, we took the opportunity to prepone maintenance shutdown which was in any case due in Q3 FY26.

In H1 FY26, production volume of iron ore mining, pellet, value-added steel products grew by 16%, 18%, and 16% respectively despite loss of production of 5 days in September. Pellet sales rose 30%, while value-added steel products saw a decline.

Realization softness across the product except ferroalloys and galvanized fabricated products. In Q2 FY26, production increased further by 23%, 29% for the mining, 31% for the pellet, and 5% for value-added product.

Pellet sales surged by 71%, whereas value-added steel products saw a decline. The trend in realization remained similar, with only ferroalloys and galvanized product maintaining YoY stability.

Coming on the consolidated financial performance, in H1, sales turnover remained largely stable, supported by higher production and sale of pellet, galvanized products. However, EBITDA and PAT were lower due to softer realization.

Even so, EBITDA and PAT margins remained robust at 22% and 14% respectively. In Q2 FY26, revenue, EBITDA, and PAT saw a YoY decline, driven by higher sales volume of pellet and rolled products on a QoQ basis.

However, these metrics were lower owing to reduced realization and seasonal weakness for iron ore pellet and finished steel. EBITDA and PAT margin continued to hold firm at 20% and 12% respectively.

Overall financial performance of the company remained healthy and stable. Let me now update you on other strategic growth plans of the company.

I'm pleased to inform you that we have been able to move forward on getting much-awaited regulatory approvals for expanding capacity of Ari Dongri iron ore mines from 2.35 million ton to 6 million ton per annum, and we have successfully completed public hearing for environmental approval. The environmental approval is in final stage now and expected by end of December 2025.

The 2 million ton pellet capacity expansion is progressing as planned. The pre-commissioning trials are underway and commissioning targeted by end of November 2025, which is awaiting consent to operate from State Pollution Control Board.

The entire work for the commissioning of project has been completed. The land acquisition for expansion of iron and steel capacity has been completed with 452 acres of land secured for integrated steel plant and CRM complex.

The 0.7 million ton cold rolling mill complex project is progressing well with land acquisition completed and major equipment orders placed. The total cost of project for CRM project is ₹900 crore, of which ₹600 crore is financed through the debt and balance reminder funded via internal accruals.

The company proposes to take up 1 million ton integrated steel plant post iron ore mining capacity enhancement. The proposal for the same will be put up to the board after the production on expanded mining capacity is started.

Godawari New Energy Private Limited, a wholly owned subsidiary of GPIL, has planned to set up 10 GW battery energy storage system project in Maharashtra, for which land acquisition of 112 acre has already been completed. The cost of project is ₹700 crores, which is proposed to be funded via debt of 60% and balance from internal accrual out of equity contribution from GPIL.

GPIL has already infused equity contribution to the extent of ₹175 crores, of which has been utilized for land acquisition and other project-related expenses. The board in its last board meeting has approved setting up of an additional 250 MW solar power capacity in addition to earlier announced capacity of 125 MW for captive use in CRM project and integrated steel plant.

The project is expected to be commissioned by Q4 FY27, coinciding with commissioning of CRM project. The surplus power, pending use in Boria Tibbu and integrated steel plant, the company proposes to use power from 250 MW solar for existing iron and steel operations by temporarily suspending thermal power generation.

Operations at Boria Tibbu mine resumed in May 2025 following approval of updated mining plan. Additionally, GPIL received PGCIL approval for supply of steel billet for transmission-grade galvanized steel structures, a recognition of high quality of GPIL billets, now comparable to those of India's leading steel producers.

Notably, GPIL remains the only company in India to provide fully integrated, end-to-end solution for galvanized steel structure from iron ore to finished product. Coming on the market outlook, global iron ore prices have largely moved within $95 to $110 band this year and currently at around $102, $103 a ton.

Weather-related supply disruptions supported the prices in first half, while higher supply in the second half may cap further upside. Geopolitical tension continued to infuse global demand.

Through China's recent stimulus measures, including direct cash transfer to boost consumption, should offer some support. For FY20-- for calendar '25, iron ore prices in China are expected to remain in the range of $90 to $105.

The World Steel Association, however, project China steel demand to decline by 2% in calendar '25 and 1% in '26 as the housing market stabilizes. On domestic front, iron ore prices NMDC 64 Fe fines have remained range-bound between ₹4,500 to ₹5,500 tons.

Pellet prices have also been stable around ₹8,500 to ₹10,000 band, currently at around ₹9,750 a ton, and likely to follow a similar trend in H2. India's steel demand remained strong, with World Steel Association forecasting 9% growth both in FY25 and '26, driven by sustained expansion across infrastructure, construction, supported by initiatives such as National Infrastructure Pipeline, Pradhan Mantri Awas Yojana.

By '26, India steel demand is expected to be nearly 75 million ton higher than as compared to 2020. Taken together, our operational consistency, disciplined project execution, forward-looking investment highlight GPIL's readiness for next phase of growth.

Backed by over four decades of industry experience, strong leadership, and committed workforce, the company stands on the foundation of strength and resilience going forward. As we scale our mining and pellet capacities, strengthen downstream capabilities, and deepen our renewable energy integration, we continue to build on strong competitive position.

Our solid net cash position, strategic capex pipeline, and strong ESG focus further support our long-term value creation efforts. With efficiency gain and cost savings from solar project, benefits of captive iron ore resources, GPIL is well-positioned to capture emerging opportunities and deliver sustainable value to all stakeholders.

I would now like to open the floor for question and answer. Thank you.

Good afternoon, sir. Thank you for the opportunity.

Sir, first question regarding the pricing scenario. If you could give us some idea what with the spot prices versus the 1Q averages, and we have heard some price increase happening recently.

Could you just confirm the same? Lastly, anything you've heard on the safeguard duty which provisional has been lapsed?

Hi, good afternoon. The prices, you're talking about our sales prices, right?

Pellets, sponge iron, billets, and so on?

Yes.

Okay. Pellet, H1 has been close to ₹9,500 average.

Looking at the current demand and supply, we feel H2 also will be on the similar levels because pellet demand in domestic market is still quite strong. Of course, there will be plus-minus 5%, 10% on account of demand, but more or less it's stable.

DRI is about 22, 23 on the lower side. Billets were about 34 on the lowest.

Right now, it's about ₹35,000. Finished is around ₹38,000, ₹39,000.

Prices in last, I would say, six weeks or so have been close to rock bottom for this financial year at least. Demand looks to be picking up as monsoon got over, and now all festivals are over.

Hopefully, in H2, we can see a better realization compared to H1.

Okay. Was there any ₹1,000, ₹1,500 kind of the price hike in the last one week in the longs product?

See,

as I said, right, slowly the demand is picking up, what happens now, the people try to increase the prices in a haste, but if the demand is there, it sustains. If it doesn't sustain, then it rolls back.

That has been the trend from last couple of weeks where the prices start going up and then it comes down little bit again. I'm very sure things should improve from here on.

Okay. Any words on the safeguard duty which you have heard because the provisional has been lapsed, and we are not sure by when the final notification would come?

No, yeah, no, not. Since I'm not really into the product of HRC, right, I don't follow it very closely.

I think at the moment, everyone's hoping it should come soon to support the industry.

Understood. Sir, my second question is your strategy towards using solar power to use in the future project as well.

That 250 MW solar power which you intend to use in the CRM, how should we look at what kind of the cost saving it will give, and does it really make sense because that money could go for the new product or increase your overall volumes? Just wanted to understand what kind of the internal IRR on that project you're expecting at this point of time, especially when there is no premium on the green steel?

I'll tell you. See, if you don't install any power and we import power from the grid, right, my grid tariff will be close to about ₹8, ₹7.75 to ₹8 annually on per ton on per-unit basis.

When I calculate that because the CRM, it's a volume business, there's a lot of competition, but it's high value addition, but the margins are thin. You operate between 8% to 10%.

Every penny matters, right? If I import ₹8 grid power and give it to my CRM complex, my operating cost will be on the higher side.

Rather when I have a land available for me which I can use, and I've been doing solar power since so many years, I think this is the right way to invest in the solar power so that my operating cost goes down from day one.

Plus,

just to tell you, that solar power plant will not only go for my CRM complex, in the longer run, it's also be feeding to my second mine, Boria Tibbu mine, where we will be installing power there as well because the mine tariff is close to ₹12. It's better to put solar power plant there as well.

This new 250 MW will feed to my CRM as well as my mine in the longer run.

Understood, sir. Actually, I was coming from the fact that a thermal power plant of much lower capacity and cost

No, No. No, I'll tell you in that way.

Firstly, today thermal power plant is not cheap. It's ₹7 crore minimum per megawatt, right?

Plus as a company has decided, we will not be going for any fossil fuel thermal plant. We have no intention of going back into that.

We are very much happy in moving forward because sooner or later, I'm very sure with new government norms, new carbon tax mechanism that India's proposed, things will get beneficial for us in the longer run. We will start getting the results of whatever investment we are doing right now.

I'm very sure about it. We have no intention of going back into fossil fuels.

Understood. Sir, until your own HRC capacity comes in, you would be buying HRC from the market.

What kind of margins do you think you would be making in CRM?

No. Just to correct, we are not entering into HRC market.

Our new steel plant, when it goes ahead, it will not be making HRC. We will be a long-term buyer of hot-rolled coil from the market to feed to my CRM complex.

What kind of conversion margin do you see at current spot basis? I know that the future can't be predicted.

At current level, what kind of the conversion margin do you see in the CRM complex?

That's what I'm saying. As per the industry trend, we are 19 between to 10%.

Now, 10% is a very good number. I would say 7% to 8% is an average number.

Even we have considered the same margin when we did our entire business planning. We will be a buyer of HRC from the market on the longer basis, and we will be feeding and converting into value-added products.

That is the whole idea.

Understood, sir. Sir, just one last question.

Once the Ari Dongri mining capacity goes to 6 million ton, do we would have the need to run Boria Tibbu simultaneously or we would save that Boria Tibbu for the future? Just wanted to understand our sourcing.

Yeah. See, Boria Tibbu is a low-grade mine specifically where the grade is, average grade is about 48%, 47.50%, right?

The idea is we want to start investing in Boria Tibbu because increasing a mining capacity will take a lot of time because currently that mine is not planted with lot of infrastructure, so that needs to be developed, and it will take its own sweet time. The idea is, in 3-4 years, we start ramping up Boria Tibbu to a decent level.

As and where we feel the bigger mine is not able to feed or there is a shortage, we can always add the capacity. Today also, if I start working on Boria Tibbu, the next expansion can only happen minimum 3-4 years from now on.

I'm looking at a April '29 minimum from here to increase some more capacity in Boria Tibbu. It's a long-term planning.

Very well noted, sir. I have more questions, but I'll come back to the queue.

Thank you for answering.

Let me add one more point in this solar thing. This 250 MW solar, if you compare with the rate of ₹7, a net cost to the steel plant at about ₹5.50, the internal rate of return is about 24%.

It is an healthy investment. Number two, if you want to do solar under group captive, then the point is that the land on which this project is proposed cannot be done under group captive because it has been allotted to Godawari Power, and it cannot be sub-leased to any other company.

These are the two other factors for considering this 250 MW project on the balance sheet of GPIL.

Thank you, Dinesh ji. Thank you, sir.

Yeah.

Hi, sir. Good morning.

My first question is on the mining capacity. Now with Ari Dongri going to 6 million ton, when do we expect the entire crushing, beneficiation come online, and we should be at that 6 million ton run rate on an annual basis?

See, hopefully we should get the final clearance from the State Pollution Board by end of this quarter. From thereon, January probably we need a couple of months to get things back in order because we have been trying to manage till now because the EC has been delayed for 2 years.

We see a ramping up capacity happening from April, April 20-- April '26. Next year, 6 million looks difficult, to be very honest with you.

Our idea is to reach 4.5 to 5 million tons next year, and then full-throttle 6 million ton from January '27. That is our idea to go ahead.

Broadly, sir, we are considering the

Yeah, sorry.

Go ahead.

With Boria Tibbu mines will mine about 5 lakh tons annually, out of which I'll get about 3 lakh tons of concentrate, so that will give me a decent cushion to operate my plant from my own captive mines, all the pellet plants.

Sir, broadly, we are considering that the beneficiation and crushing facility also should come online by calendar year '26 end, and we should be in place to ramp up the

No. See, we already running a 0.6 million beneficiation plant.

The further expansion is just an extension of it. We are completely ready.

Once we get the permission, we'll take about 4 to 6 months to get the line up and running. We're expecting that by June, July, the full beneficiation will be in place, right?

Since it's going to be monsoon, you can expect from Q3 onwards, an entire beneficiation and mining will be at full capacity. Sir,

at peak, given where our current capacities are on the expanded pellet capacities, what would be our peak iron ore requirement in '27 then?

You mean FY27?

From calendar year '27 onwards.

See, at our current pellet levels, we should be producing, I think, above 4.2 million tons. Assuming a 15% to 20% yield loss on beneficiation, we need about 5.7, 5.8 million tons.

That is our whole idea. We mine about 5 million tons in the first phase, take it to 6 million tons in second phase so that we are always 100% captive.

We will broadly not use any iron ore for manufacturing sponge, we will still use pellets to manufacture sponge, or we might also something there also?

No, we cannot because our mine is magnetite, and magnetite is not suitable to directly feed into sponge iron. The only way you can consume magnetite is through a iron ore pellet route.

Our DRI capacity will always run on a 100% pellet.

Broadly, we should look at it that way that at peak also, we would be mining somewhere between 5.5, 5.7 million tons?

See, 6 million tons, 6 million is what is our idea is. So, 5.5, 5.75 depending on how the monsoons play.

The idea is key whatever requirement we have for our captive pellet plant has to come from our mines. We are very clear about it, and we have no intention of selling any surplus in the market.

Secondly, in terms of the CRM complex, any timelines for both the CRM complex and the BESS plant?

See, as we have informed earlier to everyone, we're looking at a commercial production of April '27, which is FY28, for both, for BESS as well as for the CRM.

In two years, we should reach at full utilization on that?

Sorry, come again? For

the utilization, we should reach near full utilization in two years of operations?

See, because both things, for us it's a first-hand experience, we're assuming a 50%, 50% to 60% PLF on the first year, and then from second year onwards, we will be at 80% plus in both the plants for sure. That is the whole idea.

Sir, and given that now we will start work on even Boria Tibbu mine, broadly 2-3 years down the line, again, we will look at expanding our pellet capacities, or how should one think

No. The idea is we'll raise the capacity so that it can support our additional capacity requirement in this new steel complex.

We might require a 1 million ton because we might put up a sinter plant there. The idea is to beneficiate Boria ore inside the mine, reduce our wastages, and then straight away send it for usage in my new steel complex.

That is Boria Tibbu with my new steel plant.

We will time the Boria Tibbu capex also with the steel plant only, that is how one should think about it?

See, the capex is not very very very big. The idea is because there are a lot of approvals required, a new EC has to be obtained, today anywhere between 18 to 24-month process, and then 12 months we need to get the plant up and running.

That's why we've started working on the Boria Tibbu approvals, preparing a new EC and other documents. Capex will only start happening probably 2 years down the line, nothing before that.

Last question on my side, on the steel plant, any timeline for the capex, or we are still some quarters away? No, see,

as we have said earlier, for us to have comfort, for everyone else to have comfort, we are very clear. Once we receive the final approval of mining EC, then only we'll take it to the board for approval.

Parallelly, we are very close to fine-tuning the capex, last-stage discussions with all those big key suppliers. For that as well, we need about a couple of months.

We're hoping probably next board meeting, we should be able to take up the steel plant for approval. Everything goes well.

Thank you so much, sir. That's it from my side.

Thank you.

Yeah. Hi.

Good afternoon, and thank you so much for the opportunity. Sir, first question is on the iron ore expansion at Ari Dongri.

Since you have already completed with the public hearing and are expecting approvals by December, what sort of volume can we expect? Is there going to be any lag in the production once the ECs are in place?

No, there won't be any lag in the production because from quite before only, we were always factoring the additional volumes to come up in FY27, which is April '26, Q1 quarter. There has been a couple of months delay.

We thought we could get the EC by Diwali. That will not impact on any kind of production lag in this year.

There might be a little bit of overlapping because the monsoon is going to arrive by June, and we would need some time to start earning our capacities.

Got it. On the pellets front, by when do we see the commercial production to start for the new pellet plant, the 2 million ton expansion?

I think in couple of weeks. I think by end of this month, we should be able to announce to the stock exchange.

We're just waiting for the final approval to go ahead. We've started doing the cold trials, which is very much permissible.

I think in couple of weeks, the new pellet plant should be up and about. From Q4 onwards, we're expecting close to 80%, 85% of the capacity for the new pellet plant.

Okay. The ramp-up time wouldn't be that long?

No. Probably, yeah, a month or so.

Probably 4 to 6 weeks.

Got it, sir. That is helpful.

Sir, additionally, with the incident which happened at the pellet plant, what impact on volumes can we expect? Could you quantify it specifically because of the maintenance shutdown?

Sure.

We did lose about 1.5 lakh tons of volume. Some of it was in Q2 and entire October, it will reflect.

The good thing is out of 35-40 days shutdown, 20-25 days was already planned in end of Q3, early Q4 as an annual shutdown. That we did maintain the job this time only.

Plus with my new pellet plant coming in and hoping to ramp up by Q4, the volume we had declared initially about 3 million tons, we are confident which we can achieve that.

Okay. On an average, we can expect 820 tons, 20 kilo tons per quarter, that how the run rate is to be looked at for the next couple of quarters?

Yeah. I think January Q4, we should be doing about 3 about 0.9 million tons itself.

Okay. Not a 10% decline?

Yeah. For whatever production loss will happen, we are very confident we can be able to cover it from our new plant.

Okay. Got it.

Sir, since the mining is going to be a little delayed and the pellet plant would already be up and running, we can expect some merchant purchases of iron ore as well during Q3 and Q4?

Yes, of course. We have been a buyer in the market for about 50,000 tons every month.

With the new pellet capacity, there will be additional buying till mining capacity ramps up. The good thing is, firstly, in today's market also, because there are other merchant pellet supplier in the market who are buying 100% iron ore from the market and feeding to the sponge iron guys, there is still money to make.

That will also help us in a bottom line. We'll get additional EBITDA coming from additional volumes of pellet.

Got it. Sir, you had mentioned in your opening remarks that the H2 prices for pellets are expected to remain in the ₹9,700 per ton range.

How are the premiums on iron ore pellets looking currently? Have they seen some fall over there as well, or is it in the broadly range of ₹1,000?

No.

There are no premiums as such. Specifically this Raipur market, there has been a lot of addition of DRI capacities, and the addition is still going on.

Every month about 20-25 additional 1,000 tons of requirement is coming up. At the moment, Raipur is not able to feed the DRI guys.

There is shortage of pellets in Raipur. Going forward, once the new plant comes into production, that demand-supply gap will be quite balanced, and we can see the prices to be in a similar levels.

We don't see many going up and down too much.

Okay. Got it.

Sir, just one last question. Could you provide me what was the landed cost of imported coal for the quarter?

Q2, it was about ₹11,000 landed to my plant, RB1 coal, 6,000 series coal. Yeah.

Okay. How is it shaping up in Q3, any impact?

Initially, the market was on the lower side, then that had gone down below 80 bucks. There's been a separate little bit of run, but not much.

We can see Q3 should be between ₹10,500 and ₹11,000 because dollar again have gone up from 86 to 88, 89 levels, so that's also need to be considered. Plus-minus ₹500 in that.

It's quite stable only, I would say, the imported coal as well.

Sure. Thank you so much, sir.

All the very best.

Thank you.

Yeah. Good afternoon, and thank you for the opportunity.

My question is more on the best side. I think we've heard announcements from Ola and Adani to enter this particular part of the project.

They will be also doing something similar on this line. How similar is what we are doing and they're doing, and would that be a lot of competition to handle for us?

Firstly, whether it's Adani, Ola, JSW, there will be a stiff competition in this, and we are very well prepared for that because our capacity is designed such that we want to be probably whenever the top five in India in terms of volumes, right? We are very clear about the competition.

Now in terms of Adani's announcement they had made, they had also come back with a new announcement the news is not totally 100% correct. Basically 30 GW, they are doing it for their own Gujarat project where they building up the one of the biggest solar parks of 20,000 MW.

So, 30-35 GW will be go for their captive consumption. That clarification came from Adani in the Economic Times.

What Ola is doing, Ola is not trying to install a BESS for their battery charging solutions whereas the consumers can reduce their power cost, the electricity bills in a net meeting concept. The logic is same.

The applications are different for everybody individual. In our case, what we want to be doing is we are not a developer.

We won't be bidding in tenders of SECI. We're going to be supplying containers and directly competing with other guys in India as well as import from China.

I'm thinking with government policies, the way it has been supported solar industry till now, those policy will also start coming in place as and when the volumes in India start going up of supply. Now there's a big mismatch of demand and supply.

Today India can supply 7% to 10%, 90% is import. When that demand-supply starts coming close, I'm sure government will come up with policies and start supporting domestic industries.

That is the whole idea on the best side.

Got it.

Just for your information, Reliance is coming with 40 GW, but 30 GW again is for their own towers, telecom towers, right? They will be coming with only a 10 GW capacity in the market competing with us.

Eventually, we will be also doing on similar levels. Our capacity is also very big.

It's 10 GW first phase only. That's how we vision it at the moment, then that had new this particular business.

Yeah.

Got it. Secondly, just to understand the kind of iron ore that we will be mining in FY27, you said about 5 5 to 5 5.5 million tons.

Is that correct, for FY27?

Yes. For FY27, since there has been a slight delay, and with the monsoon onset and so this year the monsoon was 5 months, right?

Keeping all that in mind, we should be able to do somewhere about 4.7 to 5 million tons in FY27. Sir, what about

the expanded 6 My new and

the expanded beneficiation plant of 6 million ton from 0.6 to 6 million will be up and about by say June, July, which is end of Q1 or Q2 early Q2.

Right. The balance requirement this year and next year, we will be solely dependent on the market or would there be some supplies from Boria Tibbu also?

Boria Tibbu

supplies are continuing. We intend to do a continue mining of about say 0.5 million from Boria Tibbu where we'll get about 0.3 million tons.

There'll be a additional support of our own magnetite raw material. Rest we will have to go into the market to keep running our plants.

I'm hoping this should continue max till probably say March. Because from April onwards, we will see additional volumes coming out of the mines.

Okay. Roughly the production target for FY27 would be 4 million ton for pellet, or would that be lower?

No, pellet for next year, 4 million will be bare minimum. It might be on the higher side.

We're probably analyzed during planning of the next year, but 4 million will be bare minimum for sure because we expect a 80% capacity utilization from Q4 this year only for the new pellet plant, from January onwards. That happens 80%.

For next year, we'll be bare minimum 4 million tons, without a doubt.

Got it. That is good to hear.

Thank you, and all the best.

Thank you.

Hi, sir. Good afternoon.

Thank you for the opportunity. I had a couple of questions.

There is a sponge iron decline in production, are we utilizing it to make pellets and other stuff more? Have we increased the capacity to utilize sponge iron more?

See, currently, our sponge iron is 0.6 million ton and our steel capacity, we do about a production of 0.5. Now we're installing a new furnace of 30 tons, which will require additional 50,000 tons sponge.

Once that is in operation, I think from next year onwards, our sponge sale will be totally zero. Sir, there is a

Yes, sir. Sorry.

Sorry. Please, please go ahead.

Please go ahead. Sir,

there is a spike in our galvanized fabricated products production and sales. Could you shed some light why is there this spike in that?

We have done really well in that segment. Is there is any market changes that we are expecting, or we are exploring new avenues where we increase the sales of that product?

We are. See, we are.

An additional capacity since we got all the approvals from PGCIL now, we are ramping up the capacity of our rolling mill. We have also started taking strips, which are basically used for the pipe segment, because since our quality of billets is like that, we are hopeful key from Q4 onwards, we can see a substantial jump in the volume of our strips as well as for the galvanized structures.

Sir, there is a decline in our sales of steel billets as well by a 40% H1 over H1. No,

it was because in June, we had taken a plant shutdown of one of our bigger turbine. There were modifications required to meet the new norms which basically State Pollution Board has recommended to all industries to revise their pollution norms which are allowed.

To complete that timeline, we had to take a two-month shutdown of one of our power plants. Due to less power, the production of the billets had been less.

That is the reason.

Sir, could you just shed some light that iron ore capacity in India right now would be a shortfall for steelmakers in India itself by in coming recent years? Do you think that there will be a good price rise in iron ore sales and fines?

See, I think today because of the mismatch, especially in the eastern belt, the region which covers Bengal, Odisha, Jharkhand, and all, there is already a acute shortage of iron ore. That is the reason, in spite of such weak steel prices, the pellet prices are still on the higher side.

If you speak to any DRI guys, they would say pellet prices should be at least ₹1,000 less from here on. Because of shortage of iron ore into India and the production is going up every year by 8% to 9%, so that's why the raw material prices in India are on the higher side and will remain elevated unless the supply starts improving from the iron ore side.

Sir, by 2030, a lot of mines are coming up on sale in those blocks. Hello?

See,

mines keeps coming. Any virgin mine, any new mine which is auctioned, it takes minimum 3 to 4 years for operations and at least probably couple of years to ramp up the capacity.

Whatever happening, I'm sure mines which got auctioned in, say, '21, '22, they might be coming to production this year. That's what I'm saying, the demand is much more than the supply which is going to add up into India.

Government is concerned about it, and they are hopefully working on it.

Do you think the prices of iron ore and pellets and everything this would be the bottom like we are looking at right now, and this would go upwards from here on onwards?

What would be a sustainable On a very long-term basis, I think ₹9,000 for us as a realization ex-plant on a longer-term basis is very, very practical. I don't want to be very optimistic or very pessimist.

I think ₹9,000 if we can get a longer term, I think it's a good pricing for the pellet people for sure.

Sir. Thank you so much.

Thank you.

No, to be honest, not yet because we are still about 12 months away, 12-14 months away when we start supplying. As we come close to the date of commencing the operations, we will think of having discussions with three or four big developers who are going very aggressive in terms of the volumes.

We have that in mind. At the moment, because it's too far away our supplies, it doesn't make sense to talk to somebody right now because competition is big, imports are still happening.

I don't think so even the other player would be quite keen on taking discussion very seriously at the moment. Once we're closer to the commissioning operations, then probably we'll start discussing.

We have that in mind. Okay.

Your cells will be imported from China, but BESS typically the systems are for longer projects whatever I understand, 5 to 10 years. How will the warranty work in that case?

Because you'll be putting in a container or assembling whatever you call like that? See, exactly.

We will be importing cells. Whatever warranty we're getting on cells, we will pass on to our buyers back to back.

That is the whole idea. Apart from cell, everything will be done in India.

If you study the government policies, PCS is already compulsory from India, EMS is already compulsory from India. Government is very proactive in supporting the domestic manufacturing.

Only the cells will be imported, rest everything will be from India only going forward. You mean to say any issues come in wherever you're buying from China, they will be helping out with that warranty?

Typically, what will be the warranty period if at all you're importing from China? For cells, if you know the technicality, it's basically 8,000 cycles for 2-hour charge-discharge, which basically roughly it's about say 8 years, 10 years down the line depending on the cell category.

For cells, because we do realize it's a very critical part of our operations, we are already discussing with top A-class in China and trying to enter into a long-term supply for them. That's how we're going to be procuring cells on a long-term basis with top A-category suppliers only like CATL, EVE, Hithium.

These three, four we have identified, and we are at a very advanced stage of negotiation with them. Sir.

Thanks, and all the best. Thank you.

Hi, sir. One more question on the fund raise, the preference issue that we have done recently.

Any rationale behind that why did we do a preference issue?

Dinesh ji?

Yeah.

Siddharth, there is no major rationale, but if I have done a preferential issue, it shows that 50% or more than 50% of this is taken by the promoters. Who else knows the business better than promoters?

Promoters wanted additional equity in the company, and therefore, we have gone ahead with the preferential issue. This money, in any case, will be partially utilized for our upcoming projects.

This helps funding the project also without raising additional debt. Any this thing that we are getting ready for the steel plant capex, and that is why we have done some of this preferential issue?

No, steel plant capex will be much larger. This ₹500 crore of preferential issue does not fund my entire steel plant project.

Definitely, this will help meeting requirements for BESS and CRM project.

Okay. Sir, incrementally, when we go ahead with the steel plant, we will require incremental fundraising, or we should be able to do it from the internal cash accruals now?

We'll need to raise some debt definitely for the steel plant, and we will definitely raise the debt. We'll see what is the equity availability with us and what is additional required.

Okay. Sir, lastly, coming to our pellet volumes for 2H, given that NMDC has also taken a price cut, we still believe that we should be able to maintain this range of pellet realizations going ahead?

100% because see, you need to understand, although NMDC is a price cut, but the supply from NMDC is limited to certain extent. They follow a certain system, their process, you have to apply for linkages.

There is an additional requirement getting generated every month on month in this area because of addition capacity of DRI. Right now there is a shortage of pellets in the market.

Meeting the volumes and the pricing, I don't see challenge at all, at least for this financial year, remaining part of the financial year.

Secondly, majorly in the first half, we have sold mainly in Raipur area, or we have looked at other markets also?

No, we we we sell, close to about, say, a periphery of, say, more about, maximum is about 100 km in and about Raipur, that's it.

Going ahead on the expanded capacities, how do we see that changing?

No, that won't change because right now there is pellet coming from outside Chhattisgarh, for example, Odisha is there, so that will stop. Whatever little bit of coming from outside, that will stop first.

See, again, it's a commodity at the end of the day. If there is some price plus-minus, we shouldn't be surprised.

At the moment of it, I can visualize there is a demand-supply gap. With our new pellet capacity, that gap will close down.

Yeah.

Can you put in any number in terms of how much DRI capacity has been added in India over the last 12 to 2 1 to 2 years?

I don't have the data. Let me get back to you on that.

Let me check and get back to you on that. I don't have data right now.

We are very confident that of the incremental offtake also we should not see any challenges given there was

No, no, no. I know DRI capacity in Chhattisgarh at least because being a small town, we keep talking to each other at the promoter level, I know which guy is installing how much capacity, how much is still in pipeline.

That idea we have. Just to give you a data, exact number, I need to go back and come back to you on that.

I need to check.

Okay. Got it.

Lastly, just on the secondary steel, given that we have seen a significant weakness in billet and sponge iron pricing, do you expect this trend to continue in the third quarter as well and some pick up in the fourth quarter?

Hopefully not. See, I really don't know when demand comes and demand goes.

I still wonder suddenly what happened. I hope key demand comes back because the period has been extended now, already been good 5-6 months.

I hope as an industry key the demand comes back and the prices do go up. Otherwise, as an industry it will be tough time to survive this phase.

Yeah.

Got it. Thank you so much.

Thank you.

Yeah. Hi, thanks once again for the opportunity.

Just building on Siddharth ji's question regarding our 2 million ton pellets also coming into the market, are we looking at exports as a strategy sometime down the line just in case there's an overflow of pellets?

Yeah, 100%, of course. See, I always have my one eye in the export.

I do track the market. If you see even Lloyd is exporting a little bit of pellets because of his current supplies.

Exports are always open, and export market is, I would say, it's moderately strong at the moment. If you see iron ore is well above 100, there is demand of pellets in the market.

We are very much open for exports as well if there is a challenge in selling in the domestic market.

Got it. I think couple of quarters back, we did have one shipment for the exports.

Have we done anything during the first half?

No. No.

See, right now at the moment, export only happens when there is actually a necessity. There is no demand in the local market just to sell the additional volumes for the time being.

With the new capacity added up, there might be a situation where probably have to sell every one cargo every month. Never knows how it plays.

We are very much open.

Got it. Got it.

Sir, second question is for the CRM and the battery energy storage. I think for the CRM, we have already done with the order placements in the second quarter.

What's the status on the battery energy storage systems right now? As

Dinesh ji mentioned during the start of the call, we have acquired the land in Aurangabad Industrial Area, it's called AURIC. Signed a industrial policy MoU with Maharashtra government.

We should be starting the demarcation work and other infrastructure work during the next month, and from January onwards, we should be able to start work at the site in full throttle. Machine orders has been started being placing in respective buyers, be it in India, be in China.

That should complete in next 6 months, and our line should be up and about, say, with anything between January '27 to March '27. That's the pre-trial commissioning and all that.

Got it. FY27 end is where we expect the

Yeah. For BESS as well as CRM, we've given the commissioning dates to be April '27, which is FY28, and we should be able to meet that.

Got it. Got it.

Sure. Thank you so much once again.

Most welcome.

We would like to express our deep sense of appreciation for joining us on this call. We are confident that we have been adequately able to answer all your queries.

Should you have any other further questions or need additional information, please feel free to reach out to our investor relation team at Go India Advisors. Once again, we sincerely thank you for all your active participation and support.

Thank you very much. With this, we conclude this call.