Good evening, Swapnali. Thank you for joining us for Rajratan Global Wire Limited second quarter of FY27 earnings conference call.

During this call, from the management side, we'll be hearing from Mr. Sunil Chordia, Chairman and Managing Director, Mr.

Hitesh Jain, CFO Rajratan India, and Mr. Pranay Jain, CFO Rajratan Thailand.

I would now like to turn the call to Sunil sir for the opening remarks, followed by the Q&A. Sir, you may begin now.

Yeah. Good evening, all dear shareholders.

Very happy to connect with all of you today. We are in very encouraging times for Rajratan.

Our earnings are growing faster than revenue. It is led by operational improvement, higher volumes led by higher utilization rates in Chennai as well as in Thailand.

Our operating margins are moving in the right direction. In a manufacturing business exposed to raw material prices, product mix, and capacity utilization, our ability to deliver this margins is meaningful and will only improve as this pressures changes.

Today, Rajratan is amongst top two players outside China and amongst top five players including China. This says a lot about how we have continued to focus on making ourselves a force to reckon with in the domestic as well as global bead wire industry.

Our Chennai plant expansion to 60,000 tonnes is on track and should be completed in the current quarter. We are almost full capacity utilization in the initial 30,000 tonnes capacity which we had installed in the first phase, and now expanding it to 60,000 tonnes.

Debt to equity also is comfortable, 0.6 is the ratio, which indicates a healthy balance sheet. This is also visible in our cash flows.

In September, we have generated positive operating cash flow in standalone as well as consolidated business. Overall, we are very optimistic for the remaining two quarters of this year as well as at least two to three years, we think that Rajratan will continue to grow at this pace.

Now very happy to answer your questions. Yeah.

Hi. Thank you for taking my questions.

My first question is that we mentioned in our presentation that we're planning a 50,000 ton capacity addition in Thailand. What is the broad timeline of this?

As already told you, we are running at full capacity, almost 100% capacity in Thailand, and we are refusing customers locally also. Some of the Chinese companies who buy from us, and we are not able to supply to them.

It is mandatory for us to now expand in Thailand. Maximum it will take one year, okay?

Within next three to four quarters, this capacity will be up and running.

Right. Still focusing on our Thailand business, we saw a strong improvement in the realization at around ₹97,500 per ton.

What drove this improvement in realization for Thailand?

I don't think your numbers are correct, but broadly what you are saying is right. We are getting more approvals from major customers or the multinational clients, and more volume will be going to them in the current quarter and next quarter.

Also the export from Thailand is also improving. All this will improve the performance of Thailand.

That is why further capacity is planned, and with that capacity our cost will further come down. Going down the line for next two, three years, we are very bullish on our Thailand business and performance.

Okay. Congrats again on a strong set of numbers, and thank you for answering my questions.

Thank you.

Hi, sir. Thanks for the opportunity.

Couple of questions. First is how much is the capex number for the Thai expansion?

Ritesh, generally the brownfield expansions are very competitive, which gives you very good return on the investment. Broadly, we should be able to do it in ₹100 crores ballpark number.

Last year, up till now we have already spent about ₹20 crores in acquiring the new factory there, where we'll be shifting some of the facilities. There is hardly investment in infrastructure.

Investment will be there only in the machines and plant and machinery, yeah. Total, including everything, it will be ₹125 [crores?]

, but from now, ₹100 crores is enough, yeah.

Sir, you said shifting some of the facilities, I didn't understand that, sir.

No, no, because we were short of space, we bought one closed factory across the road. Finished stocks, raw material, spool cages, they are shifted in that location, which is not the same land area, it is across the road, yeah.

Okay.

Okay. This closed factory had nothing to do with bead wire, it was something else, it is just...?

No, no, it was something, humne

toh

unka infrastructure khareeda hai, land and shed, yeah, yeah.

Okay. Perfect.

Correct. Sir, second is, can you give some broad numbers on the total exports out of Thailand for first half?

Pranay, you are there?

Yes, sir. I'm here.

First half we have done 8,500 tonnes of exports from Thailand.

In Q2? Hello,

am I audible? Yes,

yes.

No, I am talking about H1, yeah. It is H1, and Q2 is 5,200.

5,200 tonnes.

Correct. Would you like to call out for any numbers for full year?

Will it double or can it be more than double?

This year, total export target from India and Thailand is more than 30,000 tonnes.

Sir, India would be how much?

Close to 14,000, 15,000 tonnes.

14,000, 15,000 tonnes. Okay.

Sir, second question. I think Chennai expansion, any thoughts on increasing capacities over here?

I think we are already marching towards, I would presume, 40 then 60, which is not very far. I presume we have land in place for the next phase of expansion, but how are we looking at it?

I think the incremental growth engine is steel cord, but on bead wire also, are we looking at something with say next three years, five years in mind?

Definitely. The Indian tire market is growing at 8% to 10% now.

In the last entire year, we didn't see a dip in demand. We didn't see even two, three months where customers had cut down their production, okay?

Looking at the demand and the number of export of tires which is increasing from India, I think within next two years, we will have to put up another 60,000 tonnes in Chennai. This, we cannot commit anything now,

okay?

Everything depends on how market is. If there is a return on investment, we'll do that, yeah.

Perfect. Sir, any specific update on steel cord?

The progress, I think earlier you had given certain numbers on revenue and margins.

Which steel cord? For conveyor belting, which we are doing in Pithampur, we have started trials.

It's a small project, and again a very quality-sensitive product. We have some capital equipments yet to be bought and installed, but till that time, we'll be buying semi-finished goods from the market.

I think next month, we'll be able to submit samples to our customers. In all our projections, we are not taking any number of revenue or tonnage in our presentations.

I'm confident that it will be up and running in full scale next year. This remaining six months of this year will go in trials, submitting samples, maybe one lot, two lot.

We'll keep doing that, yeah.

Perfect. Sir, last one.

Would you like to comment on how the competitive intensity is in the local market? I think we are going ahead with playing on the operating leverage, market share, which is great.

From a top-down standpoint, how should we look at it?

As I told you, we had decided to continue capturing market share or at least maintaining our market share. You will see in the numbers, at all premium customers, we are close to 50% of market share.

Low-cost, low-price customers, we are not able to supply, and we don't want to supply, okay? As it is, our capacities are running at full scale, no need to do that.

I am sure there will be some change in the dynamics in maybe one or two quarters, and we should be able to improve the pricing. That's what I can say.

Very difficult to comment on the competition in the market, yeah.

Sure, sir. Thank you so much, all the very best.

Thank you.

Hello, sir, am I audible?

Very much.

Great. Sir, my first question is regarding the Thai expansion.

Historically we have been very conservative in terms of how we expand capacity, or I should say prudent, and only when you have optimally utilized your existing facilities, you go for capex. It is heartening to see the 50,000 expansion after you have fully utilized the facility.

My question is more around at the pace at which you expect to utilize it. I'll tell you where I'm coming from.

Globally the tire bead wire industry is growing somewhere in the 3% to 4% range. If I look at your Thailand numbers over the last five years and last 10 years and do a CAGR, both come to about 12%, 13%.

If I assume you will continue growing at 12%, 13% after the capacity comes in, it will sort of take you five to six years to fill the facility. My question to you sir is, has there fundamentally something changed in the global competitive landscape which can allow us to grow faster and fill the capacity ahead of that five to six-year timeline?

I'm alluding to an interesting point you made in the last concall where you said that there was some, I don't remember exactly, but some environmental norms which were favoring sourcing from Thailand to Europe is one thing you mentioned. You also mentioned that after one, one and a half years of effort, you have finally cracked some global premium MNCs.

These are two of the things you mentioned. Sir, if you can help me understand what has fundamentally changed and what is allowing us to get confidence to utilize it faster, if at all?

Very long question. I'll give point-wise answer in brief.

Yes, your numbers are correct for global market growth and everything, but if you look at regional growth, Thailand capacities are growing much faster,

okay?

Which are growing at 10% to 15% locally, domestically Thailand tire industry is growing. That is point number one.

Point number two, for us in Thailand, we have got major approvals from world leaders in tires, okay? Whom we were supplying locally, now we are supposed to supply them in their different locations in Europe, America, and Southeast Asia, okay?

That will take our capacity or that is already happening. We had to shift a lot of supplies from local customers to those MNCs, and we are short of capacity in Thailand.

My projection for utilizing this capacity is not more than three years, okay? As against your estimate of five to six years.

I'm very confident that this capacity will be utilized in next two years, yeah. Matlab one year of implementation and two years of utilization.

Interesting, sir. My second and last question, sir, is there any

CBAM... CBAM, yeah sorry.

Thailand, we are the only company in bead wire space who can supply green bead wire, okay? Because our source of raw material is green, and which is not available in India, which is not available elsewhere in the world.

It might be available some places, but not available easily. Especially European customers are inclined to buy major quantities of green bead wire from Thailand.

That encourages us to quickly ramp up the capacity, yeah.

That is very interesting, sir. Sir, my second and last question, is there any one-off impact in the other expenses of this quarter?

I saw two comments in the presentation, one was freight cost inflation, and one was fuel cost inflation, both of which I don't consider as structural, these are one-offs and should eventually wear off. What would be the one-off impact this quarter?

Because I would expect with higher volumes, margins ideally should have expanded, but they have been under pressure quarter-on-quarter.

Freight, you must be talking to other companies, freight remains very volatile, okay? We are supposed to supply material on DDP basis, delivered to their door of customer, and freight rates are fluctuating.

To mitigate that risk, some places we have built up a mark-up or kind of freight surcharge. Some customers have agreed.

Then there is CBAM in Europe, there is a quota which has started in Europe. Rajratan being a agile and smart company, we are able to supply bigger quantities in those markets, and we are of course taking risk and of all this volatility, yeah.

Thank you so much, sir. All the best.

Thank you, thank you.

Good afternoon, sir, and congratulations on a good set of numbers. Sir, you mentioned that the capex in Thailand is closer to about ₹100 crores.

Is it fair to say that if you're able to utilize in about two years' time, then eventually the payback can also come back in two years of this 100-odd crores?

Payback again depends on the profitability, margins, everything, okay? As told you, our focus is to consolidate our market share, and I believe once you have a bigger market share, your profitability always improves, okay?

We don't see business on absolute bottom line, we see it on a comparison: how our competition is doing, how the market is doing, how the other industry is doing. We find Rajratan in a very, very consolidated position today, okay?

Very difficult to commit that payback will be two years, but it is absolutely necessary from the point of view of supplying to marquee customers. This increase in capacity, and ₹100 crores is nothing.

It would have costed us maybe close to ₹300 crores for a greenfield project in Thailand, which we are doing for only ₹100 crores, yeah.

Secondly, sir, if you look at EBITDA per ton, it has sort of declined by marginal 3% on a YoY basis. Now, we are seeing a very strong revenue growth, but essentially the operating leverage benefits are not coming at the EBITDA level.

When do you see the operating leverage benefits also coming to the EBITDA in terms of EBITDA per ton?

Let me tell you, it will not reflect in numbers, because a lot of our inputs have gone up: the gas price, the electricity, the transportation, diesel cost, a lot of consumables, packing material. Everything has become expensive since this war has started, okay?

In spite of all those increased costs, we have been able to maintain the EBITDA per ton. I think, which is commendable, okay?

If you don't appreciate it, at least I would like to appreciate that we have been able to do that. Our strategy also is to not reduce production or not walk out of the market, okay?

As told you, we want to consolidate on the market share further.

Sir, in terms of profitability on the export side, given that exports will be driving the volume growth going forward, is it fair to say that exports are more profitable on a per-ton basis compared to either selling in the Thailand local market or selling in the Indian domestic market?

Export overall are good, it's a good business, profitable. In India also or in Thailand also, in our conversation, we have said there are marquee customers.

For us, marquee customers means who gives a good price, where our product is appreciated, okay? There are customers who don't want to pay good price to us, export is better than those customers.

If we are not exporting, means we'll have to sell it to customers where profitability is very low, or probably there is no profit left for us. In our priority, our marquee customers are number one, export is number two, and then some 5%, 10% we continue to sell in the customers where profitability is not there.

Lastly, sir, if you look at rubber prices for your customers, it has actually gone up more than 50% on a YoY basis, and we have seen some impact in terms of profitability for the tire companies as well. Given that your customers are going through a tough time, are they also trying to squeeze you or because you are not a very big sort of cost in their overall tire manufacturing, you are able to pass through easily?

Nothing is easy, whether rubber prices are going up 50% or 10% or it is going down. The purchase manager of a company will always bargain, okay?

We always have an argument ki kya hamare bead wire se aapki balance sheet theek hoti ho to le lo, free mein le lo. Usse hoga nahi kuch, we are only 3% of your total tire cost.

End of the day, we are getting reasonable support from our customers also.

Great, sir. Thank you very much, and all the very best.

Thank you, Bhargav.

Yes. Hello, am I audible?

Yes,

I had a few questions. On our Chennai facility, you mentioned that the rest of the 30,000 ton capacity will be able to start the commercialization from this quarter, right?

No. It is not that something new we are starting there.

We were already having a capacity of 30,000. We started adding more machines, and machines are modular.

If you ask me, today our rated capacity in Chennai is 40,000 tonnes. Few more machines will be added next month, on a monthly basis from 3,500 we are targeting 4,000 tonnes.

From 4,000, we'll start making 4,500 tonnes. Gradual improvement and gradual increase in production per month to ramp up the capacity up to 60,000 tonnes, yeah.

That is the plan. There is no starting date or ending date in this, yeah.

Okay. By end of FY27, can we expect that the capacity will be improved till 60,000 tonnes?

No, to give you a flavor, this year from Chennai, we will be at least making 37,000, 38,000 tonnes in the current financial year, which is already more than the 30,000 tonnes overall capacity, yeah. The balance will come in the coming years.

Okay. Understood.

What is the incremental cost in adding each machine? Like you said, gradually we are adding the capacity.

What is the incremental capex that we are spending there? No,

I recall we had spent ₹270 crores for a facility of 30,000 tonnes, and we spent another ₹30, ₹35 crores to complete it to 60,000 tonnes.

Understood. My next question is on our Thailand capacity.

You mentioned that our capex, the brownfield capex that we'll do will be of ₹100 crores. How are we going to fund this capex?

Is it going to be from internal accruals?

Both. It's a combination of internal accrual, Thailand balance sheet is accruing cash month-on-month basis, and there are banks.

Loan is also at a very competitive rate, below 4% we borrow from bank. It will be combination of loan and internal accrual.

The capacity, we can start operations in that capacity from FY29 start, right? Because it will take a year to build the machinery and start with that.

FY28, FY28.

No, like you mentioned that we'll take a year for the capacity to start.

Yeah. One year from now, okay?

We are in

September. One year from now.

Yeah.

H2 FY28, we can expect the capacity to start.

Yes.

That will be of additional 50,000 tonnes.

Yes. It will take two years to utilize that capacity based on the current demand is our projection.

Right. I just wanted to understand, now our margins have been under pressure and we are doing all this capex also.

Can we expect the margins to improve gradually from here on? Do you think this is the bottom part of the margins?

I can say that our current margins are rock-bottom. It should not go below this.

Anything from here will improve, okay? We have decided to compete head-on in the market.

We don't want to leave the space for competition to grow.

Right. My next question would be on growth.

We've had very good revenue growth in Q1 and Q2 year-on-year. Can we expect this growth trajectory of around 27%, 28% to continue for the full year and for FY28 as well?

Yeah. As I can talk about volume.

Revenue is a function of price and other dynamics also work. As I have been saying, 15% to 20% volume growth year-on-year, you can safely consider for Rajratan.

It is combination of growth in Thailand, in Chennai, and some in Indore. This will continue for next at least 10 to 15 quarters, yeah.

We have been consistent in saying this.

Right, okay. Understood.

That is it from mine. Thank you so much.

Thank you.

Yeah. Hi, am I audible?

Abhishek. Oh,

yeah. Thanks for the opportunity.

First my question is about EBITDA per ton differences between Thailand and India. What is that difference, and on blended basis, where are we going?

How are we going to improve that?

Let me tell you, we never compare India EBITDA per ton and Thailand EBITDA per ton. Thailand has different set of customers, different market, different source of raw material, their cost of manufacturing is different,

okay?

You have to divide your question in two parts. India business is very different, the source of raw material is different, prices are different.

In Thailand, we source globally raw material. Thailand is a market which is open for Chinese competition.

Very difficult to answer your question. If you can break it down into two questions, I'll be happy to answer that.

Yeah. No, then my other question is that Thailand expansion we are doing, are we targeting similar set of customer, same customer mix or are we going from current customer mix to premium or export customers from there?

Let Pranay answer this question. Now he is better connected to all the customers than me.

Pranay?

Yes, sir. I would answer that Thailand itself is a growing market, and we have recently got good approvals in our marquee customers, which sir has just mentioned, and they are very hopeful with few two or three good counters which are renowned all over the world.

The growth which we are expecting will be of course with the premium customers, increasing their shares, and the balance will be in the Southeast Asia and European market. That is the target for the growth what we are presenting now and what we are going to grab the new customers, yeah.

Okay. That's it.

Thank you.

Yeah.

am I audible?

Yes.

I wanted to ask the decline in other income, is there any one-time reason or what is a sustainable other income, absolute number we can assume?

Other income, because we are a company having a subsidiary in USA, a subsidiary in Thailand, and the consolidation happens. A lot of revenue items also when we consolidated, reflects in the other income.

Other income is not extraordinary income which generally is not part of the EBITDA. I'll say this is very much part of the EBITDA for us.

Otherwise, what is your question? I didn't understand.

What is the reason for on a QoQ basis, the other income has declined significantly, earlier it was 3.4 and now it has declined to 0.66?

I think kuch galti hai aapke numbers mein. Other income on standalone basis has gone up, and on consolidation, because of consolidation that has gone down.

Haan, consolidation

mein. Haan, toh woh kuch US ki balance sheet jab consolidate karte hain, toh other income knock off ho jaati hai, yeah.

Got it. Thank you.

Haan ji.

Hi, sir. Just quick questions.

Sir, what percentage of our volumes will be premium for India and Thailand? The reason to ask this question is you indicated that as we move more towards premium customers, we will get rid of the bottom customer base.

Just trying to understand the impact on profitability it can have, say over next two years, three years. If you could help us understand the percentage of premium volumes and how much is the difference in pricing for a standard customer versus a premium customer?

Ritesh, it won't make a big difference in India, because in India premium customers we are already at more than 50%, 60% counter share, okay? We are not projecting to further consolidate that market share.

Something may happen because of our Chennai location, okay? That is not our projection.

Definitely the big difference will come in Thailand, where the price difference also between a premium customer and a Chinese customer is in some cases up to 10,000 baht per ton, which is in Indian rupees today close to ₹25,000, ₹26,000, okay? That should make a difference, yeah.

Sir, what percentage of our volumes...?

Premium customer volume growth takes time, okay? It is happening.

Every year, we add more volume to that. Pranay,

tu kuch bolega ispe? I'll answer that question.

Currently around 30% to 32% of our sales are towards the premium customers, and as sir has mentioned, it will take a time to grow, but few marquee customers are already approved and we will supply them. We expect this to grow by 40, means 30% will become 40% in the coming year.

Product mix.

Correct. That is helpful.

Related question, basically when we look at exports, how much is the difference in working capital days, basically when we are catering from India to say Europe or US, likewise from Thailand to Europe to US?

Pranay?

Yeah. Working capital for European customers is around 70 to 80 days, what's the credit.

It also includes around 40 days of transit time. Transit time to Europe is 40 to 50 days from Thailand.

That is the reaching time, and after that, 30 to 40 days is the credit period. We can say around 70 days is the working capital for exports to Europe.

As against local I think is 30 days payment term?

Local is 30 days. On an average is 40 days is the receivable collection days for local.

Sir, I didn't understand, sorry.

Arre, local bechte hain agar Thailand mein, toh 40 din mein paisa aa jaata hai, average. If it is exported to Europe, 70 to 80 days because 40 days is the shipping time, yeah.

Correct.

For US, it is 90 days.

Perfect. Sir, my second question is you did indicate Thai facility has the benefit of probably scrap usage and its green bead wire.

Are we getting any benefits out of it?

Yes, definitely. We got few quick approvals only because those European customers were very keen to buy green bead wire because of their targets of making green tire and reducing carbon footprint.

Thailand also has an advantage, the CBAM which is applicable in Europe now, EU. Thailand is much competitive when the CBAM will be kick in, compared to India, Thailand is a better position.

Fair. Sir, Indian exports, do they target Europe or is it largely towards US, how should we look at it?

From here, we are exporting to both the continents. It is depending on which product is approved from which location.

Correct. Sir, there will be a negative impact because I think I don't know the source of our feed for the Chennai and Pithampur plant, it won't be scrap-based wire rods, so that carbon intensity will be higher?

No, it is higher. Those customers are not supplied from India.

We cannot.

Okay. Fair.

This is helpful. Thank you so much, sir.

Thank you.

Thank you, Ritesh.

Hello.

Varun.

Congratulations for the good set of numbers, sir.

Thank you. Sir,

my first question is that what were the tariffs on our products when we were exporting to US when the tariffs on India were 50%?

For long time, the tariff on our products is 50%. Our product falls under Section 232.

All the steel products exported to US face a 50% duty. From India or from Thailand or from anywhere else, and against China, it is little more.

They have a additional duty of 12.5%.

Sir. Sir, and my second question is that who would be our main competitor?

Would it be Bansal Wire or would be Tata Steel?

Both.

The main competitor. Would it be Bansal Wire or Tata Steel?

We consider both of them as competitors, but Bansal is new, okay? Still, according to us, he's not in all the counters able to supply.

More competition with Tata than Bansal,

yeah. Sir.

Okay. Thank you, sir.

Good evening, sir. Thank you for giving me this opportunity.

I just wanted to ask you regarding this green bead wire, as you mentioned, you said that you are the only supplier which is supplying from Thailand and you also got the approvals regarding the same to export it to Europe because of the green, whatever the globalization it is, the green thing. Can you highlight some more details on this, why don't we have some other competitors in this green wire?

Very simple reason. Thailand mein the source of raw material, he uses 100% scrap,

okay? Okay.

The material coming out of the scrap, that is called green steel,

okay?

In India, nobody is making wire rod out of scrap. They are still using the iron ore and pellets and those raw material.

That is the difference. Our Thailand source, he uses 90 92% to 95% scrap as his raw material.

We use that wire rod for making green bead wire, that's it.

Okay. The technology is open or is it that any competitor can come in and make this thing?

If we want to make in India, we are not able to do it. Some customers who are doing some trials, okay, they place a small order on our Thai company, and we supply them from there to make some prototype tires and trials and everything is going on.

To yeh abhi it's more of theory. It is more aggressive in European market, but other companies are also, because of their commitment to become a green company or reduce carbon emission globally, there is a flavor, there is a pressure, there is a need for green, yeah.

Perfect, sir. Perfect.

Thank you so much for this answer. May I know, sir, I understand that this is very initial and nascent stage that we are heading towards green revolution and everything.

Are we expecting some good amount of margins or it is just for green energy and everything, the introductory stage, as you said? What kind of margins can we expect once this scales up?

Nahi, dekho, kya hoga, margin-wargin to you cannot project today. Because of our ability to supply green bead wire, we got approvals faster in bigger counters, European tire makers,

okay?

That is the advantage. They got attracted.

In short time they said, 'Okay, okay, if you are supplying that product, we will approve you.' To entry ho gayi aur business chalu ho gaya, haan.

Understood, sir. Basically initiation of market share...

That green bead wire I can sell at $300 more, no.

Okay. Initiation of market share, I agree, sir.

Entry into the new market, yeah. Yes.

Yes.

Yes.

Agreed, sir, agreed. As you said that on the steel rod which is for conveyor belts, you said that it is in the nascent initial stages.

Just wanted to understand any other products in the pipeline other than this which you might be testing and

that is on the pipeline? Not right now.

Our focus is on building up capacity in Chennai and Thailand,

yeah,

which I can see will be consumed very quickly. Right now, nothing beyond this, yeah.

Okay. Thank you so much for this, and good luck for the future.

Thank you so much.

Thank you, Sanjay.

Namaskar, sir.

Namaskar. ): Meri

awaaz pahuch rahi hai sir? Haan, acche se pahuch rahi hai.

): Ji, sir. Just to reiterate two points, you mentioned that firstly our EBITDA margin will be in the vicinity of this 12%, 7% 13% isi band mein hum H2 expect karte hain, minimum yahi rahega margin?

Haan, main that is what hope karunga ki

better ho jaye, but this is the minimum. I think this is the lowest margin because of our volume and our efficiencies, we are able to take this double-digit volume, but when I look at other balance sheets of our competitors, none of them globally is making double-digit EBITDA margin, yeah.

Isse niche girne ka sambhavna kam lagta hai. ):

Sir, volume ke front pe, we are getting additional 7,000 from the Indian domestic operation, that is the Chennai part, for H2?

Yes. ):

That is what the volume growth will be expected volume growth for H2 from the Indian part is...? Already dekhein,

India se 14% growth hua hai year-on-, matlab first half to second half, and we are on track to continue growing in the second half also. Consolidated growth of 17%, Thailand has grown by 22%, yeah.

This year, we should end up more than close to 160,000 tonnes of business, yeah. ):

160,000 for the entire both the profiles,

H1 plus H2? Consolidated, yes.

): Haan. Sir,

last year we did 133?

We are targeting 160. ):

160 out of which we did 71 for the first half, right?

Haan ji. ):

1 second, ji. Okay.

Sir, secondly, when we look at the balance sheet part, sir hamara capital work-in-progress closing balance ₹90 crores ka hai for standalone. For ₹90 crores standalone, it is for both the steel cord project as well as the Chennai capacity, that is what the closing balance is?

How much are you going to capitalize...?

Nahi, ismein

kareeb

₹70 crores ka toh sirf yeh steel cord project hai, okay? Aur chhota-mota Thailand ka hai, kuch Chennai ka hai, yeah.

): Sir, ek baar fir se kahein? ₹70 crores is for steel cord project,

okay,

which is still not capitalized, okay? ):

Okay.

Out of ₹90 crores, yeah. Aur ₹10-₹10 crores aap dono jagah ka le lo, mota-moti: Chennai as well as Thailand.

):

Kyunki sir then that figure is 115 when we look at the consol part, our closing... Haan.

Haan,

yeah. The real number for Pithampur is ₹80 crores, okay, and Chennai must be ₹15 crores, and ₹20 crores in Thailand.

): Okay.

Out of that ₹80 crores jo hum steel cord ke purpose ke liye kar rahe hain, that will get capitalized when, sir?

I think end of this quarter, we should be capitalizing that, kyunki abhi trials chal rahi hain. Once we start regular production, we'll capitalize it, fir depreciation

chalu ho jayega uska. ): What should be the expected revenue contribution for H2, sir?

For H2, abhi in all our discussion, we are not counting steel cord revenue. ):

Sir uska fir hamare H2 par prabhav rahega on account of depreciation and interest?

Not very big, kyunki usmein bahut volume growth abhi hum nahi expect kar rahe hain H2 mein, okay? Trials hogi, customer ko samples jayenge, approval hogi, we need ISO certification, we need BIS certification, all these formalities will take lot of time.

I am confident that next financial year it will be full, matlab it will be running at good capacity utilization. ):

Okay. Sir, when we look at our borrowing part also on a consolidated level, the borrowings have gone up.

What explains this ₹90 crore difference for the consolidation? When we look at consolidation, it is only, I think, Thailand that gets consolidated.

In the borrowing and as well as in the inventory part. Can you explain since you are mentioning that...?

Since you have 27% 27% revenue growth hua hai, okay? ): Hmm.

Majority of this is working capital borrowing, and it is more so because working capital cycle for export is higher than the local, okay? ):

Correct.

Majority of this is borrowing for working capital, and it is in proportion to the growth of business. ):

Okay. Sir, lastly, sir jo humne is abhi 6 mahine ka jo capex kiya hai, ₹51 crores ka standalone mein, that will be major aapka steel cord project ke liye hi hai, the major part of it that we have invested?

Yes. Yes.

Yes. Yes.

):

Okay. Sir, ismein humne infrastructure kya create kiya hai?

It is only the plant and machinery, I think so, that is what

the investment...? No, no, no, no.

Hamari jo first factory thi, usko dismantle karke humne kaafi bada shed banaya hai, almost 2.5 lakh square feet, okay, with a capability to take more machines and more volume in future. Usmein bhi paisa laga hai.

): Okay. Right.

Lastly, sir, when we look at our EBITDA growth, EBITDA growth sir hamari 10% hi rahi hai, maine sab 10% rahi hai quarter-on-quarter. Translating into...?

14% rahi hai. ): Nahi, sir, main Q-on-Q ki baat kar raha hoon.

When we look at a consol level, Q1 ka EBITDA tha 41.71, and Q2 was 45.79. Achha,

that is, yeah. Year-on-year it is 14, yeah.

):

Haan, so that translates into 10% Q-on-Q. Taking into account jo aap volume growth expect kar rahe hain, yeh number ki kya trajectory hogi in terms of the growth part?

Aur yeh

abhi 10% se hi expected rahega? Nahi, our projection for Thailand is better.

You will see better number from Thailand in the coming quarter as far as EBITDA is concerned, okay? We don't expect much improvement in EBITDA in the remaining two quarters in India.

As I told you, market is competitive, okay? We are also one of the head-on competition with other two names which were discussed earlier.

In consol, you will see improvement coming from Thailand. ):

To conclude, Thailand se margin contribution aayega and volume India se aayega, that is what...?

Nahi, Thailand se dono aayega. Thailand se volume bhi aayega aur margin bhi aayega, okay?

Aur India se volume aayega, margin contribution percentage mein nahi badhega. ): Okay.

Because of Thailand, we have done 29,000, 60 ki capacity

mota-moti wahi

utni rehne wali hai ki usse upar bhi hum reach kar sakte hain? Haan, toh iss saal mein toh wahi rehne wali hai.

): Correct, sir. Theek hai, saab.

Bahut-bahut dhanyavaad, sir. Thank you.

Haan ji, thank you.

Hey, sorry, I was on mute. Am I audible now?

Yes, Pranay. Yeah.

Sorry about that. My question is with respect to the India capacity.

After Chennai scales up, I'm talking with respect to Q4 of FY27 as an example, by then our annualized capacity in India would be 132,000 tonnes, 1.32 lakh, which is effectively 120,000 of bead wire and the remaining is the other product.

10,000 10,000 tonnes of 10,000 tonnes of steel cord.

Total is 132,000 tonnes, right? Including steel cord.

142 ho jayega.

Okay. Let me then be sure about this.

I'm looking at your presentation. Pithampur has total capacity of 72,000 tonnes, of which 60,000 is bead wire, that is correct?

Correct. We are adding 10,000 tonnes of steel cord also.

Achha, because I think the last time I spoke with the team, I was under the impression that black wire is being converted into steel cord and it is not incremental, that is wrong then?

No, no, no. I also told in the call that right now, we'll be buying raw material, semi-finished goods, but we are installing few more equipments and lines to have in-house capability, yeah.

Achha.

Okay. If I then for a second ignore that additional 10,000, because anyway we are not building anything into this year, it's probably next year.

If

I focus only on the 132,000 tonnes and I divide it by four, I get 33,000 tonnes for the quarter, which is the capacity. What is the maximum we can produce on that 33,000 tonnes even if we stretch ourselves to the max?

So,

90% of that.

90% of that.

We are doing that in Thailand, we are stretching to that capacity, yeah. Ha,

hence my question, sir. Thailand mein, aren't we doing almost 100%?

Because I think we sold 15,260 and our quarterly capacity in Thai is 15,000 tonnes, so...

Yeah. You are right, you are right.

Production was a little lower than this, it was 4,600 something. Yes, we are doing 100%.

Some debottlenecking, some change in the sizes, okay? When we say capacity, it is based on some assumptions of sizes and speeds and, okay?

If there are orders for thicker wire, thoda capacity badh jaati hai. Those complications are difficult to explain you on phone, yeah.

Nahi, nahi, nahi, perfectly understood. Sir, the reason I'm asking this is obviously at the start of the call, you said that basically now nothing is approved on Chennai going beyond 60,000 ton capacity, and obviously basis how it gets utilized and basis the return on investment, you will decide.

I'm just thinking India if it continues growing in 13%, 14% range, sometime in the second half of FY28, likely you will be fully utilized. Chennai completely utilized, and Pithampur completely utilized on the bead wire front.

When

assuming everything goes on track, how do you plan to progress in terms of timeline of events? Because first you have to take board approval, then there'll be a lead time of the machines being ordered and coming in.

Basis your...

I have answered in the previous question that we have the land available in Chennai, and is a very good location, very well-located. Profitability, margins are much better in Chennai, okay?

Our competition is far away from South, which encourages us to quickly ramp up the capacity in Chennai. Unless there is a board approval and there is a firm plan, I don't want to announce.

If you want to foresee, yes, I also foresee that expansion in two years' time.

Understood, sir. Sir, last question I'll ask, sir, just to gauge how the growth could be from a India front, since you have explained Thailand beautifully.

Sir, India in FY26, we did about 81,000 tonnes, 82,000 tonnes, if I round. I can split that 82,000 tonnes into 62,000 to 63,000 tonnes of domestic bead wire consumption, about 10,000 tonnes of black wire, if I assume it's fully utilized, and about 9,000 tonnes of export from India.

Is that correct, sir?

I am not so handy with numbers jitna aapko

yaad hai. Broadly, it is correct.

It is correct number, yeah.

Yeah. I'll tell you where I'm getting at.

If I were to think about what the growth could be from a more medium-term perspective here, the domestic consumption of bead wire would be constrained, right? Because anyway, it is limited by how much capacity your tire guys are putting and obviously you're confident of gaining market share, but you are already at a high market share.

Maybe 10%, 11%, 12% could be the growth on the domestic consumption piece. I am very excited about the export from India piece.

This, I think, historically has been in the 1,000 to 2,000 mark. After Chennai sort of successfully ramped up in FY26, that went to 9,000.

I think this year you could almost not double, but a bit less than double, maybe 14,000, 15,000, 16,000. 40% 40% growth.

40%

40% growth.

40% growth. Sir, what is driving the exports from India, and how much runway for growth do you think there is?

Because for me, at least how much I understand your India capacity, this is going to be the material growth engine sort of, where you can gain market share and drive faster growth.

What is driving growth is the quality we make. Other than Rajratan, nobody else is able to export.

It is also because of our long, long relationship in India, Thailand with those global customers. We clearly see that there is a demand China Plus One in our product, okay?

People are not very comfortable buying 100% from China, okay? We are getting, and our hard work of last two, three years of making effort, we now have a subsidiary in US, very soon we'll start a subsidiary in Europe.

Our marketing people are already located there. Their efforts, our efforts have given this result, and I can say this is only beginning.

This volumes will keep growing if everything goes well, yeah.

Would it be continue to driven by Southeast Asia and US? I think these are the two geographies I had captured from past concalls.

Southeast Asia, I don't see much growth because China is very competitive there. Yes, growth in Europe and USA is certain.

Got it. You said 40% is the growth expectation this year from India exports?

Yes, yes.

Great. Thank you, sir.

You've been very, very patient in answering questions. Thank you.

Thank you so much for your interest, yeah. I thinks over now?

Okay.

Good evening, sir. Sir, last price hike we took was in the first quarter when the steel prices had gone up considerably in the last quarter of the last year.

In the last couple of months also, the steel prices have gone up significantly, and we normally take price hike on quarterly basis. Any hike we have taken at the end of this second quarter?

We have been able to take some hike in some cases where prices were not finalized or we were not committed at old price. Remaining we have to take end of this quarter.

End of the third quarter.

Yeah.

Currently the pressure on margin is more due to the freight and the other raw materials rather than steel? Am I correct, or steel is also one part?

Yeah. Nahi,

steel ka

impact abhi aaj jo aap paper dekh rahe hain, result dekh rahe hain, usme nahi hai, okay? Usme impact zyada other cost ka hai: mainly energy, gas, petroleum, packing products, dies, everything has gone up, transportation cost, yeah.

Export mein sea freights and they are crazy, yeah. Steel prices, yes, are going up, and I think it will continue till mid of November.

Whatever it is, December onward we have to pass on the price increase in remaining counters.

Okay. Sir.

Thank you. Haan ji,

thank you so much.

Thank you all the shareholders for your interest in Rajratan. We are in exciting times.

In spite of very turmoil market, very turmoil geopolitical situation, your company has been able to show a good growth, and we are confident of continuing this growth journey for next couple of quarters. Please keep watching us, and we'll try to do our best.

Thank you so much.