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00:00Let me bring on board Anurag Mantri, Group CFO and Executive Director at Jindal Stainless
00:05to talk to us about numbers. Now, Mr. Mantri, let me first start off with your top line.
00:11Talk to us about realizations as well as volumes. Talk us through realizations. Volumes
00:18seems like a slightly muted quarter when I'm looking at it sequentially.
00:21Yeah, so volumes, it's basically if you see this quarter, despite we continue to face
00:31pressure on the export market and also the domestic market on some of the segments which
00:37are dominated by Chinese and Vietnam imports, which continue to put pressure. And we also
00:41had a plant shutdown. So volumes are still we managed to, in fact, if you see domestic volumes,
00:46we have managed to grow by almost 10% quarter on quarter in despite all these challenging scenarios.
00:52So what we are saying is that the volumes are almost flat, but if you see EBITDA per ton,
00:56we actually improved on that basis. So overall, if you see, we are actually, despite the global
01:04challenging scenario in exports, the domestic market pressures on the Chinese and Vietnam
01:10import, we continue to maintain a good mix of our product mix because with our agile business
01:15strategies, which helped us into maintaining the balance between the volumes and the EBITDA
01:20per ton margins. Mr. Mantri, just quick question with regard to the volume number.
01:28Plant shutdown, how much, how adverse was that to volumes? Just if you can give us that perspective,
01:33because that will likely unwind, right, in Q3 as well as second half of FY25. So how much would
01:39that add to volumes? Just want to contextualize that. Of course, demand not in your control,
01:44but supply is. Yeah, so absolutely right. So that's the reason we are expecting H2 volumes
01:50to be better. And what we are saying that full year, we will still be able to achieve the 10
01:54to 15% of volume growth despite facing a volume downward trend in first two quarters. So we'll
02:01make it up on these volumes in H2. So part of these volumes in H2, despite the global challenges,
02:08because export, I must say that what we were targeting earlier of 15%,
02:13I think we are not going to make it up to because our key geography is Germany,
02:18other European Union and US. High-end exports are not actually, these economies are not growing,
02:23plus Westward crisis and the Red Sea crisis is putting pressure on the freight cost,
02:28which is making export further unviable. And some of the domestic segment, as I mentioned,
02:34continue to be under pressure from Chinese and Vietnam imports. So despite all this, we are
02:40expecting that we'll have a 10 to 15% volume growth, maintain that momentum. So it will be,
02:47H2 will be expected to be higher than H1. Well, Mr. Mantri Varsha here, so just now you said that
02:54you are expecting 10 to 15% of volume growth because of the challenges that we are seeing.
02:59So does that mean that you are actually lowering your guidance of volume growth of 20% that you
03:05have been giving in the past? You are right in a sense that because earlier our guidance was 20%,
03:13because we are expecting at the second half of the year, the European market, especially the
03:20Germany and the European market, some of the US market should go at good traction, which right
03:25now we are not seeing much of the visibility. So technically we are actually reducing our export
03:30guidance from 15% to 10%. That itself, but we will partly make up of some of these volumes from
03:38the domestic market, which we expect continue to grow for us. And therefore we are saying that we,
03:43otherwise we would have gone much below 10%, but we are saying that we will make it up through the
03:48domestic mix on some of the volumes. So we are saying that 10 to 15% of the volume growth is
03:55still possible, which is a good healthy volume growth. And considering that last two years,
03:59we have been delivering 20% volume growth every year. So on a sustainable basis, I think we are
04:05on a right track to our product mix despite the global challenges and some of the domestic market
04:10pressures. So I wanted to ask you about your EBITDA per ton. So what is the current EBITDA per ton
04:18that you have and where you want to take this considering FY25 and which will lead to your
04:25margins too? So like if you see last three quarters consecutively, we are actually with
04:32the product mix, we have been growing our EBITDA per ton despite all the challenges which I mentioned
04:37earlier. We are close to 7,800 and 900 EBITDA per ton right now. We are, what we are saying
04:45that full year basis, so H2 we should do better than H1 EBITDA per ton. And what we are saying
04:52is that on a full year basis, we will have a good balance between the volume growth and EBITDA.
04:57So we should be able to deliver around 18,000 per ton of the EBITDA guidance. So even if I
05:03understand right, Mr. Mantri, even the EBITDA per ton guidance is at the lower end of the band
05:08because you are guided for 18 to 20,000 rupees per ton. So just trying to understand that,
05:13is that the right way to look at it? You are right in the sense that we guided for 18 to 20,000.
05:20So we are saying, what we are saying is that we will be close to 18,000 at this stage because
05:26the kind and export typically we do only on the premium segment export. So therefore those markets
05:32since the larger almost 50,000 ton of the volume from exports are actually missing in this time.
05:40So that will obviously put down the, bring down some of the blended EBITDA margin for us.
05:46But still we are saying that we will be trying to maintain through our mix and focusing on the
05:51high-end segments like process engineering, railway, some of the good development what we
05:57are seeing. Like recently the government of India has given this high-speed bullet train which was
06:04to be imported. They have now awarded contract to the local manufacturers for the coach where
06:09there will be a stainless steel based coach. Vande Bharat is already stainless steel. Our
06:14Honorable Mr. Nitin Gadkari has said that to build a sustainable infrastructure in the coastal area
06:20so which will be more and more use of stainless steel into highways and these construction sites.
06:26So with this we are saying that we will still be able to maintain our 18,000 per ton of the EBITDA
06:31guidance. What we said earlier despite the export not doing well and continuous influx of the Chinese
06:37and Vietnam imports. Also so sticking to export and now the current contribution stands at 10%
06:45for exports and 90% for your domestic market. Now as we know that we are facing challenges in export
06:51where do you want to take this number to because that will actually affect, may affect your EBITDA per ton.
06:58So we know there is a continuous challenge. We are trying to develop a few new other markets
07:04like South America, South Korea, Middle East. Also trying to develop the market like Japan and
07:10Canada gradually with that. But obviously that may not be able to mitigate the larger volume
07:16which used to go into the European and US market immediately. So with considering all this blend
07:22we are still expecting that export we should be able to deliver 10% on a full year basis.
07:27So we will continue to maintain this ratio of 90-10 in the full year basis.
07:32Okay with regard to headwinds Mr. Mantri, freight issues and how quickly do you expect
07:41a reversal especially from some of the challenges that you are seeing on the demand side of things.
07:49How quickly do you expect things to improve as well as just give us talk of some of the
07:54other challenges which you were seeing in Q1. Freight issues, container shortages,
07:59how is all of that playing out? So I assume you are talking mostly for export right? Yes.
08:06Freight issues are unlikely to be because it all depends on how the West Asia war continues to
08:13develop on that side. So we will continue to have a freight cost as well as the time delays
08:20because that's increasing the time almost by 10-15 days. Freight costs have almost 3-5x at
08:29this point of time. We are not banking on this right now frankly. It's difficult for me to predict
08:36that when this issue will be resolved. Gradually it should get stabilized because container issue
08:43also lies because of when China economy was not doing well, they actually increased their
08:48exports from China and garnered a lot of containers. That issue is out now in my opinion
08:56but still despite all these what we are saying is that we should be able to balance with that
09:0110% of the export. We don't see that export growing right now. Right. Also one important
09:06question and the last question before I let you go. You were planning to explore new consumer
09:11facing segments including utensils and stainless steel bottles. Anything on that?
09:17No, it's not right. We were not planning to go into the stainless steel bottles and all these
09:24segments directly. That's a downstream. What we are saying that we will continue to improve our
09:28product mix and strengthen our product portfolio to move gradually towards. So we have a very good
09:36service center which actually do the customized product for say auto segments and some of these
09:42process industries. So we'll continue to expand and more build on the solutions towards near to
09:48that but we were not trying to go directly to a segment like stainless steel bottles like that.
09:54That was never on the card. Okay, thank you so much Mr. Mantri for all of that perspective.
10:00Good having you, good chatting, good getting perspective. Thank you. Thank you.