Full Year 2024 Jindal Steel And Power Ltd Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Amit Dixit - ICICI Securities Limited - Analyst : Good evening everyone and thanks for the opportunity. Congratulations for a good set of numbers. I have two questions. The first one is on the inventory. If I see the inventory has gone up YoY, while we find that commodity prices in general have gone down. So is it a finished product inventory or raw material inventory? How much would be the finished steel inventory at this stage? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2024 / 12:30PM, JNSP.NS - Full Year 2024 Jindal Steel And Power Ltd Earnings Call

Question: Amit Dixit - ICICI Securities Limited - Analyst : Okay. Sure. The second question is, in the absence of presentation at this stage, if you could just elaborate on the progress of various packages with respect to the ongoing group project?

Question: Amit Dixit - ICICI Securities Limited - Analyst : Okay. What would be the capex guidance for FY25?

Question: Sumangal Nevatia - Kotak Securities (Institutional Equities) - Analyst : Yeah, good evening, sir. And thank you for the opportunity. My first question is on the volumes, given we are seeing good progress on all the expansion projects, and they remain largely on track. What sort of volume can we expect overall for FY25?

Question: Sumangal Nevatia - Kotak Securities (Institutional Equities) - Analyst : Understood. Just continuing on this one is, if you could just share what's the status of the two coal blocks where mining lease is yet to be obtained. When do we expect that to kind of start? And secondly, slurry pipeline, we are still maintaining 1Q '25. So if you could just update I mean, given that it's maybe a month away from actually commissioning, what sort of savings do we expect from the slurry pipeline?

Question: Sumangal Nevatia - Kotak Securities (Institutional Equities) - Analyst : Got it. Thanks and all the best.

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : Thank you for this opportunity. Just wanted to understand in terms of we have a capital allocation plan that we have specified the capex at INR7,500 crores to INR10,000 crores. What could be the impact on the project delivery either if we are at the lower end or at the higher end? Would this target be achieved even if we are at the lower end?

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : So the way I understand is even if we spend INR7,500 crores for the next two years, our target, we will still be able to deliver on all the projects without any delay for the purpose of capital expenditure. And even if we do INR10,000 crores, there will not be any acceleration in this projects. Am I understanding you correctly?

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : But for the immediate 2 years, are you expecting anything above this range or to be spent below this range to deliver on the timeline target?

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : Sure. The second question was about our arrangement with RINL where we were looking to sort of secure higher metallics, which could allow us to operate crude steel operation at a higher run rate, is there any further progress on that, that you can share and whether we will receive any benefit of higher metallics in FY25?

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : Just to follow up what is the quantity that we are currently getting? And what is the quantity that we are envisaging for FY25?

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : From a perspective the analyst, it would help us model the FY25 production level. So if you can share from your side, we can work with a more informed way of estimating the FY25 productions.

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : Sure. Just last question was on the write-off that we have taken in the Australia coal block. Could you give us more color, what does it pertain to and what is our plan for the Australian asset from here on?

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : And is this likely to be become operational again in FY25 or it could take longer?

Question: Kirtan Mehta - BOB Capital Markets Ltd. - Analyst : Thank you. Thanks for this clarification.

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Hi, sir. Thanks for the opportunity. The first question is on consumption basis, what was the cost for coking coal and iron ore for this quarter?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Okay. Possible to give some details around iron ore sourcing strategy for the company right now and going forward?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : This is helpful. And can you please help me with the throughput for the two coal mines, which I believe have started, tonnage as well as potential cost savings?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Sir, would it be possible to quantify the throughput that we had in the quarter, just trying to get a sense on the cost savings that we would have benefited during the quarter?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Sure. Sir, how much did you say for Utkal C, I missed it?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : 0.9 million tonnes, okay. Sir, last question, I'll just squeeze in. Are we on schedule for HSM? Because I think BF, BOF, HSM was interlinked that is what was explained in the last call, I do understand that you do not want to share details pertaining to RINL sourcing. But are we confident on rolling out stuff from HSM, say, by Q3? Is there something on track?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Sure, Sir. This is very helpful. And then last one, the pellet plant, if you could help on the utilization levels and how should we look at the profitability, if at all over here?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : So this is helpful. Thank you so much.

Question: Pavas Pethia - Aditya Birla Mutual Funds - Analyst : Hi, sir. Just in terms of overall capex, what is left to be spent in the next few years for this INR31,000 crores? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2024 / 12:30PM, JNSP.NS - Full Year 2024 Jindal Steel And Power Ltd Earnings Call

Question: Pavas Pethia - Aditya Birla Mutual Funds - Analyst : And maintenance capex will be over and above this? Just for quantum?

Question: Pavas Pethia - Aditya Birla Mutual Funds - Analyst : What quantum annualized basis?

Question: Pavas Pethia - Aditya Birla Mutual Funds - Analyst : Okay. And just lastly on this Australian mine operation. If the mine remains shut, what is the cost we incur annually if there's no production?

Question: Pavas Pethia - Aditya Birla Mutual Funds - Analyst : Okay. But you said that INR360 crores was kind of losses from last year for Australian mines. So how is it supported?

Question: Pavas Pethia - Aditya Birla Mutual Funds - Analyst : Okay. So incrementally, no cash flow from Indian entity.

Question: Pavas Pethia - Aditya Birla Mutual Funds - Analyst : Okay. But any corporate guarantees which are kind of being supported from Indian balance sheet?

Question: Pavas Pethia - Aditya Birla Mutual Funds - Analyst : Thanks.

Question: Indrajit Agarwal - CLSA - Analyst : Hi, sir. Thank you for the opportunity. First, I want to understand about the NSR. So just to understand, you said NSR, how was the NSR this quarter versus last quarter?

Question: Indrajit Agarwal - CLSA - Analyst : So the percentage will also do. So quarter over quarter, how much was the move in NSR?

Question: Indrajit Agarwal - CLSA - Analyst : Okay. And was there any pellet sales? How much, if any, in this quarter?

Question: Indrajit Agarwal - CLSA - Analyst : The reason I'm asking is our calculated realization is actually showing an uptick quarter over quarter. So I just wanted to understand why is the disconnect?

Question: Amit Murarka - Axis Capital Limited - Analyst : Thanks for the opportunities. So similar question as the previous participant had. Like could you just help better understand this movement in revenue then because NSR is down, like what are the other factors which have offset that? And if you can give some color as to the number also?

Question: Amit Murarka - Axis Capital Limited - Analyst : Okay. Got it. So that's the larger part of the explanation is it?

Question: Amit Murarka - Axis Capital Limited - Analyst : Thank you very much.

Question: Rajesh Majumdar - Batlivala & Karani Securities India PVT. LTD. - Analyst : Good evening sir. Thanks for the opportunities. Sir, my first question was from April 1st till date, what is the quantum of price hike you've seen in

Question: Rajesh Majumdar - Batlivala & Karani Securities India PVT. LTD. - Analyst : Right. That's helpful. And my other question was on the tax rate, I guess you've seen the tax rate has gone up this quarter. So is that going to be from next year, do we assume that the company will pay the 25% plus kind of tax rate from next year or will it be certainly decrease on that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2024 / 12:30PM, JNSP.NS - Full Year 2024 Jindal Steel And Power Ltd Earnings Call

Question: Rajesh Majumdar - Batlivala & Karani Securities India PVT. LTD. - Analyst : Okay. And my last question is that while ramping up the hot strip volumes, do you expect any kind of cost increases in terms of marketing because of the new products we are trying to sell in the market, which will actually have a kind of impact on the EBITDA per tonne? Any kind of significant increase in marketing or other expenses which you envisage from this?

Question: Rajesh Majumdar - Batlivala & Karani Securities India PVT. LTD. - Analyst : Correct. That's fine. No, I know that. I was just wondering if there's going to be any kind of increase in the other expenses that we should kind of look at.

Question: Rajesh Majumdar - Batlivala & Karani Securities India PVT. LTD. - Analyst : Thank you so much.

Question: Ashish Jain - Macquarie Research - Analyst : Good evening, sir. Sir, my question again goes back to realization. I know you partly explained it, but I'm sure this will be a query with everybody. So is it possible to explain it on the call itself? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2024 / 12:30PM, JNSP.NS - Full Year 2024 Jindal Steel And Power Ltd Earnings Call

Question: Ashish Jain - Macquarie Research - Analyst : Yes. So just to clarify, so we should use the last quarter number 63,000, that's a key number and take a 5% decline on that ballpark? Or that has had some element of the supplies, that's the reason I'm asking.

Question: Ashish Jain - Macquarie Research - Analyst : Okay. And then the similar amount we should take out from the cost also? Because clearly, your cost also per tonne has gone up sequentially, I guess, for the same reason, it's getting booked on both side.

Question: Ashish Jain - Macquarie Research - Analyst : So INR12,500 EBITDA per tonne we are getting is that's a clean number, right? It's all business related, within that, right?

Question: Ashish Jain - Macquarie Research - Analyst : Okay. Got it. And secondly, my second question was on the coal mine ramp-up because I know you kind of earlier indicated that it's difficult to put a timeline. But can you give some indication because this was the first year where we have seen the coal mine ramping up? And also, can you give some indication of how the cost savings have come through at least backward-looking, you can give some clarity on that?

Question: Kamlesh Jain - Lotus Asset Managers - Analyst : Thanks for the opportunity. Sir, I had one question on the part of the presentation, on 24 Slide number. There was loss of around INR69 crores in the subsidiary in the EBITDA breach, which was let's say, INR 91 crores in the previous quarter. So was that loss more than this particular quarter?

Question: Kamlesh Jain - Lotus Asset Managers - Analyst : So there was a loss quarter on quarter of INR69 crores, which we have shown in Slide 24 of the presentation.

Question: Kamlesh Jain - Lotus Asset Managers - Analyst : But in last quarter, it was INR90 odd crores. INR91 crores of profit or I would say, in a presentation quarter on quarter in the previous quarter. And this quarter, it was INR69 crores loss. So like is it primarily on the operational side because as we have mentioned that in Australian operations, we don't have much of fixed overheads and all those things. But despite that, you had such a significant loss and quarter on quarter, if I see roughly around INR180 crores, INR170 crores of loss have come up in this particular quarter.

Question: Kamlesh Jain - Lotus Asset Managers - Analyst : Yeah. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2024 / 12:30PM, JNSP.NS - Full Year 2024 Jindal Steel And Power Ltd Earnings Call

Question: Kamlesh Jain - Lotus Asset Managers - Analyst : Yeah. But if I see from Q2, then it is roughly an INR170 crores.

Question: Kamlesh Jain - Lotus Asset Managers - Analyst : Yes. And lastly, on the project commissioning. I do believe I don't give the forward-looking statements for any guidance but even if I see all the project metrics like say on the electrification or civil work, there has not been significant movement quarter-over-quarter. And still, we are so confident on our guidance part that all the projects are on schedule. But honestly, like Q1 FY25 for slurry pipeline or Q2 FY25 for BOF looks very stressed. So how much incremental production or all that you are expecting? Because FY25 like we are going to see the growth and not much of capacity coming on in stream in India. So like even if we see last projects, like 8 million tonnes, that particular guidance also which we have achieved after 3 years of the earlier guidance, which we used to give around 5 years back, so what confidence do we have on these project timeline?

Question: Kamlesh Jain - Lotus Asset Managers - Analyst : Yes, sure, Sir. So if I go through your presentation, like say, the presentation Q4 FY25, there has not been much of the, let's say, move ahead on various distribute of your project. So how confident are we on these projects, given the fact that we are so much near to the product deadlines, or the timelines which we have guided. And there has been no needle movement or a significant change in the project scope. So how confident are we on these timelines of the project because Q1 FY25 for this slurry pipeline and given the fact that the elections are there, and this rainy period is going to start and our ground or the channel set suggest on that, that around 40% to 45% of the work on this slurry pipeline is still pending. And even on the blast furnace side, there are also not much significant changes there on plant work part or level of work which has happened over there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 13, 2024 / 12:30PM, JNSP.NS - Full Year 2024 Jindal Steel And Power Ltd Earnings Call

Question: Kamlesh Jain - Lotus Asset Managers - Analyst : Thank you.

Question: Parthiv Jhonsa - Anand Rathi Securities Private Limited - Analyst : Thanks for the opportunity. So just have a very basic question, considering recently all the steel prices, especially for the longs have been going up, how do you perceive the next two quarters to pan out?

Question: Parthiv Jhonsa - Anand Rathi Securities Private Limited - Analyst : Sir, is it possible to quantify any kind of movement, what you're seeing currently?

Question: Parthiv Jhonsa - Anand Rathi Securities Private Limited - Analyst : Thank you so much.

Question: Parthiv Jhonsa - Anand Rathi Securities Private Limited - Analyst : Thank you so much and thanks.

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Sir, my question is pertaining to power assets. I think we have 135 into 10 and another 250 to 270 megawatts of total power capacity. Just trying to understand what was the utilization levels in Q4 and if at all there was any external power sales? And if you could also help on the state of Monnet facility.

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : What are the timelines we are looking at over here? And what are the variables that we look at whether to sell surplus or basically take down the older utilities?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : And what are the variables because earlier we had indicated from an ESG angle of the station heat rate and lower fuel consumption. That was the reason why we were going ahead with ACPP-2. Do we still stand by the same? Or is there any change in thought process?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Sorry, just to continue, so what will be the extent of surplus that we are looking at? Is it like 3 units, 4 units of 135 megawatt. How should we understand that?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Sir, but from a mass balance standpoint, there should be a broad indication, right, once we go to 13 million tonnes, 14 million tonnes, there would be some quantum of surplus power, which would be there and probably you might look to dismantle the plant or you might look to sell out that particular asset? I'm trying to understand that as well.

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Okay. And just a continuation of my prior question. I think in one of the remarks, the management did indicate that they are looking at higher supplies from RINL. There was some emphasis on the word higher. I'm just trying to understand this and specifically in the context that I think RINL is only running one of the furnaces right now. And that also is in a bit of a problematic stage given some port-related strikes. How are we looking at approaching this particular scenario?

Question: Ritesh Shah - Investec Bank (UK) Plc - Analyst : Right. Sir, can you possibly give some numbers?

Question: Ashish Jain - Macquarie Research - Analyst : Yes, Sir, I just had 1 book-keeping question. What is the total volume of semis we have sold in '24?

Question: Ashish Jain - Macquarie Research - Analyst : Okay. So this will go to 0 in FY25, given we are hoping to operate HSM at more than 50%.

Question: Ashish Jain - Macquarie Research - Analyst : Yes. So that's a part of this 1.4 million tonnes, right?

Question: Ashish Jain - Macquarie Research - Analyst : Yeah. Got it.

Question: Ashish Jain - Macquarie Research - Analyst : Thank you.