Half Year 2025 Jindal Steel And Power Ltd Earnings Call Transcript

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

Question: Amit Dikshit - ICICI Securities Limited - Analyst : Yeah. Hi, good evening everyone. And thanks for the opportunity and congratulations for a good performance in a very testing quarter. I have two questions. The first one is related to the DRI second plant, which appears to have been delayed to Q4 FY27 from Q3 FY26 if I look at your presentation. So just wanted to know the reason for the same. And wouldn't it impact your metal capacity or -- and finally the steel capacity?

Question: Amit Dikshit - ICICI Securities Limited - Analyst : No, sir, my question is that since the DRI is delayed, your availability of metallic would get delayed. So won't it impact our crude steel capacity reaching 15.75 million tonnes per annum by end of FY26 because it is delayed to Q4 FY27, which is a very significant delay from the earlier Q3 FY26?

Question: Amit Dikshit - ICICI Securities Limited - Analyst : So there is no delay...

Question: Amit Dikshit - ICICI Securities Limited - Analyst : Okay. So essentially, the timelines are unchanged. That's a good relief.

Question: Amit Dikshit - ICICI Securities Limited - Analyst : Okay. The second question pertains to the captive coal mine, if you can highlight the quantity of coal that was supplied in this quarter? And what is the ramp-up flow commissioning schedule of the mine?

Question: Amit Dikshit - ICICI Securities Limited - Analyst : Okay. So when can we expect all these mines to get opened? And is there any testing permit that remains at this point in time?

Question: Amit Dikshit - ICICI Securities Limited - Analyst : Okay, sir. That's great. Thank you and all the best.

Question: Amit Murarka - Axis Capital Limited - Analyst : Thanks for the opportunity. Just following up on the question on the coal mines. I think it was also kind of expected that the EC will be increased for Gare Palma and Utkal C. Any update on that?

Question: Amit Murarka - Axis Capital Limited - Analyst : Sure, sir. That's very reassuring. And also on the slurry pipeline, I believe it's due in Q4 FY25. So that's also on track, right?

Question: Amit Murarka - Axis Capital Limited - Analyst : Sure. Sir, also to understand it right in terms of the cost reduction or margin expansion projects now, I mean that will be the key project going ahead, right, incrementally speaking?

Question: Amit Murarka - Axis Capital Limited - Analyst : And could you just maybe refresh the understanding once, like how much is the anticipated cost savings from once the slurry pipeline is in place?

Question: Amit Murarka - Axis Capital Limited - Analyst : Okay, sure. That's all. Then I'll come back in the queue.

Question: Indrajit Agarwal - CLSA Limited - Analyst : Hi. Thank you for the opportunity. A couple of questions. First, bookkeeping question. How were the NSRs this quarter versus last quarter? And how is the spot NSR versus a 2Q average?

Question: Indrajit Agarwal - CLSA Limited - Analyst : And what is the spot?

Question: Indrajit Agarwal - CLSA Limited - Analyst : That's clear. And what kind of iron ore inflation can we see in this quarter, in third quarter, broadly as things stand today?

Question: Indrajit Agarwal - CLSA Limited - Analyst : Lastly, can you help us understand the current HSM run rate? What is the current run rate?

Question: Jashandeep Singh Chadha - Nomura Securities Co. - Analyst : Handset. Can you just help us understand what is the current H SS M run rate at which it is running? Currently?

Question: Indrajit Agarwal - CLSA Limited - Analyst : And can you help us understand the progress rate? By end of fourth quarter, can we get to like 85% kind of utilization?

Question: Indrajit Agarwal - CLSA Limited - Analyst : Sure. Thank you.

Question: Parthiv Jhonsa - Anand Rathi Shares and Stock Brokers Limited - Analyst : Thanks for the opportunity. Congratulations on a good set of numbers. My first question is pertaining to debt. Debt has been consistently increasing over last couple of quarters. So any guidance on the reduction on that side because it is continuously increasing over the last few quarters.

Question: Parthiv Jhonsa - Anand Rathi Shares and Stock Brokers Limited - Analyst : Any number on the reduction, sir?

Question: Parthiv Jhonsa - Anand Rathi Shares and Stock Brokers Limited - Analyst : All right. And sir, my second question is on coal. Any guidance for the Q3, what kind of numbers can we perceive for coal?

Question: Parthiv Jhonsa - Anand Rathi Shares and Stock Brokers Limited - Analyst : All right. If I may, can I just squeeze in one more small question? It's pertaining to your Australian subsidiary. It is still consistently facing losses. So any color on that side of the business? When are you...

Question: Kirtan Mehta - BOB Capital Markets Limited - Analyst : We mentioned that we are comfortable about the coal availability for the year and we don't need to purchase the external coal. I believe we are operating our existing Syngas plant at around 50% capacity. Would we be able to ramp that up to 100% with the now domestic coal availability? And will that improve the availability of metallics?

Question: Kirtan Mehta - BOB Capital Markets Limited - Analyst : That will not help us support the ramp-up at the HSM. HSM ramp-up will be more linked to the startup of blast furnace. Is that the right way to think?

Question: Kirtan Mehta - BOB Capital Markets Limited - Analyst : Right. And second question was on the slurry pipeline. I believe you were facing certain ROE-related issues, which has resulted into sort of delay in commissioning of the slurry pipeline. Could you highlight the sort of the -- how much ROE is available at this point in time? And are those issues behind us now?

Question: Kirtan Mehta - BOB Capital Markets Limited - Analyst : In terms of the pipeline status, welding status, would you be able to indicate some sort of the physical progress on the slurry pipeline as well?

Question: Pallav Agarwal - Antique Stockbroking - Analyst : Sir, just I had a question on our remaining CapEx. So I think our total growth CapEx was about INR 31,000 crores, and we've already spent close to INR 20,500 crores. So normally, we do have some performance guarantee-related payouts that are deferred. So is it right to understand that the balance, at least 10%, 15% of the balance amount would probably happen over the next couple of years and not immediately?

Question: Pallav Agarwal - Antique Stockbroking - Analyst : And what will be the maintenance CapEx, sir? This is a part of the growth CapEx.

Question: Pallav Agarwal - Antique Stockbroking - Analyst : Okay. So about INR2,500 crores on an annual basis. Okay.

Question: Pallav Agarwal - Antique Stockbroking - Analyst : Yeah. Sir, also on the question related to metallics. So we had an arrangement with RINL, so is that -- could that be a source for metallics or we're not really getting too much metallics from there right now?

Question: Pallav Agarwal - Antique Stockbroking - Analyst : Sure, sir. Lastly, if you could just give your thoughts on a few reports of safeguard or anti-dumping duties being imposed? So is there actually truth to this or these are more of volume speculation that's happening in India? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 06, 2024 / NTS, JNSP.NS - Half Year 2025 Jindal Steel And Power Ltd Earnings Call

Question: Ritesh Shah - Investec Bank plc - Analyst : Sir, just correct me if I'm wrong, you indicated that the HSM utilization is at 40% right now. We expect it to go to 80%, hopefully, by end of the year. You also indicated currently, DRI is at 50% utilization. Are those variables correct, sir, to what I heard?

Question: Ritesh Shah - Investec Bank plc - Analyst : And the utilization -- yes, yes. Sir, so you're indicating CGP is at 50% utilization, the coal gasifier.

Question: Sumangal Nevatia - Kotak Securities - Analyst : My first question is on the two captive coal blocks. Utkal B1, we're expecting 4Q commercialization. Is it possible to share? Have we received all the approvals, the mining leases signed and if it's only execution on the ground which is happening now? And also if you could guide us with respect to Utkal B2 mine? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 06, 2024 / NTS, JNSP.NS - Half Year 2025 Jindal Steel And Power Ltd Earnings Call

Question: Sumangal Nevatia - Kotak Securities - Analyst : Okay. My second question is on...

Question: Sumangal Nevatia - Kotak Securities - Analyst : Sorry, I missed the last word, Vishal. What did you say, activities are at?

Question: Sumangal Nevatia - Kotak Securities - Analyst : Got it. I have one clarification on the subsidiary EBITDA, which is around INR180-odd crores. Is it possible to share what is coming from international business as a whole, all the few geographies and for Odisha subsidiary?

Question: Sumangal Nevatia - Kotak Securities - Analyst : Okay. And just one last clarification on the -- in the first half, is it possible to share what is a mix for thermal coal? How much is captive? How much is linkage? And how much is the e-auction?

Question: Satyadeep Jain - AMBIT Capital Private Limited - Analyst : First question, I wanted to ask on the power strategy. Recently, you signed an agreement mentioning...

Question: Satyadeep Jain - AMBIT Capital Private Limited - Analyst : Can you hear me now?

Question: Satyadeep Jain - AMBIT Capital Private Limited - Analyst : I'm not on my handset.

Question: Satyadeep Jain - AMBIT Capital Private Limited - Analyst : Is it better now?

Question: Satyadeep Jain - AMBIT Capital Private Limited - Analyst : I just wanted to ask on the power strategy. The group signed an agreement with Jindal Renewables for 3 gigawatt of RE. You also have 1,600-megawatt of CPP yourself, another 1,000 megawatts coming up. So how are you looking at the sourcing of power and all the capacities you have? That's the first question. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 06, 2024 / NTS, JNSP.NS - Half Year 2025 Jindal Steel And Power Ltd Earnings Call

Question: Satyadeep Jain - AMBIT Capital Private Limited - Analyst : Okay. Secondly, just on the capital allocation, as you look beyond Angul II, what -- do we assume that till Angul II commissions you would not look at further expansion? Or are you -- how do we look at growth beyond Angul II organic, inorganic? When do we see that where -- some thoughts on long and flat? Is there any -- is it too early to think about that?

Question: Raashi Chopra - Citigroup Inc. - Analyst : Just clarifying on some bookkeeping questions. You had mentioned the realization this quarter was INR54,600 and INR55,800 was in the last year or the last quarter.

Question: Raashi Chopra - Citigroup Inc. - Analyst : For 2Q and 1Q?

Question: Raashi Chopra - Citigroup Inc. - Analyst : So for yourself, what has been the change in the realization sequentially?

Question: Raashi Chopra - Citigroup Inc. - Analyst : For yourselves, what has been the change in realization sequentially? Because if I just divide by the revenue by volume, it appears that the realization has moved up sequentially.

Question: Raashi Chopra - Citigroup Inc. - Analyst : Stand-alone, yes.

Question: Raashi Chopra - Citigroup Inc. - Analyst : Okay. And the cost -- sorry, you're saying.

Question: Raashi Chopra - Citigroup Inc. - Analyst : Okay. So the decline is 3% on a sequential basis stand-alone.

Question: Raashi Chopra - Citigroup Inc. - Analyst : Okay. And on the cost side, it's flattish on a sequential basis.

Question: Raashi Chopra - Citigroup Inc. - Analyst : Okay. So the -- okay, so the decline in the coking coal as well as the iron ore has been offset by other expenses and lower volumes.

Question: Raashi Chopra - Citigroup Inc. - Analyst : And just on this cost side, coking who should be down by about $20, $25 more in the third quarter?

Question: Raashi Chopra - Citigroup Inc. - Analyst : And iron ore?

Question: Vikash Singh - PhillipCapital (India) Pvt. - Analyst : Sir, if I just look at the stand-alone minus the consol EBITDA, there is INR210 crores. Just wanted to understand this year's subsidiary is contributing that much of money because this number is pretty fluctuating on a quarter -- every quarter.

Question: Vikash Singh - PhillipCapital (India) Pvt. - Analyst : And how should we look at this number going forward?

Question: Vikash Singh - PhillipCapital (India) Pvt. - Analyst : Understood. My second question pertains to HSM. We basically -- you said that it has reached 40% of utilization level and further ramp-up is not possible unless the new blast furnace is commissioned. So in terms of the benefit from the low-grade semis to the finished steel, that benefit we have received so far. And if you could quantify that once the blast furnace come, how much more benefit could be derived from the HSM space?

Question: Vikash Singh - PhillipCapital (India) Pvt. - Analyst : And the operating leverage benefit, once that -- yes, sorry, please continue.

Question: Ashish Kejriwal - Nuvama Wealth Management. - Analyst : Sir, three quick questions. One, in coal mines, last quarter, we said that we are on the verge of expanding the existing EC limit of Utkal C and Gare Palma. Where we are on that? And second question is, do you -- have you said that -- we are running at a peak capacity utilization for our DRI plant at Angul? If that's the case, what is the overall capacity utilization at Angul in Q2? And third is, in terms of sales volume, last quarter also we mentioned that we will be selling more than 2 million tonne each quarter. And this quarter, though volumes have been down on production because they were shut down, but sales volume was lower than the production volume also. So are we taking -- are we getting any hit because of the logistics or some slowdown in demand? Or what could be the thing which can explain that?

Question: Ashish Kejriwal - Nuvama Wealth Management. - Analyst : My question was at what capacity utilization we are working with in Angul overall, 6 million tonnes, and sales volume in second quarter, why it is lower than the production volume also?

Question: Ashish Kejriwal - Nuvama Wealth Management. - Analyst : So is this the maximum which we can do or we can elevate it without any further addition in plant?

Question: Ashish Kejriwal - Nuvama Wealth Management. - Analyst : Okay. And, sir, about the sales volume?

Question: Ashish Kejriwal - Nuvama Wealth Management. - Analyst : We don't have much inventory or inventory level has not increased.

Question: Ashish Kejriwal - Nuvama Wealth Management. - Analyst : Okay. So -- okay, so is it possible for us to give a sales volume guidance for FY25?

Question: Rahul Gupta - Morgan Stanley - Analyst : I have just one question. Just trying to understand what has driven iron ore price hikes to the level where you say they are unsustainable. Maybe alternatively, what should drive them down, assuming global iron ore prices stay where they are? Just trying to understand if there is any structural issue with iron ore prices over here.

Question: Rahul Gupta - Morgan Stanley - Analyst : Got it. Just one bookkeeping question. What was the share of exports during the quarter?

Question: Rahul Gupta - Morgan Stanley - Analyst : And it was 7% last quarter, right?

Question: Parthiv Jhonsa - Anand Rathi Shares and Stock Brokers Limited - Analyst : Just a very quick question. What can be the tentative coking coal cost savings? Did I hear correct, it is about $20 to $25 in Q3?

Question: Parthiv Jhonsa - Anand Rathi Shares and Stock Brokers Limited - Analyst : Okay. And is it possible to give any guidance, sir, for FY25 volumes by any chance?

Question: Ritesh Shah - Investec Bank plc - Analyst : Quick ones. Sir, would it be possible for you to quantify how much was the external metallics purchase in first half? And is it a strategic decision not to purchase incremental metallics and wait for the furnace to come upstream?

Question: Ritesh Shah - Investec Bank plc - Analyst : Sure. And just quick two questions. Any update on railway logistics as we look to ramp up the capacities? How are we looking at outbound logistics? And specifically, if there's any update on Paradip Port? That's the first question. And second, any update on [ACPP I and II]? And we had plans to dismantle the older 13, 15-megawatt. Where are we 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. NOVEMBER 06, 2024 / NTS, JNSP.NS - Half Year 2025 Jindal Steel And Power Ltd Earnings Call

Question: Pratim Roy - Batlivala & Karani Securities India Pvt. - Analyst : I just want to clarify that you have mentioned in the earlier comment that this quarter, we are expecting INR1,000 to INR2,000 price hike. So if you quantify the number, how much extra delta in terms of NSR we can expect over -- in 3Q over 2Q, if you can give some number on that?

Question: Pratim Roy - Batlivala & Karani Securities India Pvt. - Analyst : So my question is on how much NSR improvement we can expect company level for 3Q over 2Q?

Question: Pavas Pethia - Birla Mutual Fund - Analyst : Just wanted to understand -- I know it's very difficult to guide for FY25 numbers. From a broader perspective, is FY27 will be a kind of a full ramp-up or FY28 will be a full ramp-up?

Question: Pavas Pethia - Birla Mutual Fund - Analyst : Okay, sure. And secondly, you are supposed to kind of balance our finish versus crude steel. There's still scope for 1.5 to 2 million tonnes of kind of finished steel capacity to come up. Have we finalized on that?

Question: Pavas Pethia - Birla Mutual Fund - Analyst : Sir, this full ramp-up, what does this translate to in terms of finished steel kind of a production?

Question: Prateek Singh - DAM Capital Advisors Limited - Analyst : Just wanted to clarify. When you first said that there is a price hike of INR1,000 to INR2,000, that is post the quarter end? Or are we calling for a higher -- this much higher ASP versus the 2Q average?

Question: Prateek Singh - DAM Capital Advisors Limited - Analyst : Understood, sir. So if you don't take any further price hikes that 3Q would largely be INR1,000 to INR2,000 per tonne higher than 2Q. That would be the correct understanding.