Jindal Steel And Power Ltd Q1 2025 Earnings Call Transcript

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

Question: Amit Dixit - ICICI Securities Ltd - Analyst : Congratulations for a good performance. I have two questions. The first one is actually on the project completion status. Now, we don't have the presentation as yet with us. But going from the last presentation that you uploaded in the last earnings call, there were several capacities that were going to come in Q2 FY25, BOF2, BF2, etcetera. Now in your prepared remarks, you had mentioned that these have been delayed by a couple of quarters. And so my first question here is that when do we expect BOF3, etcetera, which were to come in Q4 FY25, when they will come up now? And Part B of question is on the coal mine. So what is the status of this coal mine, coal materialization? What kind of captive coal did we get in this quarter? So this is the first question essentially. And what caused this delay? If you could highlight broadly, that would be very helpful.

Question: Amit Dixit - ICICI Securities Ltd - Analyst : Okay. Sir, the second question is essentially on the sales volume. So if we look at it after a very long time, we have crossed 2 million tonnes in a quarter. Now if you could just highlight what would be the incremental volume that you would have got from hot strip mill, particularly if -- I mean, from the arrangement we have with RINL? That would be very helpful REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2024 / 12:30PM, JNSP.NS - Q1 2025 Jindal Steel And Power Ltd Earnings Call

Question: Amit Dixit - ICICI Securities Ltd - Analyst : How much did HSM do in this quarter, Q1 FY25?

Question: Amit Dixit - ICICI Securities Ltd - Analyst : Sorry, if I didn't hear you, can you please repeat

Question: Amit Dixit - ICICI Securities Ltd - Analyst : 450 kt. Okay. Fine. I'll get back in the queue.

Question: Sumangal Nevatia - Kotak Securities Ltd - Analyst : Yeah, good evening and thanks for the opportunity. Firstly, congratulations on a good set of numbers. Before the questions, I'll just request in future, if we can have some more time between the call and the results to better understand the results in the quarter call. My first question is again on completing what Amit was asking about the timeline. Now, last five to six quarters, we've been constantly pushing the timelines, delaying. So delays, and at the same time, communicating that we are building enough margin of safety, and we will commission within the updated timeline. So I just want to understand, I mean, how do we get confidence? And in case we are very sure about fourth quarter blast furnace to commissioning, is it possible to share some sort of volume guidance for FY25 that can come from this plant? That's my 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. JULY 24, 2024 / 12:30PM, JNSP.NS - Q1 2025 Jindal Steel And Power Ltd Earnings Call

Question: Sumangal Nevatia - Kotak Securities Ltd - Analyst : Understood. Is it possible to have some sort of a volume guidance for this year and next year, given the confidence of commissioning these projects now?

Question: Sumangal Nevatia - Kotak Securities Ltd - Analyst : Understood. Just last set of question. One is, any update on Utkal B1, B2 where is the approval process as of today. And in the opening remarks, there was some commentary on the cost and price movement that you're expecting for the second quarter? If you could just repeat 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. JULY 24, 2024 / 12:30PM, JNSP.NS - Q1 2025 Jindal Steel And Power Ltd Earnings Call

Question: Sumangal Nevatia - Kotak Securities Ltd - Analyst : Okay. And the guidance on the cost and prices for the next quarter?

Question: Sumangal Nevatia - Kotak Securities Ltd - Analyst : Understand. And iron ore and steel price?

Question: Sumangal Nevatia - Kotak Securities Ltd - Analyst : Understood. All right. Thank you. I'll come back in the queue. I thank you and all the best.

Question: Kirtan Mehta - BOB Capital Markets Ltd - Analyst : Thank you, sir, for the opportunity. Just in terms of the project targets, would you also highlight the timelines for the other components like pellet plant to DRI to CRM complex and plate mill, which were also targeted in the second half of the year? Would there be a shift in those as well?

Question: Kirtan Mehta - BOB Capital Markets Ltd - Analyst : Sure, will do that. In terms of the pellet plant, would you be able to sort of highlight the current run rate, pellet plant to that we had started earlier? What is the current run rate for the same?

Question: Kirtan Mehta - BOB Capital Markets Ltd - Analyst : Right, sir. And in terms of when we are targeting the BOF and BF2 by March, to deliver on that, what should we have been achieved by December so that we understand that will remain on track? Just to sort of give us an intermediate milestone to improve the confidence with the investors on delivery.

Question: Kirtan Mehta - BOB Capital Markets Ltd - Analyst : I understood about the pellet plant. I was asking with reference to the BF2 and BOF2, which we are targeting by March '25, the commissioning. What would be target and achieved by December to remain on track for March '25 commissioning? Would you be able to share some intermediate milestones?

Question: Kirtan Mehta - BOB Capital Markets Ltd - Analyst : Sure. Any update on the RINL and MoUs, how the progress has been? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2024 / 12:30PM, JNSP.NS - Q1 2025 Jindal Steel And Power Ltd Earnings Call

Question: Kirtan Mehta - BOB Capital Markets Ltd - Analyst : Thank you so much.

Question: Ritesh Shah - Investec - Analyst : Yeah, hi, sir. Thanks for the opportunity. A couple of questions. Sir, first, is it possible to quantify the average consumption cost for both iron ore as well as coking coal in the quarter?

Question: Ritesh Shah - Investec - Analyst : I just wanted to understand the economics of Kasia and Tensa mines.

Question: Ritesh Shah - Investec - Analyst : So let me put it the other way around, the blended iron ore costing for us, is it lower than what you would have secured from procuring via NMDC?

Question: Ritesh Shah - Investec - Analyst : Just trying to appreciate what you're doing, that's why asking this question. That's fine. My second question is on RINL. Would it be possible for you to source the volume and value?

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : Yes, thanks for the opportunity. Sir, two quick questions. One, is it possible to share how much CapEx we have already done out of this INR31,000 crores? And secondly, in Utkal B1, I think we were trying to increase our approval from 3.4 million to 5 million tonnes, where we are? And in coking coal, you mentioned that in first quarter, how much cost we have already witnessed down. Second quarter, I know, $30, $35, but in first quarter, how much coking coal price was down quarter on quarter?

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : Okay. And so regarding Utkal B1 and coking coal price?

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : Yes, Utkal C.

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : Sure. So in the next two, three months, we are expecting Utkal B1 to start and capacity increase in Utkal C? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2024 / 12:30PM, JNSP.NS - Q1 2025 Jindal Steel And Power Ltd Earnings Call

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : Thanks. And sir, lastly, about coking coal, Q1, how much down it was?

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : $23, you said, no?

Question: Ashish Kejriwal - Nuvama Institutional Equities - Analyst : That's great. Thank you. And all the best for future.

Question: Vikash Singh - Phillip Capital India Pvt. Ltd - Analyst : Good evening, sir. My first question pertains to our volumes, given we didn't get much of the RINL, and that is due I know that we don't give the volume guidance, but at least, are we confident to maintain at least that 2 million tonnes plus run rate going forward? Or there is an ambiguity there as well?

Question: Vikash Singh - Phillip Capital India Pvt. Ltd - Analyst : So at least 2 million-plus tonnes per quarter, we would be able to maintain and RINL would be over and above that?

Question: Vikash Singh - Phillip Capital India Pvt. Ltd - Analyst : Understood, sir. Sir, secondly, I know the other critical percent got delayed because of the lame terms of project. But I just wanted to understand this slurry pipeline, which was relatively easier task than the blast furnace and have a very good impact on our total per tonnene cost savings? That was supposed to come in 1Q, which hasn't come. So any time it's a specific reason on timeline by when we can have that?

Question: Vikash Singh - Phillip Capital India Pvt. Ltd - Analyst : Understood, sir. That's all from my side. And just a request that just to have some more time before the results and call.

Question: Kamlesh Jain - Lotus Asset Managers - Analyst : Yes, thanks for the opportunity. So just one question on the part of the realizations. You have mentioned about the cost reduction. So how -- what change we are expecting in the realization quarter on quarter?

Question: Kamlesh Jain - Lotus Asset Managers - Analyst : Okay. And sir, on the part of our BOF3 and DRI-2? So let's say, is entire ordering being done because no doubt, it has been delayed, but it is getting delayed like say quarter after quarter? And like say, last, in the November 2023, we had that revision than we, let's say, got back to the earlier schedule. So on this particular DRI-2 and BOF3, so like on that part, how much ordering has been done? Or what is the pending part there?

Question: Kamlesh Jain - Lotus Asset Managers - Analyst : Okay. And Q1 FY26 is the timeline for your coke oven and other auxiliary facilities. So then the production or the utilization of the BOFI -- BOF and BF. So that can take roughly around six months of time from the production rate like that is Q4 FY25. So the production or the utilization in the first year of the production, can be at around 50%-odd? Can we assume that?

Question: Rajesh Majumdar - B&K Securities Ltd - Analyst : Yeah, hi, and thanks for the opportunity. Sir, I had a question on the project cost also. You mentioned that there is going to be a little bit of a delay in terms of the project execution. But how about the cost? Is there going to be an escalation with cost as well? That was my 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. JULY 24, 2024 / 12:30PM, JNSP.NS - Q1 2025 Jindal Steel And Power Ltd Earnings Call

Question: Rajesh Majumdar - B&K Securities Ltd - Analyst : Okay. So it's only a time overrun due to some labor delays, etcetera, or any cost over. Is that correct?

Question: Rajesh Majumdar - B&K Securities Ltd - Analyst : I've not been able to see the PPT yet, but what is the debt now and what is the debt that we envisaged after the project completion?

Question: Rajesh Majumdar - B&K Securities Ltd - Analyst : What is the aggregate amount of debt -- the absolute amount?

Question: Rajesh Majumdar - B&K Securities Ltd - Analyst : Right, that's helpful. And my second question was, sir, you mentioned just a 1% drop in the NSR so far, you've seen but the market trends are showing a much more significant drop. So how confident are we that the drop is going to be just 1% and not more than that for the quarter? Because it's also a lean season for the construction activity. So could it be that the drop in the NSR is sharper than 1% in what you envisage? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2024 / 12:30PM, JNSP.NS - Q1 2025 Jindal Steel And Power Ltd Earnings Call

Question: Rajesh Majumdar - B&K Securities Ltd - Analyst : Okay. That's useful. And sir, one last question, if I can squeeze in. Is that what was the exports for the quarter? And where do you see the trend for that going forward?

Question: Rajesh Majumdar - B&K Securities Ltd - Analyst : So because the quotas, etcetera, have already been announced for the year. So you will have a fair idea of how much can the exports be for this year, right? That's why.

Question: Rajesh Majumdar - B&K Securities Ltd - Analyst : And the export NSR, sir? Last question.

Question: Raashi Chopra - Citi - Analyst : Thank you. Just my first question back on realization. To be clear, you mentioned there was a 1% decline that you witnessed in this quarter one or there's a 1% decline that we will witness in quarter two versus quarter one?

Question: Raashi Chopra - Citi - Analyst : Okay, that's clear. Secondly, on the volume side. So is it safe to assume that the RINL issues are not yet resolved?

Question: Raashi Chopra - Citi - Analyst : So the increase that you've seen in the HSM in this quarter, have you had to cut compromise on the long side or there was adequate material? Unidentified Corporate Participant So we always mentioned that we have about 1 million tonnes of semis that is waiting to be converted into finished products. Because of the imbalances in our finishing lines, this was being sold as semis. So now that imbalance is taken care of. So we are now converting our existing semi into finished steel. And also one of the reasons where you see improvement in our NSRs compared to the industry standards because our product mix is improving quarter on quarter.

Question: Raashi Chopra - Citi - Analyst : And so that EC will increase in the next couple of months and Utkal B1 will also start in the next couple of months? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2024 / 12:30PM, JNSP.NS - Q1 2025 Jindal Steel And Power Ltd Earnings Call

Question: Raashi Chopra - Citi - Analyst : And sir, B1, B2 combine with 8 million tonnes. So is B1 is permanent or is there a -- Unidentified Corporate Participant B1 is 5.5 million tonnes, B2 is 2.5 million tonnes. We are planning to increase the EC limits for Gare Palma IV/6 and as well as Utkal C to 5 million tonne each. So as Pankaj sir mentioned, we are targeting to do it as soon as possible.

Question: Raashi Chopra - Citi - Analyst : Okay. And 5.5 million of Utkal B1 should start sometime, right?

Question: Amit Murarka - Axis capital Ltd - Analyst : Yes, I am thankful for the opportunities. My question is on product mix. So you mentioned that you did 0.45 million tonnes of HRC in this quarter. So did all of that come from a shift from semis to HRC or was there some reduction in some other products also?

Question: Amit Murarka - Axis capital Ltd - Analyst : Sure. Also, I mean, I frankly couldn't understand it fully in the -- I think one of the earlier questions, you explained why there's only a 1% drop in realization versus what we are seeing at least and the market pricing that you see? Could you just please explain that one more time?

Question: Amit Murarka - Axis capital Ltd - Analyst : No. I understand you don't want to give guidance, but just trying to understand because the pricing that we see at least at our end, showing a decent enough fall even for HRC. And for rebar, it's a bigger fall. So that 1% number is something that was looking lower in that context.

Question: Amit Murarka - Axis capital Ltd - Analyst : Well, thanks a lot.

Question: Parthiv Jhonsa - Anand Rathi Financial Services Ltd - Analyst : Thank you for the opportunity. Just to get some clarity on the mines. I believe that you are enhancing the EC at multiple mines. So can you quantify what would be the output for FY25, as far as the coal is concerned?

Question: Parthiv Jhonsa - Anand Rathi Financial Services Ltd - Analyst : So this would be the --

Question: Parthiv Jhonsa - Anand Rathi Financial Services Ltd - Analyst : All right. Also one very quick question on the ASP. I believe -- is my understanding correct that you pointed out that in the first quarter, the ASP increased by 1% compared to the previous quarter?

Question: Parthiv Jhonsa - Anand Rathi Financial Services Ltd - Analyst : But if I just put it on a very quick calculation on a consol basis, you did about INR13,600-odd crores with a 2.09 million tonne kind of a number, it works out to a bit lower than INR67,000-odd crores what you did in the fourth quarter. If my understanding -- there has been some mismatch out here?

Question: Parthiv Jhonsa - Anand Rathi Financial Services Ltd - Analyst : Okay. Perfect. That clears a lot of confusion. Thank you.

Question: Rahul Gupta - Morgan Stanley - Analyst : Hi. Thank you for taking my questions. So just to understand and clear confusion around how the steel prices are moving vis-a-vis what you are seeing for your products. Can you just help us understand what share of products would be -- or what share of volumes would be contract-based volumes, which are more than three months? So basically, what is the share of contracts which are more than three months?

Question: Rahul Gupta - Morgan Stanley - Analyst : So that's very helpful. Just -- we are just trying to understand where is the delta. Are you implying that prices for value-added products have not moderated as sharply as we are seeing for plain vanilla products?

Question: Rahul Gupta - Morgan Stanley - Analyst : Got it. That's helpful. If I can squeeze in. Just want to understand separately your subsidiaries numbers have been quite volatile. So how should we read what's happening over there? Is there any update on what's happening in Australia? Or how should we model these numbers going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2024 / 12:30PM, JNSP.NS - Q1 2025 Jindal Steel And Power Ltd Earnings Call

Question: Nirbhay Mahawar - N Square Capital - Analyst : Thanks for the opportunity, sir. I wanted to have your medium-term outlook for steel market, how do you see as India turned from net exporter to a net importer now and we have got significant capacity addition in the domestic front. So I am not looking for any guidance, but how do you see this environment over the next one to two years?

Question: Nirbhay Mahawar - N Square Capital - Analyst : Sure. So would it be fair to assume that domestic demand only will be the driver and we would be probably largely moving away from the export market as an industry?