HEG — earnings call

The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.

Prepared remarks

Moderator · Conference Operator

Limited T: MR. M LIMIT MR. O FINAN MR. G OFFIC MR. N EQUIT Pa Q1 FY- Aug MANISH G TED OM PRAK NCIAL OF GULSHAN CER, HEG NAVIN AG TIES, SKP age 1 of 17 -21 Earn ust 17, GULATI – KASH AJM FFICER, H N KUMAR G LIMITE GRAWAL P SECURI nings C – EXECUT MERA – G HEG LIM R SAKHUJ ED – HEAD I ITIES onferen TIVE DIRE ROUP CH MITED A – CHIE INSTITUT nce Call” ECTOR, H HIEF EF FINANC TIONAL ” HEG CIAL Moderato Navin Ag Manish G or: grawal:

Gulati

Ladies an Conferenc will be an need assis on your to hand the c Thank you Good afte pleasure leadership HEG Lim Gulshan K by a ques you.

Good afte aware we have give including work from facilities.

Now you been serio China due forecast t recovery includes C China, I m demand.

The elect country in resulting geopolitic which wa consumpt Our result facility wa to contend Pa nd gentlemen, ce Call.

As a re n opportunity f stance during th ouchtone phone conference over u and over to yo ernoon ladies an and privilege p team at HEG mited along wit Kumar Sakhuja stion-and-answe ernoon, friends are going throu n top priority to social distancin m home etc. th see steel is clo ously impacted e to the COVID that in the curr in 2021 will be China.

In last o mean in the re tric arc furnace n regions like from slowdow cal tensions in s as supposed to g ion. ts in the April t as shut down fo d with.

Therefo age 2 of 17 good day and eminder all par for you to ask q he conference c e.

Please note r to Mr. Navin ou, Mr. Agrawa nd gentlemen. to welcome y Limited.

We h th his colleagu a – CFO.

We w er session.

Ove and welcome t ugh COVID pa o the safety of ng, use of mas he result of tha osely linked to in almost all th D crisis.

The W rrent year 2020 e to the extent one-year the st est of the worl e steel product Europe, US, J wn in demand some parts of th get over by the to June quarter or almost a mo fore, our capaci d welcome to rticipant lines w questions after call, please sign that this confer Agrawal – Hea al. On behalf of a ou to this fina have with us Mr ues Mr. Om P ill have the ope er to you Mr. G to our Q1 finan andemic which our employees ks, sanitizing, e at has been that o the GDP grow he major steel World Steel Asso 0 the world ste of about 3.8% teel production ld which is ha tion was down Japan, Russia, d, trade tension he world.

The G e start of this y were impacted nth.

Besides th ity utilization w the HEG Lim will be in the li the presentatio nal an operator rence is being ad Institutional ll of us at SKP ancial results c r.

Manish Gulat rakash Ajmera ening remarks f Gulati for your ncial result FY2 is impacting m and put stringe extensive use o t there had bee wth of every co producing coun ociation in its r eel demand wi % and this short has dropped b ving an impac n in some of t Turkey beside ns between U Graphite Electr ear has got furt due to lower sa at, there was a was around 50% HEG August mited Q1 FY21 isten-only mode on concludes.

S by pressing “* recorded.

I wo Equities, SKP P Securities, it i conference cal ati – Executive a – Group CFO from Mr. Gulat r opening rema 2021 con-call. most of the busin ent controls in w of online intera en hardly any c ountry.

Steel d ntries of the wo recent short ran ill contract by t range forecas by almost 25% ct on Graphite the large steel es India which US and China rode inventory rther delay due ales as our man lot of logistics % for Q1. Sinc G Limited 17, 2020 1 Earnings e and there Should you *” then “0” ould like to Securities. is my great ll with the Director of O and Mr. ti, followed arks.

Thank As you are nesses.

We workplaces actions, and case at our demand has orld except nge outlook 6.4% and t of course % excluding Electrodes producing h is mainly and other adjustment to reduced nufacturing challenges ce the past Gulshan S

Sakhuja

year, the market co we expect hopefully Coming to needle cok prices.

W countries graphite e with majo domestic Electric ar say, 15-20 steelmakin considerat etc. So w decades o Indian cu COVID cr With this, financial n happy to a Thank yo company' ended Jun the previo EBITDA, crores in t of Rs.

11 In compli 2020, the operations the quarte 2020 hav liquidity p and equip receivable expects to Pa electrode price onditions.

We e t the resurgence and the remain o needle coke; ke have also co We have always which helps u electrode deman or steel compan and export mar rc furnace prod 0 years.

And w ng due to it tions, mining re we are very mu of experience in ustomers.

We h risis and ensure , I would now numbers.

And t answer any que ou.

Thank you, s performance ne 2020, HEG r ous quarter and including othe the correspondi crores in Q1 FY iance of lockdo company tem s from 23rd Apr er, the company e been adverse position and rec pment, intangib es.

Based on t o recover the ca age 3 of 17 es have been se expect the pricin e in demand fro ning graphite el the needle cok ome down, alth been exportin s in diversifyin nd dropping by nies increasing t rkets going forw duction has seen we expect this ts inherent a estrictions, low uch optimistic a n business, we have taken sig e the strength an hand over the then I, along w eries that you m sir.

Good afte was affected d registered reven d Rs.

817 Cr i er income, stoo ing quarter of th Y21. own instruction mporarily suspen ril, 2020.

Since y's operations a ely impacted. coverability and ble assets, righ the current ind arrying amount equentially drop ng to remain un om 2021 onwar ectrode invento ke availability h hough they are s g about two-th ng the market r y about 50% in their production ward into the ne n an approxima to continue as dvantages ove w carbon emissi about the elect expect to be a gnificant measu nd safety of our floor to our CF ith our Group C may have.

Over t ernoon, ladies due to lower vo nue from operat n the correspon od at only Rs. he last financial ns issued by th nded the opera e the lockdown and the financia The company d carrying valu ht-of-use of as dicators of futu of these assets. pping quarter a nder pressure fo rds once the im ories get consum has eased substa still not in line hirds of our pro risks.

While we n April to June, n.

We see a grad ext quarter. ately 3% CAGR s EAF become er blast furna ons, low capita tric arc furnace supplier of cho ures to manag r workforce and FO, Gulshan, to CFO, Shri O.

P to you, Gulshan and gentlemen olumes and rea tions of Rs.

233 nding quarter o 35 crores in Q l year.

The com he Government ations of the co n was in force f al results for th has made a d e of its assets c ssets, investme ure economic HEG August after quarter to or next 2- 3 qua mpact of COVID med. tantially, and th with the curren oduction to mo e have seen th , it is now set adual improvem R over a long t es the preferred aces like env al costs, ease of e industry.

Wit oice to all our ge our operatio d team member o take you thro P.

Ajmera, we w n. n.

During the q alizations.

For 3 Cr and Rs.

37 of the last fina Q1 FY21 versu mpany reported t of India on M ompany and re for a significan he quarter ended detailed assessm comprising prop ents, inventory conditions, the G Limited 17, 2020 reflect the arters.

And D subsides, he prices of nt electrode ore than 30 e domestic to improve ment both in erm of late d choice of vironmental f operation, th our four global and ons in this rs. ough all the will be very quarter, the the quarter 74 crores in ancial year. us Rs.

387 a net profit March 23rd, esumed the nt period of d 30th June ment of its perty, plant and trade e company Moderato Sanchit G Gulshan S Sanchit G Gulshan S Sanchit G Manish G Sanchit G or:

Gupta

Presently, However, resources conserve 1,280 cror The comp working control sy policies an We would you.

Thank you is from th I just wan Whatever realizable Financial And what inventory NRV dep same, then the prices picture.

And one m purchase a after 2-3 m a past con No, we do one of the quantities there's no And what purchase customer?

Pa , it is very early the company and also imple cash.

The comp res, yielding an pany has not op capital facilitie ystem.

The com nd procedures t d now like to a u very much.

W e line of Sanch nt to ask this que the inventory l value that wa Year, the impa t do you think in loss because ne ends upon the n we don't fore s come down v more thing, do after this quarte months when y ntract with need o not have any e main grades, w of the grades past contract a t about the grap or you will be ? age 4 of 17 y to assess the f is operating its emented the str pany is a long- n average return pted for the op es.

The compa mpany is having to adapt with a address any qu We will now be hit Gupta from I estion that in Q loss that we ha as prevailing a act was very ins n the future mi eedle coke pric selling price.

I esee any furthe versus our cost you have any c er, I think you h ou'll order need dle coke manufa remaining cont we have invent which we need as such.

They're phite electrode e having new c future impact of s business by o ingent cost-con -term debt-free n of approximat ption provided any has an ad g a mechanism dynamic enviro uestions or quer egin the questio ICICI Bank.

Quarter 1 we hav ave taken in the at that point o ignificant. ght have been c es are going do In case if the c r hit to our pro t of production contract with ne have inventory dle coke, you w acturer? tract with needl ory provision u d, which is bei all over. es?

Do you hav contract?

What f COVID-19 w optimal utilizat ntrol measures a and having a tr ely 7% per ann RBI on deferre equate internal m to continuousl onment. ries you may h on and answer s ven't taken any e last financial y of time.

In the current next qua own continuousl current selling p ofitability on ac n, then the NRV eedle coke that of 6 months as will order on ma le coke manufa up to December ng done at mar ve a contract w t is arrangemen HEG August with a reasonabl tion of availabl across the orga treasury size of num. ed payment of l financial rep ly review and have in your m session.

The fir inventory loss, year was based e first quarter arter?

Do you f sly? price continues ccount of NRV V impact com t suppose you a s I understand, arket price or d acturers.

Whatev r.

And we are b arket prices of t with the graphit nt between you G Limited 17, 2020 e certainty. le financial anization to f nearly Rs. interest on porting and monitor its ind.

Thank rst question is it? d on the net of Current foresee any s to remain .

In case if es into the are going to so suppose o you have ver like for uying little today.

And e electrode u and your Manish G Sanchit G Manish G Sanchit G Manish G Sanchit G Manish G Sanchit G Manish G Sanchit G Manish G

Gulati

Everybod So everyt time.

We We are al we with o So the pri Yes, they be in this being ther down in a And one months fr Sorry, I di GE price, Yes, true.

So do you This COV data, in fa see the im 32%; Jap Spain, 35% So this st crisis.

So of course develops.

And like n you see th increase, going forw No, the pr reason tha natural gr which is e they are ta Pa y, if I would sa thing has becom are buying need lso buying 3 m our customers no ce of needle co should match. s business.

If th re.

So eventual a way that toll p more question om January onw idn't get the que graphite electro u see same level VID thing has on act, I have it in mpact which has an, down 21% %; Canada, 17% teel production once the impac e, a pent-up de needle coke is he impact of th so demand of n ward after 1 or rime usage of n at lithium anod raphite, they ha eventually viabl alking about sil age 5 of 17 ay, we do not ha me quite short dle coke, whate months at a time or the coke sup oke and graphite Eventually, the he companies ally, they have provide sufficien n, like GE elec wards. estion. ode price have l of price in com nly complicate front of me, I c s been made.

Y %; United State %; France, 36% as well as con ct subsides, I m emand.

But ev used for both g his needle coke needle coke the 2 years? needle coke wi de has many o ave all kinds o le.

And who kn licon.

So this is ave any signific term.

Like, cu ever little qualit e.

So there are n ppliers have suc e will match in ey have to matc cannot make s to settle down nt spreads and f ctrode price ha come down sig ming months or d the situation. can just tell you You see now In es, down 32%; %.

So I mean th nsumption has mean, we expec verybody is wa graphite electro e on lithium io ere will also inc ill eventually re other options.

T of things.

So th nows, lithium b a field which i cant contract las ustomers are al ty we need of so no binding con h agreements w coming months ch.

Otherwise, sufficient margi n.

The needle c for the business as come down gnificantly in th r it will improve If you look at t u some of the na dia was down, South Korea, hese are all large taken a big hit ct resurgence in atching careful de and lithium on because as e crease.

So do y emain graphite They have mes he battery will attery, how lon s in such a rapi HEG August sting more than lso buying 3 m ome grade here ntracts either wa with us. s? there will be n ins, then there coke prices hav s to remain prof n significantly he last 6 months e going forward the world steel names of the cou the production , 10.5%; Germ e historic data i t because of th n demand becau lly on how th ion batteries.

S electric-vehicle you see any pric electrodes for sosphere pitch, be made from ng will it last be id development G Limited 17, 2020 n 3 months. months at a e and there. ay.

Neither o reason to 's no point ve to settle fitable. in last 4-5 s. d? production untries that n was down many, 18%; is all there. his COVID use there's, he situation So what do e users will ce increase the simple they have m a product ecause now t, so there'll Moderato Dewang S Manish G Dewang S Manish G Dewang S Manish G or:

be this ta developm battery is always be coke will vehicle m the 35% o battery.

S options an they have needle cok Next ques My first q also and customers Surely by we have t sucked in infrastruct situation c that recov Mid-21 ce Yes.

Are we d lakh tons, The expan what we h excavation And we a and just b at the man And we're had just st much of coming o Pa ape come from ment.

And of co going to come e made from n mainly be used market is very-v of the cost a lith o they will try nd improvising found.

But for ke. stion is from De question is reg maybe some s' end?

Somewh mid next year to see the long- n by most gov ture projects.

S clearer.

But sur very to improve ertainly? elaying our exp what we are cu nsion, I should have is that we ns, etc. We sto lso took a break eing sure.

For t nufacturer, som e just looking fo topped because risk inside the nly for expans age 6 of 17 m probably a c ourse, the futur from, which m needle coke and d by the graphit very price sensi hium vehicle is y to keep price and maybe ens r steel, it will al ewang Sanghav arding the dem part of CY21 here in mid nex r.

I'm hoping th -term damage, vernments, we So a lot remain rely, if normalc from 2021 onw pansion or we urrently underg d make this cle have the 1,000 opped them; of k from that.

We the expansion, t me of them are a or the right opp e of this COVID e plant where w sion.

So our pl cassette to a p re is with elec materials it will b d for steel, ther te industry.

As itive.

So they a s the battery itse s down for the sure you have se lways be electro vi from ICICI S mand perspectiv also, when d xt year or maybe hat it starts in th which is being e'll see how m ns to be seen.

A y or even a sem wards.

Hopefull are kind of wi going? ar that the exp 0 people coming course, migran e said, there's n the long-leased already on the w portunity to rest D, we just stopp we already hav lan was to com pen drive.

So ctric vehicles.

B be made from? re's no substitu the prices will g are going to wa elf.

There's not e battery.

So th ettled down at t odes and for ele ecurities. ve.

While we h do we expect e a bit more del he beginning of g caused by CO many people w And the next tw mblance of norm ly early but sure th our normal s ansion is certai g inside the pre nt labor also we no harm in just equipments are way, so we will tart the civil wo ped for the time ve 1,500 peopl me with comme HEG August this technolog But where eve So graphite ele ute to graphite. go up, the lithiu atch every penn thing to use oth hey will keep l the perfect mat ectrodes, it will have a muted s restocking to layed for that? f 2021 itself.

B OVID.

The mon will announce wo quarters wil malcy resumes, ely by mid-21, schedule, the 8 ainly going to c emise to do the ent back to the delaying it by 4 re already order continue to rec ork at our plant e being, but no le inside and 1 ercial productio G Limited 17, 2020 y is under ntually the ectrode will So needle um electric ny because her than the looking for erial which l always be second half start from ut you see, ney getting big mega ll make the , we expect certainly.

80,000 to 1 come.

Now civil work, eir villages.

4-5 months red, already ceive them. t, which we t invite too 1,000 more on in early Dewang S Manish G Dewang S Manish G Dewang S Manish G Dewang S Manish G Dewang S Manish G

2022, mig be quick t already fa And the u I believe around 55 55% to 60 At the mo The produ look at on only beca customers demand o grade.

Th that mark segment o On a broa and needl had in at t '14-15, I c was in, if That's a lo They have in price '1 Right now system.

So you woul first get r continue t And what That, Gul it's Rs.

84 Pa ght be it will ge to start because actored.

That's a utilization, what that Q1 was c 5% or 60%.

I h 0%.

That's how oment they will uct will still con ne year back, th ause that we be s.

We didn't w of India is 60,0 his is not UHP. ket was quite e of business but w ader sense, the le coke pricing that particular ti can look at the I'm not mistake ong term '14-15 e to return.

See, 5-16 at $20,000 w, we are living o today, if we w d be making m rid of this ove to remain strong t was the net cas shan has said th 9 crores or Rs. age 7 of 17 et delayed by 4- e the time whic already ordered t we had in Q1 close to 50%.

Q hope that we can it seems. not be dumpin ntinue to come hey were comi ecame aggressi want to lose th 000 ton electro It's HP grade. eaten away by we still want to spread, that is that should su ime? past.

Yes, I thi en, was '15-16, 5 which I saw so , this is not norm 0 was also not g with an overh were to get need money.

You wo erbuying, which g. sh as on date? hat it's Rs.

1,28 850-odd crores -5 months.

It al ch was to be tak d. and what we ex Q2 is certainly n continue with g from China, r in, although at ng in large qua ive in pricing hem completely odes.

Out of th That is where China.

And al o keep our custo the difference stain at around ink '14-15 was I think it was in o I thought I'd j mal market con normal.

And w hang of invento dle coke at this ould be making h was done in 80 crores.

And i s.

Gulshan, plea l depends on th ken by the long xpect for the ba going to be be h that, but we s right, if I get tha a much-subdue antities.

So that because we wa y to Chinese. at 60,000, abou we compete w though we don omers. between the G FY14-15 kind not bad.

I think n '15-16.

It has ust ask the curr nditions.

What h what is happenin ory.

See once t price and sell e g decent, decen 2019 with the if you take out t ase correct me i HEG August he market condi g-lead equipme alance part of th etter than Q1 a should book he at right? ed level.

But if t has dropped. anted to keep Because India ut 25,000 tons with Chinese pr n't earn much GE pricing vers ds of level now k the worst spre to return to the rent price. happened was t ng now is also n that we flush it electrodes at tod nt profits.

But w e hope that m the working ca if I'm wrong.

G Limited 17, 2020 ition.

We'll ents, that is he year? and maybe re between we were to But that is our Indian a, for peak is the HP roducts.

So out of that sus furnace ?

What we ead we had e... the peaking not normal. t out of the day's price, we have to markets will apital loans, Gulshan S Dewang S Gulshan S Moderato Rahul Jai Manish G Rahul Jai Manish G Rahul Jai Manish G Rahul Jai Manish G

Sakhuja

or: in:

Gulati

in:

Yes.

Its co of Rs.432 books of a Rs.

1,280 Yes.

Next ques Just to und somewher happy wi electrodes I didn't ge Where, in No, no, I' with refra Yes, but t at $15,000 I was tal customers this contr policy, ha improves demand fr Now I get Yes, Graf Yes, beca is happy situation a take or pa a deal tom we'll be v some visi advantage Pa orrect, sir.

Its R crores as on 3 accounts.

The g crores and 849 stion is from Ra derstand that gl re that some of ith a leading s.

Can you share et the question n India or overse 'm talking abou actory with rega hat has now co 0, but I'm sure t king about the s where we also actual pricing w ave not been h in next two q rom some of the t your question. fTech long-term ause every time because with at that time and ay at $9,000 for morrow needle very scared to d ibility.

So now e over the first 2 age 8 of 17 Rs.

1,280 crores 30th June.

So yo gross cash is at 9 crores is the n ahul Jain from C lobal scenario w f this top globa producer of g e some details o clearly.

Who's eas? ut this oversea ards to the pricin ome down like a they're now hap e Graftech, wh o supply electro with electrode happy with the quarters or so, e customers wh .

You're basical m contract.

Yes, e you said GrafT this GrafTech, d forced the cust r 5 years.

So 5 y coke suppliers do it.

Because y w customers are 2 years when th s gross.

And w u can deduct th Rs.

1,280 crore et cash.

Credence Wealt with regards to al manufacturer graphite electro or shed some li s not happy?

Y s, the global ov ng of electrode anything.

They ppy. ho is a supplie odes to them.

A and the suppli suppliers.

I wa based on this here we can gai lly talking abou sir, GrafTech.

Tech, I heard g , what they di tomers to sign o years, I mean, n s come and ask you never know e badly stuck w hey've got suppl e are having wo he same and tha es. th Management other graphite p rs, some of the ode with regar ght on this?

You said some verseas custom s. were maybe no er of electrode Are some of the er not probably as trying to un lever, can we n market share? ut this GrafTech graphite.

So any d, because the off on their long nobody wants to k HEG to put o w, 5 years is wa with them, alth lies.

HEG August orking capital b at would be net t. producers, I bel customers hav rd to the prici customers are mers have not b ot happy when es to some of ese customers, y giving the rig nderstand, as th e expect some ? h long-term con yway, so yes, s ey took advant g-term contract o get stuck.

Eve our signature f ay too much tim hough they did G Limited 17, 2020 borrowings cash in our lieve I read ve not been ing of the not happy. been happy the price is the global because of ght pricing he situation additional ntract. ee, nobody tage of the ts, which is en if we get for 5 years, me to have d get some Moderato Bhavesh C Manish G Bhavesh C Manish G Gulshan S Manish G Moderato or:

or: But now correctly n customers we hear fr once cust come out customers Next ques I just wan compare?

You see th that point of course, electrodes According be?

Gulshan, market co lows.

So G I'm comin 20%-25% we had a is the defi determine years, it r spread wo I'll just ad highs of 7 that is fine kind of EB look at the down ever was unpre Next ques Pa with falling p noticed was tha s are going bac rom the market tomers free up, in the open ma s who signed up stion is from Bh nt to know the p he prices of tod in time, the ne , even the curre s are also higher g to you, sir, w do you want to ondition.

And r Gulshan, you w ng to that, sir.

I %.

And after tha sudden jump in inition of norma es your EBITDA ranges between ould determine t dd to what Guls 70s and the low e.

That is good BITDAs the ste e company's his ry few years, hi ecedented when stion is from Ra age 9 of 17 prices, they're at most of these ck to GrafTech t.

I don't have a , free themselv arket which can p are bound to e havesh Chauhan prices of graph day are still hig eedle coke price ent market pric r than the lowe what should be a o answer this? really if you ha want to answer t If you see 5-6 at, EBITDA has n the prices and alized.

It is a fa A because our n X to X delta. this normalized shan said.

See, t ws of 10s.

So I business.

I me eel companies h story for the las hitting the bottom n it went up to a ahul Jain from C very much up e contracts are and asking the any authentic in ves up from th n be catered to b execute those co n from IDBI Ca hite electrodes t gher than the lo es were also at ce of needle co st point. a normalized E I mean normal ave seen our EB this question? years back, we s fallen from 2 d we had EBITD actor of selling fixed cost is n There is hardl d EBITDA. the industry has don't know wh an if we compa have, then of co st 40 years, it's m, then righting as high as 75%.

Credence Wealt set.

So what h going to get ov m to renegotiat nformation on t his long-term c by other supplie ontracts. apital. today versus 20 owest levels the the lowest that oke is still high EBITDA per spr lized EBITDA BITDAs go up e used to have 5% to 10% in t DA of 70%.

It's price and the c normally the sam y any change i s seen the highs hat normalized m are our EBITDA ourse, 25%-30% been hovering g again.

But wh th.

HEG August has happened ver by end 2022 ate on pricing.

T that.

But yes, it contract that de ers also.

Right 015-16 lows, ho e industry has s at we have seen her than their lo read, how muc is so much dep p and down the EBITDA in th the year '16-17 s very difficult t coke price.

See, ame, if you see in fixed cost.

S s I mean we hav means.

I think As to our custo % should be fin around that, go hat happened 2 G Limited 17, 2020 which you 2.

So many That's what t's true that emand will now, those ow do they een.

But at n.

So today, owest.

And ch it should pendent on e highs and he range of 7.

And then to say what the spread in last 6-7 So only the ve seen the 25%-30%, mers, what ne.

You can oing up and years back Rahul Jai Manish G Rahul Jai Manish G Rahul Jai Manish G Rahul Jai Manish G in:

in:

With rega current tim The HP g competitio prices, ver not comp have more nobody w to lose ou For the sm But in the quality an producers competitio prices and that kind furnace op You ment of needle selling gr would ma prevailing This, we w you can ju There's en No, no, I' talking ab See indus sold 60% procureme American to dodge t But increm goods, is t Sorry, inc Pag ards to China, a me or in today’s grade which w on, that's about ry low margins aring apples w e factors to con wants to take a c t on production maller sizes, it's e ultrahigh pow nd we are com and this Am on.

Now this C d 20% worse co of consistency perations are co tioned in a prev coke and grap aphite electrod ake decent prof g today? will always shy ust look at the l nough data.

Aga m not talking a bout just for our try it is very ea %-65% of thei ent prices and n plants have a d this question of mentally, we ar that correct assu crementally? ge 10 of 17 as we speak tod s time? we have, which t 25% of our b s.

But in the ultr with apples.

Our ntend with.

Wi chance with pr n.

So that is whe s not a problem wer grade, we mparing ourselv merican compa Chinese electro onsumption.

So y.

The steel pla oncerned. vious participan phite electrode, de for today, w fits.

Can you ju y away from doi last 2 years' res ain, but I canno about HEG in p r company. asy.

I mean Gr ir product on d different cost different fixed f spreads.

But y re making good umption? day, how is the is not the big usiness.

That is rahigh power gr r product is de ith electrodes c oductivity so n ere the quality f .

And some of t still have the t ves with the in any, GrafTech de if they com ome customers ants don't need nt's question th assuming that ith no inventor ust share some d ing it.

But you sults and you'll ot be doing that particular, sir.

I afTech has very LDS.

The di tings.

The Japa cost.

We have ou can figure o d money both on e competitive in g-size electrode s where we hav rade, we still ha finitely better. comprising only nobody wants a factor comes in the electrodes d echnical edge. ndustry majors h.

So that's w me in the marke are tempted to d too much of at if we speak t you are buyin ry overhang cou details in terms can figure it ou figure out wha on a con call.

I'm talking abo y healthy EBIT ifferent countri anese have a d a different fixe ut.

It's not diffi n the cost of ma HEG August ntensity from C es, yes, of cou ve to work wit ave an edge bec And the steel y 2% to 3% of a breakage.

Nob n. don't break.

The We are makin which are the where we are et with 35%-40 o buy, but they problems as f in terms of tod ng needle coke ount at either si s of the spreads ut.

It's not diffic at makes a heal out the industry TDAs.

Why, be ries are having different fixed ed cost.

So I me icult. aterial and cost G Limited 17, 2020 China as in rse, there's h very low cause we're companies f their cost, body wants ey are fine. ng the right e generalist falling in 0% cheaper don't offer far as their day's prices today and ide, so you s which are cult.

I mean thy spread. .

I was not ecause they g different cost.

The ean I'd like of finished Rahul Jai Manish G Rahul Jai Manish G Rahul Jai Manish G Rahul Jai Manish G Rahul Jai Manish G in:

in:

Increment Yes.

With rega and the sh supposed specific to over there Yes, we a But do yo What I un China rem their econ and steel eventually 108, they furnaces b they still the long-t eventually So basica things we the world, Yes.

So if Euro who's trac Yes.

This Europe is they're als furnaces i blast furn stop it and plant man make do w So they d of demand Pag tal revenues and ards to the previ hift to EAF-rate to go to almos oday but going e?

So today, it's are far away. ou see over the n nderstand is, def mains the only nomy develops, comes for rec y catch up.

And were very fast. because still th continue to pus term policy of m y catch up with ally, with regard need to track.

I , more specifica opean steel mar cking the compa is definitely im s terribly hit.

Y so talking abou in Europe just aces, these dec d hell of a mone nager decides, with 9.

So they efinitely, what d for steel comi ge 11 of 17 d incremental c ious cycle we s ed used deman st 20%.

But it h g ahead how do almost 10%.

It next 1 or 2 year finitely they ha country in the and they have cycling, definite d if you see the .

They did it in he cost of produ sh their blast fu making 20% of the rest of the W ds to the dema I think at prese ally in Europe. rket does well, t any that things mportant.

Beca You look at wh ut the same thin because of the cisions are very ey to restart a b today, we'll m y immediate cut you said is abs ing from autom costs at today's p saw because of nd, and as per y has not been mo o you feel, do w t was supposed rs that momentu ave not abandon world which h been in develo ely, they will last 2 years, th 2 years.

And th uction via the E urnaces which t f steel through Western world. and side from e nt, what we nee that can be the f are changing. use you see, rig hat ArcelorMitt ng.

In fact, Arc e slowdown in y thoughtfully ta blast furnace.

It make so much s t off 50% produ solutely correct motive or constru price will help u this environme your presentatio oving in that di we get some se to be 20%.

We um will gather? ned the policy o has 10% of elec pment for the l need new elec hey actually did hen they again EAF route is sl they have.

But the electric arc . electrode for ou ed to track is th first pointer to u ght now even t tal has to say celorMittal had demand.

And w aken because it t's not like an el steel.

It's okay. uction.

But bla t that Europe ha uction.

HEG August us to make dec ental clampdow on, it says that direction.

So ma ense of what is e are far away f ?

Can we get th of shifting to EA ctric arc financ last 30 years an ctric arc furnac d it.

They came started pushing lightly more in they have not c furnace route ur graphite elec he demand from us as a division the automotive in their presen to shut down a whenever you t takes hell of a lectric arc furna .

Instead of 18 ast furnace is no as to see some G Limited 17, 2020 ent profits. n on China China was aybe not as happening from that. at?

AF.

In fact, ces.

And as nd 40 years, ces.

They'll from 50 to g their blast n China.

So abandoned .

They will ctrode, two m the rest of n or layman demand in ntations, so a few blast shut down a money to ace and the 8-inch, let's ot like that. resurgence Moderato Saravana Manish G Saravana Manish G Saravana Manish G Saravana Manish G Saravana Manish G Saravana Manish G or: akumar Nagraj

akumar Nagraj

Next ques j: So what w Your voic j: What wou I'll repeat the growth j: Yes.

Thank go we operat you look a us believe quality, w product.

W are Japan company, Now time then all gl the world low cost. keeping o countries, money to ourselves.

COVID.

B j: Can you t Numbers? j: Yes.

After Okay. j: Maybe ran No, indus that tonna you're ask Pag stion is from Sa would you expe ce was not clear uld you expect C your question t h of HEG over d I got the que te.

And I'll tell y at in the last 25 e in our indust which competes We're confiden nese, if there's we will do fine e and again, this loom, all over.

N will perish.

No We have low- our fixed cost including Indi bring up our ex .

So I personal But yes, I do for ell about some ? r post-COVID. ndomly, can tel stry is going to age will also ge king me a proje ge 12 of 17 aravanakumar N ect CAGR grow r.

CAGR growth to make sure th the next 5 year estion.

So you s you the reason.

5-30 years' data try.

We have a s with the best nt about our com this American e. s question come No, it's not like o, it is never go -cost plants.

W down.

We ha ia.

So we are ve xpansion.

So w lly see very go resee good time numbers? ll like graphite see growth.

An et absorbed in ection for next 5 Nagaraj from Va wth for the next for the next 5 y hat I have correc rs.

Is that correc see, we are very The reason is s a, there has been absolutely the s product in the mpany.

But ye n company, Gr es, China this a e that.

It's not th ing to happen l We have a large ave very good ery optimistic.

A we have not lost od times, let's es ahead for HE in India, like in nd definitely, I the market bec 5 years, whatev arthaga Madura 5 years for HEG years for HEG L ctly understood ct? y optimistic ab simple.

The ele n a CAGR of 3 state-of-the-art e world.

So we s, in this busin afTech, it's HE and China that, hat only China w ike that.

We ha e plant at one market spread And as I said, w faith in the pro not say very g EG and this indu ndustry, not for 'm sure that wh ause these are er you said eve HEG August ai E Services.

Limited? d.

So you're say bout our industr ectrical arc furn 3%.

So that is w plant.

We hav e are confident ness environme EG and our ot and what will h will remain and ave good quality location that h d.

We are pre we are putting oduct or the ind good because o dustry.

HEG. hen our expans not normal tim en 1 month back G Limited 17, 2020 ing what is ry in which nace deal, if what makes ve the right t about our ent, if there ther Indian happen and d the rest of y.

We have helps us in sent in 30 in so much dustry or in f thanks to ion comes, mes.

And if k looks too Saravana Manish G Saravana Manish G Gulshan S Saravana Gulshan S Saravana Manish G akumar Nagraj

akumar Nagraj

Sakhuja

akumar Nagraj

Gulati

old today product.

W to keep c which is v blast furn furnaces. j: So what a Oh, yes.

N we told th peak dem which we all of Sou for Atman India who support, v Bharat, th from Chin j: And anoth Free cash Free cash in the form j: So for de negative s and mayb So how w We are lo accounts. operations material.

W far as our our books j: What I'm short term That we a Pag .

So we'll just We have a grea oming up for very clear.

So th naces won't com about our self-re Now this we ha hem this is a p and is only 60, are doing to m utheast Asia.

So nirbhar Bharat. o can provide very short deliv hen nothing else na and dump he her one question flow?

That's ou flows as on da m of Fixed Dep ebtors, actually so due to the pr be actually, you would it impact o ong-term, debt- We are having s like money b We require wo treasury is con s of accounts. asking, actuall m, how would it already explaine ge 13 of 17 go with the b at cost.

And this recycling.

The he more we wo me.

I mean eve eliant India adv ave told the gov product where w ,000 tons.

And more than 30 co o this is one pro I mean the stee them the righ very times.

So w e does, clearly. ere in India. n on finance.

S ur CFO, Gulsha ate is invested in posit with the ba , recently, I ha revious loss.

So u are hinting alr on debt? -free organizati g only working blocked in a f orking capital lo ncerned, it is Rs ly, we are happ t impact due to ed. asics.

The fund s is a growing i re's a shift fro ould go towards entually that ex vert help for gra vernment that, b we have 160,00 we have 100,0 ountries, includi oduct which fits el companies he ht quality, all k what else, if our We don't really o what about th an, just explaine n AAA bonds p anks. ave seen that i o I think it is v eady for next 2 on.

We don't h g capital borrow form of debtor oan from the ba s.

1,280 crores a py to note that COVID? damentals are industry becaus m blast furnac s low carbon em xtra demand wi aphite electrode because they as 00 tons capacit 00 tons capacit ing U.S., Canad s very well into ere in India hav kind of sizes t r product doesn y need any chea he free cash flow ed that. paper in the ma nterest coverag volatile on this 2 to 3 quarters, i have any long-t wings, which i s or in the for ank to run our d and net cash ba HEG is a debt- HEG August there.

We hav se steel is defin ce to electric a missions, so of will be met by e ? sked us about o ty in India.

An ty available to e da, Mexico, all o the Prime Min ve two giant co they need from n't make it to A ap quality impor w? arket, in a debt m ge ratio is actu graphite electro it is growing v term debt in ou is required for rm of WIP, FG day-to-day ope alance of Rs.

84 -free company.

G Limited 17, 2020 e a quality nitely going rc furnace, course, the electric arc ur product, nd even the export, and of Europe, nister's call mpanies in m technical Atmanirbhar rts to come market and ually going ode market ery slowly. ur books of day-to-day G and raw rations.

As 49 crores in But in the Saravana Manish G Moderato Dewang S Manish G Gulshan S Dewang S Gulshan S Dewang S Manish G Gulshan S Dewang S Gulshan S Dewang S akumar Nagraj

or:

Sanghavi

j: You're alr No proble plants hav of logistic this quarte Next ques Just a boo current fi between s The outlay spent out tell him la We can le the last fin I just wan incurred in In the cur commitme to 200 Cr happened expecting Last year understan Correct.

T And after market sc And secon Yes, it's a debtors, a But there Pag ready aware of c em.

In short te ve been shut do cs and transport er compared to stion is from De okkeeping quest nancial year an sustenance and y was Rs.

1,200 of that in '19-2 ater? et him later on, nancial year is a nted to know fo n Q1. But I wil rrent financial ent to honor tha r.

So the total , would be arou around Rs.

150 , CAPEX was d it correct?

That's right.

Tha that, we would enario, so we h ndly, were we F a positive becau nd we are havin is a working ca ge 14 of 17 cash available. erm, about this own for almost rtation challeng last quarter. ewang Sanghav tion.

I just wan and how much growth CAPEX 0 crores.

Now i 20 and this qua sir.

Dewang, approximately R or the current fi ll get back.

No w year, whatever at all LCs.

The outflow in nex und Rs.

400 Cr 0 to 200 Cr of t RS.

200 crore at's right. d take the call, s have been contin FCF-positive or use we are havi ng the other inc apital reduced in Sorry for that. s COVID, if yo a month, so it es also.

So that vi from ICICI S nted to know th we have incu X? if you want to k arter, Gulshan, d if you see the b Rs.

200 Cr. We inancial, what w worries on that r the LCs, we e approximate a xt 12 months, r..

Rs.

200 cror the LCs that we es and this yea see how we hav nuously monito r CFO-positive ing that liquidat come also in ou n the quarter, th ou're asking, th did impact our t is the impact. ecurities. e CAPEX wha rred in Q1. An know exactly h do you have the balance sheet, t e have already p we are planning . have already o amount would b including the C es last year we e have already o ar will be Rs. ve to proceed fu oring the market for the Q1 quar tion from inven r books of acco hat's what I was HEG August hey were sayin r sales.

There ar .

And we are d at have we plan And can you ju how much mone he figures ready the cash flow h paid it. g and how muc opened.

And w be in the range CAPEX that h e did and this y opened.

150 to 200 cro urther based on t situation. rter? ntory and realiz ounts. s...

G Limited 17, 2020 ng that our re so much doing better ned for the ust break it ey we have y or can we appened in ch we have we have the of Rs.

150 had already ear, we are ores.

Did I the current zation from Gulshan S Dewang S Gulshan S Moderato Sunil Red Gulshan S Sunil Red Gulshan S Manish G

Sakhuja

or: ddy:

ddy:

Gulati

Yes.

If I capital.

A inventory on 30th Ju I'm sorry, As on 31s down to R that mone sitting on Next ques I have a possibility Do we nee completel If you see debtors a approxima this financ 400 to 50 we have a the net po vis-à-vis l I'm lookin is around the next f there be a So further mt, it de continuou expansion spend the Manishji, I've said t choose be cash from Pag talk about Mar And that money .

There was a r ne 2020 vs 31st I think I lost yo st of March, we Rs.

432 crores ey has come fro 31st March, 202 stion is from Su question on th y that we would ed to take that o ly based on the e this current y and from the l ately, we can sa cial year.

Thus 0 crores and ou already commit osition as on 31s last financial ye ng a year ahead Rs.

1,200 crore financial year.

I ny other areas o r cash outflow pends upon a usly.

We wou n plan.

So once money.

We ha would you like this in the beg ecause next yea m our regular op ge 15 of 17 rch '20 to June has come only reduction of ap t March 2020. our line in betw e were having a approximately om the realizati 20 balance shee unil Reddy, an I he same lines d have to consu out from suppo profit as we ini year cash flow liquidation of ay, in the range there would be ut of that, we w tted on account st March 2021, ear situation. d because this y es is what we p I'm assuming i of funding we w of Rs.

800 cror lot of factors uld see how an e the market im ave been monit e to add? ginning also tha ar, of course, w perations.

So th e '20, we have y from the real pprox.

Rs.

160 C ween. a working capita on 30th June.

S ion of debtors a et.

Individual Inves of Mr. Dewan ume the money rting this expan itially thought o w, that is going inventory.

Th e of Rs.

400 to e incremental tr would make Rs. t of LCs which it would be bet year, I think we planned.

So I'm t's very unlikel would be lookin res to fund this s.

The current nd when to fur mproves, definit toring the econ at inventory wi what the quest here, we are talk paid off Rs.

20 ization of debto Crores in work al loan of Rs.

5 So we have pa and the liquidat stor. g Sanghavi ha y which we hav nsion capacity b of? g to be generat at is going to 500 crores that reasury to the t 200 crores of had already be tter by approxim would not exp thinking that if ly it will come ng at? s CAPEX plan economic fac rther incur the tely, we would nomic factors an ill come.

But th ion was wheth king about '21-2 HEG August 00 crores of ou tors and liquida king capital bor 592 crores.

Tha aid off Rs.

160 tion of inventor as asked.

Will ve put in the bo by any chance o ted from realiz o give a cash t is going to be tune of approxi the CAPEX pa een opened.

So mately Rs.

200- pect major prof f 800 more to b e from the profi from 80,000 m ctors are being unspent amou d take the call o and the expansi the timing, we'l her we'll genera 22, definitely, t G Limited 17, 2020 ur working ation of the rrowings as at has come crores and ry that was there be a onds, right? or will it be zation from inflow of released in imately Rs. ayment that o if you see -250 crores fit.

So there be spent for its.

So will mt to 1 lakh g reviewed unt on this of when to on closely. ll pick and ate enough the hope of Sunil Red Manish G Sunil Red Manish G Sunil Red Gulshan S Sunil Red Manish G Sunil Red Gulshan S Sunil Red ddy:

ddy:

Sakhuja

ddy:

Gulati

ddy:

Sakhuja

ddy: markets to what both because w So which per the im Yes, abso So there c Yes.

That And this investmen would this is going to Our first economic cash woul is left afte So that is are no oth product c other new that?

This is a v buy some looking at such plan.

Can you s are we acc Majority investmen So then w accountin Pag o get better and h of us meant.

S we have ordered means it won't mprovement in t lutely correct.

A could be a delay 's the worst actu cash which w nts?

Suppose th s be the first mo o be invested? choice is to us scenario we ar ld generate, tha er that, would re a long-term str her active oppor alled Graphene w ventures or ne very dynamic si e 46% of that t similar related . share a little mo counting these r portion of oth nt income. whatever return g? ge 16 of 17 d to be able to So we are just ti d all the long-le t reduce any of the market cond Absolutely, this y in worse scena ually, but it wil we have inves he good times ode of investin e this cash tow re not foreseein at would be use emain in the for rategy, or any e rtunities possib e.

I mean I don ew areas to tak ituation.

You're in General G d products to ca ore details abou returns on the F her income ma ns we get from generate enoug iming is right b ad equipments. the current cas ditions? s is exactly wha arios, which is ll surely come. sted, are they start coming ag g the cash by H wards for the pu ng any other op ed towards this rm of fixed dep extra cash woul ble because I rem n't have much k ke this cash forw e right that they raphene Corpo arbon.

But as o ut that other inc FMPs we have, ajorly comprise m this bond A gh cash to pay but the expansio h standing, but at we meant. okay. going to cont gain and we sta HEG or are ther urpose of expan portunity in the expansion only osits or in AAA d be invested o member Graphi knowledge.

Bu ward, any long- y've invested in oration or some of now, as we sp ome, which we the bond paper es of the incom A papers, when HEG August for the expans on is surely goin t we would only tinue to be in art generating re any other wa ansion.

And in e market.

So w ly.

And whatev A bond paper. only in these bo hite India invest ut are we lookin -term plan or th n a small compa ething.

So we peak, we do no e are quoting to rs we have? me from treasu n would they G Limited 17, 2020 sion.

That's ng to come y time it as n this debt more cash, ys the cash the current hatever the er the cash onds.

There ted in some ng at some houghts on any there to also keep ot have any oday?

How ury, i.e. the come into Gulshan S Sunil Red Gulshan S Sunil Red Gulshan S Sunil Red Gulshan S Sunil Red Moderato Manish G Moderato

ddy:

ddy: or:

Gulati

or: It is accru term in th whatever accounts.

So it's com Yes.

Com for less th accrued in quoting in So if there at some st No. It wo category.

FMP of a 8.5% 1 ye unless the because w So in som per year it You can s come dow into the A I mean ev Thank yo to Mr. Gu Thank you with the volumes f Thank yo Thank you Pag uing every quart he form of FDs the income th And once that F mpounding righ mpany’s treasury han 1 year and n the books of a n the market. e is a disruption tage, today let’s ould not happen Further fixed m any particular m ear down the li ere is a default we are having 10 me sense, this R t keeps adding t say Rs.

80-90 cr wn.

So it is very AAA category. ven 8% is a big n ou very much.

A ulati for closing u, friends.

Than Quarter 2 num front.

So lookin u very much.

O u for joining us ge 17 of 17 rter because trea s with the bank hat is accruing FMP gets matu ht now.

It's not p y comprises of long term, mo accounts on the n in the bond m s say we are acc n.

The reason b maturity plan h mutual fund is ine or 2 years in the underly 00% AAA cate Rs.

1,200 crores to the... rores because in y difficult to ge number today.

As there are no comments. nk you very mu mbers, hopefull ng forward to m On behalf of S s.

You may now asury comprise k and long term g on a long te ured, we would paid? both elements, ore than 1 year. e basis of a fair market, so it can counting 7%? being is that all has a certain ra having a return down the line ying paper of th egory FMP’s. s would add ar n the current sc et a better yield o further questio uch for joining t y which will b meeting you agai SKP Securities w disconnect yo s of short term m in the form of rm, is being i get the full amo , long term and .

For more than valuation or on n happen that w fixed maturity te of interest y n of 8%-8.5%. when this FMP hat FMP.

But w ound an 8%, g cenario, if you s in the market b ons, I will now this call.

And w be better than in.

Thank you.

Limited that c our lines.

Thank HEG August also and long t f fixed maturity included in the ount including d short term.

Sh n 1 year, incom n the basis of N we would show y plans are of 1 yielding on that So I would ge P gets matured we don't forese good Rs.

100 cr see that rate of i by deploying y hand the confe we hope to meet this one, at le concludes this c k you.

G Limited 17, 2020 term.

Short y plans.

So e books of interest... hort term is me is being NAV that is w some loss 00% AAA t.

Example, et this 8%- d, until and ee anything rores profit interest has your money erence over t you again east on the conference.