SHYAMMETL — earnings call

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Prepared remarks

Moderator · Conference Operator

MR. SUMEET KHAITAN - MUFG INTIME Shyam Metalics and Energy Limited May 09, 2025

Questions and answers

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Moderator · Conference Operator

Thank you very much.

We will now begin the question-and-answer session.

The first question is from the line of Amit Dixit from ICICI Securities.

Please proceed.

Amit Dixit

Hi.

Thank you for the opportunity and congratulations for a good set of numbers in a very challenging backdrop.

Two questions from my side.

The CAPEX plan that was outlined, I mean, 66% we have already achieved.

Over the next two years, we will achieve the residual CAPEX.

So just wanted to understand what is the next leg of growth that you are looking at?

What all sectors or subsectors that you are targeting?

And also in Slide #21 and #22, you have laid out very nicely the sales volume, expected sales volume by FY'27.

If we take today's prices in context, then what kind of revenue, EBITDA, we can look at the Company level in FY'27?

Brij Bhushan Agarwal

Investment what Shyam Metalics is following is on the aluminum sector.

We are going backward integration in the aluminum putting up a foil stock plant.

We are increasing the foil capacity 2.5x and we are also going forward foil capacity in putting up the aluminum fins and value addition product which is going to strengthen the aluminum business and which we see that in FY'27, aluminum business should have a very decent revenue and a good margin business we will be able to cultivate as we are going backward, reducing the price and cost of our existing business also, increasing and enhancing the capacity of our existing business and adding more value addition like aluminum fins which is a very interesting product which is as on date 100% import and we are seeing lot of air conditioning industries are coming up, lot of cooling towers, air cooling towers, lot of businesses are getting developed and in the time to come I see a very robust demand because it's a laminated foil, very high tech and today nobody in the country is doing that.

Now, our second major investment is coming up with the stainless steel.

As you know, we have commissioned the stainless-steel plant from the NCLT a sick plant.

And now, in last 1.5 years- 2 years we have learned the operations.

And this year, we expect that we should be able to do a revenue of close to Rs.

1,300 crores to Rs.

1,400 crores this year.

And in the stainless steel now from the long product, we are getting into a flat product.

We are setting up a complete steel melting shop where we will be using our existing iron, our captive power, our specialty alloy, other general ferroalloys and only nickel is a product which we might have to buy from the market or we will be focusing more than 60% on the 200 and 400 steel which is almost a nickel free.

There is no much nickel requirement or it is a nickel free product.

Shyam Metalics and Energy Limited May 09, 2025 In stainless steel, we are putting up a flat product, mean, we are putting up complete downstream where we can cater to the tube market to the high segment precision steel in the stainless steel sector which is used for the decorative steel in the railways, in lot of other businesses in the defense, lot of requirements are there.

So we should be able to cater into that market.

So this product is also very, very interesting and it is a downward and upstream both integration of our existing plant and it is coming up in the brown field existing location and we don't see any challenge in setting up this plant.

The third upmost what we are doing right now is we are increasing the capacity of our color coated plant.

It is very interesting that we just commissioned the plant in the last quarter of the last year.

And last month we achieved almost 90% capacity utilization.

Our product is well accepted in the market.

And now we are gearing up for high value-added product in the existing product.

And also doubling the capacity of the existing HR color coated galvalume business what we have commissioned last year.

Apart from that, we are adding more DRI facilities which is already shared in our earlier projection with the captive power plant because we will be requiring a lot of power to run our existing aluminum plants and other plants so we will be generating the power from the waste heat and also will be able to cater to our existing downstream facilities of aluminum as well as the stainless steel facility.

So this is what is the major CAPEX we have outlay in the present businesses which is pending and we expect that in next 1.5 to 2 years we will be able to complete that CAPEX.

Thank you.

Pankaj Harlalka

To answer the second portion, Amitji, basically if you look at the revenue expectation post-27 based on current realization is about anything between Rs.

22,000 crores to Rs.

23,000 crores and EBITDA we are currently this year at about Rs.

1,866 crores.

So it should be anything between Rs.

2,800 crores to Rs.

3200 crores.

Amit Dixit

Wonderful.

The second question is for Deepak.

This year we saw an inventory buildup.

I inventory days have gone up.

And you mentioned in your prepared remarks that this is due to the new verticals coming up.

So just wanted to understand that whether this is the normal inventory that we should work with around 100 days or there is a chance for working capital unlocking, inventory unlocking rather as we go ahead?

Deepak Agarwal

The inventory days will be in terms of the new upcoming project, the inventory day will be hovering in between 90 to 100 days.

Amit Dixit

Okay, sir.

Got it.

Thank you and all the best.

Moderator · Conference Operator

Thank you.

The next question is from the line of Shaleen Kumar from UBS.

Please proceed.

Shaleen Kumar

Congratulations to the management.

I think it's a pretty good set of numbers in the current environment.

So Bhushanji, I missed a little bit of your initial remark and I also, what I heard that April has been pretty solid and strong for specifically for your blast furnace, etc. But what I want to ask over here is that, while your performance has been very strong for Quarter, is it fair Shyam Metalics and Energy Limited May 09, 2025 to assume that it has built over the months because some of your capacities have come in past few months.

So, is it March, maybe stronger than Feb, maybe stronger than Jan or was it pretty homogeneous?

Brij Bhushan Agarwal

It is totally cumulative only because market was also end of 4th Quarter always we see the markets are always on the better side the demand was also very good, the realization also improved, no doubt.

Also there were lot of changes and improvement in the efficiency side from the cost side and also the new value-added products, we are regularly innovating like in pig iron also, we are making some great foundries and materials and high value added.

So a lot of things have cumulatively contributed.

Shaleen Kumar

Thank you. sir.

So basically the reason I am trying to ask is, it will help me understand how the 1Q is going to be.

Like how strong the March or April is.

Any color on that in terms of numbers?

Brij Bhushan Agarwal

Market is not bad I would say and I expect that there will be a volume growth.

The revenue growth will be also there in this Q1 and I am pretty optimistic like everything is looking very positive.

Shaleen Kumar

We can expect Q-on-Q growth, right, in 1Q?

Brij Bhushan Agarwal

Yes, we can expect.

Shaleen Kumar

As utilization goes up for all your new capacities, right?

Brij Bhushan Agarwal

Perfect, correct.

Shaleen Kumar

Sir, I think this is a question for Deepakji.

Deepakji, can you put a number like what kind of CAPEX we are looking for FY'26 in key areas?

Deepak Agarwal

The remaining CAPEX of around Rs.

3,000 crores, out of the Rs.

3,000 crores, the Rs.

2,000 crores of CAPEX will be incurred during the Financial Year ‘25-'26 which comprising of captive power, solar, and this combined finished steel Rs.

413 crore, stainless steel Rs.

784 crore, aluminum Rs.

126 crore which all conclude there is a CAPEX of Rs.

2010 crores.

Shaleen Kumar

Got it.

Alright.

One more question on the CAPEX, and now I am going back to the Bhushanji.

I think Amit tried asking you the same thing.

See, these are some of the CAPEX which we know right?

But, theoretically, I am not asking you to guide us, but theoretically, where else and what else you can do, because there is enough cash, and now you have almost done a large part of our CAPEX which we announced a few years back.

So, what other things we can think about?

I am just putting like theoretically, not necessarily telling you to commit, but what are the areas which we can evaluate?

Let's put it this way.

Shyam Metalics and Energy Limited May 09, 2025

Pankaj Harlalka

I will take it on behalf of sir, till he joins.

So basically, Shaleenji, we have been contemplating a few things…

Brij Bhushan Agarwal

Can you repeat the question, Shaleenji?

Shaleen Kumar

Sure, Bhushanji, basically, I am trying to get more from you.

I think Amit tried to get more from you.

So let's say theoretically, no guidance, but theoretically.

What are the other investment areas beyond what you have already announced, which you can explore, whether in aluminum or in steel or whatever, like wire or HRC or anything you can talk about, or existing products?

Theoretically, what all you can explore?

Brij Bhushan Agarwal

In stainless steel long product, we have recently commissioned the Wire Division and the Bright Bar Division.

These wires are all very high precision wires, which has an incredible export market and has a very unique utilization.

And very few limited companies are there in the country.

So we just commissioned the plan now, Bright Bar and Wire.

And we expect that it will take close to 3 months to 6 months to stabilize, because it has a lot of high esteem buyers, which has their rules and regulations of approvals and all.

So this is one thing what we are doing in the long product of stainless steel.

In aluminum, as we said, that we have already been approved in the battery foil business.

And we expect that once we see any battery plant commission, so we will be, as on date we are only the choice in the country who has been approved and is well established to supply the battery foil in the EV battery space.

Apart from that, if you see down the line, all our new investment, what we did was in a, we cultivated hardly a couple of years before.

It is majorly focusing on the high value businesses in the terms of delta.

Also, if you see the ROCE of these businesses are very high because if you think of setting up a half a million ton of stainless steel plant, any half a million ton of stainless steel plant would have cost close to around Rs.

6,000 crores because stainless steel is a very unique product.

But since we had all the establishment of power plants, steel making, specialty alloy, land, everything, so at a very minimalistic cost we are doing half a million ton.

So it's close to around Rs.

1,500 crores.

So all these businesses have a very high ROCE and also it is very well integrated with our backward and forward because if you have your own raw material, then your inventory cost, your working capital cost, everything is very well taken care of.

Then apart from that, we are adding lot of energy, power plants.

As you know, we have a coal washery and we generate a lot of rejects.

So since we are adding the DRI capacity, we need to add our power plant to consume that middling and rejects, which is a byproduct of our washery division.

So all these things is, all along cumulatively is increasing and enhancing the bottomline and also getting integrated in the numbers of the total consolidation.

Thank you.

Deepak Agarwal

Shaleenji, in addition to this, I would also like to share to you that since we have a capital allocation policy and we are generating cash of more than Rs.

2,000 crore year-on-year basis and 70% to 80% further it will be reinvested in the business.

As you said, after two years, what we will do?

We will definitely announce various projects.

Our CAPEX team is already working on it.

Whatever we will invest, where the ROE and ROCE would be more than 20% will be Shyam Metalics and Energy Limited May 09, 2025 there.

So we are working on it, and we will definitely, shortly announce maybe next quarter or the next quarter.

Shaleen Kumar

Deepakji, can I take this opportunity to ask a little bit more on your stainless steel wire?

Just a few basic questions over there in terms of end market, the capacity, what kind of EBITDA per ton can we expect in that?

And how big is the opportunity?

Brij Bhushan Agarwal

See, Shaleen, we just have installed the very mid-size capacity because know wire business and all they take little time to develop.

But overall I can tell you, comprising of wire and bright bar our total install capacity is close to 40,000 tons per year presently.

And on an average I can say that once we establish our product and we are through with all the, overcome all the challenges because we had put up the world class facility so there is no doubt.

And since it is a forward and backward integration of our existing stainless steel long product division which we have acquired through the NCLT in Indore.

So we expect that close to Rs.

7,000 to Rs.

12,000 per ton is going to be an average EBITDA.

But there are certain products where we might fetch more than Rs.

30,000 a ton.

But what conservatively I am sharing with you is we can say that it will be close to average will be 10 to 12,000 tons.

Shaleen Kumar

And sir, end market, end customer and end usage.

Any sense on that?

Brij Bhushan Agarwal

Huge, lot of export market is there.

There are lot of defense Company which require wires.

There are lot of, in railways lot of requirement of wires are there, on the machine side and also on the decorative side.

So it is a very well spread.

Wire is a very big segment in today's time.

Shaleen Kumar

Just last bit sir on this.

Is there an entry barrier in terms of the product qualification?

Like what do you think that that's not a big challenge?

Brij Bhushan Agarwal

No, it is a challenge.

It is a challenge like any of these we are not talking of a commodity wire.

In today plant we are making welding electrodes wire.

Nobody in the country is doing this.

So we are the Company who has developed the welding electrodes wire like for all the welding electrodes we make a special quality of wire which used to be was an import from outside.

So all these wires, they have a very special application.

I will not be able to share all the details because I am not directly day to day involved on the product side, but briefly I am telling you.

So it will not be right or appropriate from my end.

But I can tell you like, these are all the high niche wires.

Decorative, a very big segment of this stainless steel wire, then the defense, all the, in the construction also, in the specialized construction also, the stainless steel, special quality wires are very much important.

So in the machinery side, on the heat exchanger side, there are wires, filters, if you have seen a filter, so there a lot of requirements are there on the automobile side also, some components are there where these requirements are there.

So it's a huge like, wire, it's like an ocean, like when we see all category of wires are there, but specialty wire has a very different market.

Shyam Metalics and Energy Limited May 09, 2025

Shaleen Kumar

Right sir, that is exactly what I was trying to ask you.

I think it's very very exciting sir.

I will go back to the queue.

Thank you so much.

Really appreciate it.

Moderator · Conference Operator

Thank you.

Before I go to the next question, I would like to remind participants that you may press * and 1 to ask a question.

The next question is from the line of Rajesh Majumdar from B&K Securities.

Please go ahead.

Rajesh Majumdar

Good evening all and congratulations Mr. Bhushanji on becoming the Chairman of the Company.

So I had a couple of questions.

One is the fact that the DI pipe plant, I think there is a time lag of about 1 year to 1.5 years or 2 years before the plant kind of stabilizes, as per my understanding from the other persons who put up this plant.

So will we see a period of losses for the DI plant, DI pipe plant and is that incorporated in our estimates?

That was the first question.

Brij Bhushan Agarwal

DI plant, yes, it takes around, nowadays it doesn't take 1 year to 1.5 years because DI has become like a commodity.

It is not more a very niche product if you ask me.

And all the past procedures, challenges in this industry is more or less sorted out.

Since we have shifted this DI plant from our existing Jamuria to Ramsarup, which is near to the port and cost wise it is more economical and downstream because we have taken a Ramsarup plant where we had a blast furnace and we want to create some product mix where we can set up a downstream product and all.

So I don't see there is much challenges, but yes.

It does take time in setting up a plant of a DI.

It takes close to 1.5 years to 2 years, 6-month establishment time is good enough.

Right now, all the rules and regulations what was created by the old predecessor is no more in the system.

So it is not a very difficult thing to sell in the market.

Thank you.

Rajesh Majumdar

Thank you, sir and my other question was on the SS Melt Shop you mentioned that we will be focusing on the 200 and 400 series, so this will be a blast furnace this will not be a scrap based, this will be a fully primary unit is that correct?

Brij Bhushan Agarwal

Primary unit, yes correct.

Rajesh Majumdar

Okay.

So we will not be using scrap at all, we will be using a pig iron or iron ore.

Brij Bhushan Agarwal

Yes, we will be using the scrap in case we want to have a nickel, because there are certain scraps, if you buy a virgin nickel, it is more expensive.

So every stainless steel manufacturer globally they source scrap to reduce the price of the nickel because there are certain scraps where you get nickel at 60% of the normal value.

So it depends, but we don't have much pressure of nickel because our major focus would be close to 200 or 400 series.

And I expect that, in certain stage you have a requirement of a nickel that should also be available in our portal because we can't allow our customer to go to another window for any other material which has a very low requirement.

Rajesh Majumdar

And what about ferrochrome sir?

Will we have ferrochrome plant as well or will it be sourcing ferrochrome from outside?

Shyam Metalics and Energy Limited May 09, 2025

Brij Bhushan Agarwal

No. We are already making ferrochrome, manganese, low carbon, specialty, all 80%, 89% of all the specialty products.

We are the largest supplier to all the stainless steel companies globally.

The export to all the companies.

Rajesh Majumdar

So, we export to all the companies.

Brij Bhushan Agarwal

Perfect.

Rajesh Majumdar

And sir, if I could hazard a strategic question on your capital allocation policy, you a very low space for dividends.

So are you fairly confident that we will be reaching the 20% ROCE for our Company because we hardly see much dividend payout in this Company?

That was the last question.

Thank you.

Brij Bhushan Agarwal

That is Mr. Deepak Agarwal's question.

Please, Deepak, your call.

Pankaj Harlalka

Definitely.

So we are already, if you look at last post listing since '21, we have rolled out a dividend of about 11% as per our policy.

And we are always on the CAPEX right now.

So if you look at, a large CAPEX happened in terms of blast furnace which was like spent of more than Rs.

1,200 crores-Rs.

1,300 crores spread over 2 to 3 years.

So that is why the ROE was lower.

I Think going forward things will be back to normal as far as overall Company ROE is concerned.

Rajesh Majumdar

Thank you.

Moderator · Conference Operator

Thank you.

The next question is from the line of Anupam Gupta from IIFL Capital.

Please proceed.

Anupam Gupta

Hi sir.

One of the earlier questions you had answered in terms of the expected EBITDA when you reach this, the full volumes in FY'27 close to Rs.

3,200 crore.

But if you actually look at your volumes and the mix as well, the finished steel capacity is doubling, your stainless steel is coming up entirely in FY'27 and aluminum also is doubling.

Only the carbon steel intermediate products is where you have 20% growth overall.

Ideally, does the Rs.

3,200 crore number is a very conservative number but ideally you should be closer to that Rs.

4,000 crore given that already at a run rate of Rs.

2,000 crore EBITDA at an annual basis.

Brij Bhushan Agarwal

Anupam, Pankaj said 2,800 to 3,200.

We would love to talk conservative.

Like if you see in last three years in Shyam Metalics, our deliverable is 120%.

Like, when we did an IPO, the revenue of the Company just 3.5 years before was Rs.

6,000 crores.

And next year we are talking of Rs.

18,000 crores.

Our EBITDA that time was close to Rs.

600 crores.

This year we are talking more than close to Rs.

1,800 crores to Rs.

2,000 crores.

We would love to be conservative because you never know what kind of changes happen in the geopolitical situation.

And we want to be pretty sure that our deliverables and our commitment should not disappoint our investors.

Though we will give our best shot and let us keep this in the trade, in the business like how the Shyam Metalics and Energy Limited May 09, 2025 market reacts, how the pricing goes up, how the raw material things happen, so that in the time to come we should be able to deliver more and more what we commit.

Anupam Gupta

Sure sir, that's helpful.

Just one question related to that since you mentioned that you want to be conservative here.

Apart from macro, any specific thing which you worry about in terms of let's say so far your execution has been very great in terms of how the CAPEX has been implemented.

But any other risk which you worry about to achieve this sort of growth which you have indicated?

Brij Bhushan Agarwal

I have only worried about my investors.

They should be happy.

That's all.

I am only concerned that whatever we promised we should be able to deliver more and investors should be more and more happy.

I am actually not bothered at all.

I think we are pretty mature and if you see the last so many years, so many quarters we have seen like with the best of the metal Company vis-à- vis the Shyam Metalics year-on-year, quarter-on-quarter we had tried our best to deliver more and more better.

So I think now our investors should have renowned confidence on their Company like on our deliverables, on our CAPEX plan, on our dividend policies and all.

What we stated 3.5 year before, we are trying to maintain as per our commitment and what we had forecast for 3 years.

Anupam Gupta

Sure, sir, That's helpful.

Thanks a lot.

Moderator · Conference Operator

Thank you.

The next question is from the line of Rudraksh Raheja from Ithought PMS.

Rudraksh Raheja

Thanks for the opportunity, sir.

My question pertains to the DI pipes industry.

12 to 15 states have started accepting O-PVC pipes.

So how do you think that affects DI pipes industry?

Brij Bhushan Agarwal

Can you please repeat your question?

Rudraksh Raheja

Yes, I will repeat it.

I wanted to ask about how O-PVC pipes introduction affect the DI pipes industry since we are expanding into that product.

Brij Bhushan Agarwal

Very correct.

It is affecting.

It is affecting and in the time to come, it will have a great competition with the DI pipe below 300 size.

So if you see today a complete DI plant, if you think of establishing a complete DI plant with a center plant blast furnace infrastructure and all, it is not going to cost you less than Rs.

2,000 crores.

But in our case, a small capacity of DI plant is just a kind of ancillary to our existing brownfield project what we acquired through the NCLT.

So if we are able to, like DI pipe has been able to gain the EBITDA of close to Rs.

18,000-Rs.

20,000 a ton in last one year and presently I think it is struggling between Rs.

7,000-Rs.

8,000 to Rs.

10,000 a ton.

I am telling you a ballpark figure.

I am not 100% sure, but yes, 95%.

If we invest on 300,000 tons capacity, close to Rs.

350 crores or Rs.

400 crores, and if I am able to gain the EBITDA of say Rs.

5,000 crores, Rs.

5,000 a ton, we make close to Rs.

150 crore EBITDA every year.

If you see the ROCE, ROI on my additional investment on DI, which helps us to de- risk our business, which help us to space ourself in the product and which is a very small Shyam Metalics and Energy Limited May 09, 2025 investment for such a conglomerate like Shyam Metalics in the terms of the future opportunity, also in the terms of utilization of our existing hot metal.

So this is one of the idea what I have, but you very correct.

This is a challenge and this is going to be a strong challenge in the time to come.

But OPVC has always been in the international market for many years, if you go to any of the Western country.

But there are certain areas where still the DI is the major pipe which is being procured and utilized.

So we would like to restrict ourselves with the minimalistic and conservative CAPEX in the first go, so that this period we should be able to regain and in the worst of the time if we discount ourselves on the 50% of our ambition, then also our ROCE and ROI is very interesting.

So this is the reason like we are absolutely optimistic on this business.

Rudraksh Raheja

Got it, sir.

Regarding this sir, which prices do you think that are getting most affected in this segment or how much percentage of…?

Brij Bhushan Agarwal

Below 350, this is close to around 40% to 50%.

Rudraksh Raheja

So just to clarify, you are saying 40% to 50% of the industry is being affected.

Brij Bhushan Agarwal

Slowly.

It is not affected.

40% to 50% but still there are sizes of 80 to 350 where people are using DI.

They have not rejected it.

Like if I am putting up a steel plant, I need a water supply.

I will definitely like to put up a DI plant, DI pipe, not the OPVC pipe.

So it depends on the usage, the area, the concern of the utilization and all.

So it all has a unique, properties like, you can't 100% replace it, but yes, in certain places it can be replaced.

When it is an open space, you can't put up a plastic pipe.

OPVC is just a plastic pipe.

But in the open place, DI is very well installed, and it is as good as the hard surface.

There are certain areas where you can replace, but it is a challenge.

I completely agree with you.

Rudraksh Raheja

Got it, sir.

Thanks for the clarification.

Moderator · Conference Operator

Thank you.

The next question is from the line of Deekshant B. from DB Wealth.

Please proceed.

Deekshant B.

Hi, congratulations sir.

So I want to understand from a larger term perspective.

Of course, you're are a growth Company and we have always portrayed a good growth scenario and also deliver on a good growth scenario while being conservative.

But are the margins still at 12% and we have an outlook to be doing CAPEX which is going to be enhancive.

But what do you think FY'27 what kind of margins can we be expecting from our business on a steady state not any cycle gains that we get but on a steady state what kind of margin improvements can we expect?

Brij Bhushan Agarwal

See, margin is a very, very speculative statement as on date.

But we have to understand that in the toughest scenario, the Company has delivered a decent margin.

And now whatever the future growth is there, it is coming up with a high value added businesses.

So margin is definitely going to enhance.

Apart from that, if you see all the future businesses, investment is also helping us to drive down in the cost side by adding the backward integration or the forward integration so that the realistic value in that business is also increasing.

So it is going to increase.

But at this point Shyam Metalics and Energy Limited May 09, 2025 of time, I will not be able to state like whether it will be 20% or 15% or blah, blah, blah.

But yes, definitely the trend is going on the upper side.

That much I can tell you.

Deekshant B.

No sir, I completely understand that and it would be unfair for me to ask you something where it's so speculative.

But what I am trying to understand here is that, let's assume that the businesses that we are going in, they are live today and in current market situation, what kind of margin we would have expected?

Brij Bhushan Agarwal

Everything is fine, right?

We have been conservative on our projections.

Till I am getting a good ROI and ROCE, I am happy.

So margin I told you it is very volatile.

So it depends on the demand supply, geopolitical situation since last 2-3 years, nothing is going uniform across the planet.

So in spite of that, in spite of so much challenges, if you see quarter-after-quarter if you compare your Company with the best of the metal companies, I am not saying we are the best, but we are among the best.

Deekshant B.

Certainly sir, certainly.

Brij Bhushan Agarwal

Thank you.

Deekshant B.

Sir, a follow up question here is, do you think that the sort of dumping if happens, of course our government has been able to help us a lot.

But if there is any sort of dumping that does happen, do you think that affects us and our particular product ranges?

Brij Bhushan Agarwal

Majorly not because you if you see in our business product module, very less percentage of import threat is there.

But overall, the psychological scenario do matter.

Like dumping was happening before but you have never seen the numbers or the graph or the margins have come down.

So this is a true example and explanatory to your question.

But yes, anything on the positive side drive up, anything which is on the negative side also do affect.

But in our business model where we are too much based on the Indian demands and the product what we had been doing is majorly the product which is consumed in the country and which doesn't have majorly an import if you see on the total portfolio.

So it do affect but very marginally.

Thank you.

Deekshant B.

Got it, sir.

Sir my last question here is on depreciation.

Now, of course, we judge ourselves by EBIT, ROCE, ROI and these sort of numbers but like, is it only when the cycle turns and we get those windfall profits that we can expect our net profits to be in the higher range or like, do you see a point of time where the depreciation growth tapers down and our operating profits are such high that the depreciation no longer really matters?

Do you think that happening anytime soon?

Brij Bhushan Agarwal

In our balance sheet if you see the interest payout is marginal or it's hardly you know we are...

Deekshant B.

Yes.

Shyam Metalics and Energy Limited May 09, 2025

Brij Bhushan Agarwal

So, depreciation is just a statutory accounting norm.

So, if you should see the net cash which is more important you know.

Most of the Company in our terrain is with a lot of debt baggage and lot of corporate debts and blah blah blah.

So, it really doesn't really bother us.

We are more concerned on the net cash which we make on the EBITDA side and the after tax, is majorly is a net cash what is available.

Deekshant B.

Got it, sir.

Thank you so much, sir.

This is very helpful.

Congratulations again.

Brij Bhushan Agarwal

Thank you.

I have another meeting.

Can we, how many questions we have now?

Moderator · Conference Operator

There is only one question in the question queue.

Brij Bhushan Agarwal

Okay, please.

Moderator · Conference Operator

Thank you.

The next question is from the line of Shaleen Kumar from UBS.

Please proceed.

Shaleen Kumar

Cash is important.

So is it possible to share the maintenance CAPEX for this quarter or other from next time onward so that we can think about the cash profit?

Because optically profit is looking lower, right?

So we can at least know what's the cash profit.

We can add back the depreciation and minus the maintenance CAPEX.

Pankaj Harlalka

So Shaleenji, this year if you see, the CAPEX was around Rs.

2,148 crores, right?

Of which the CAPEX that we had announced, for that the CAPEX was around Rs.

1,944 crores.

So we incurred about Rs.

200 crores odd maintenance CAPEX this year, leading to improvements in our existing plants and all.

Shaleen Kumar

How much was the depreciation, sir, if I can ask you?

Accounting depreciation?

Pankaj Harlalka

What did you ask, sir?

How?

Shaleen Kumar

How much was the accounting depreciation?

Depreciation on P&L?

Pankaj Harlalka

Depreciation was around Rs.

700 crores, right?

Shaleen Kumar

Okay.

So basically, you're saying that X of maintenance capital, roughly 500 crores we can add to add to come at the cash profit?

Pankaj Harlalka

Correct.

Shaleen Kumar

That's the way to see it, right?

Pankaj Harlalka

Thank you, sir.

Shaleen Kumar

Thank you.

Shyam Metalics and Energy Limited May 09, 2025

Moderator · Conference Operator

Ladies and gentlemen, that was the last question for the day.

I would now like to hand the conference over to Mr. Sumeet Khaitan from MUFG Intime for closing comments.

Sumeet Khaitan

Thanks to the management for answering all the queries today.

We are from MUFG Intime, Investor Relations Advisors to Shyam Metalics and Energy Limited.

For any queries, please feel free to reach out to us.

Thank you, everyone.

Moderator · Conference Operator

On behalf of Shyam Metalics and Energy Limited that concludes this conference.

Thank you for joining us and you may now disconnect your lines.