Mishra Dhatu Nigam Limited

Viraj Mithani

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Viraj Mithani

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Viraj Mithani

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Viraj Mithani

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Viraj Mithani

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Viraj Mithani

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Viraj Mithani

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Viraj Mithani

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Viraj Mithani

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Rohit Ohri

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Sanjay Kumar Jha: There will be a pressure on the margin level of raw material, not only for Midhani for any metal company.

— Viraj Mithani

If you see results if that come out coming in any steel plant also because it is reflected in that, and we are also having the single problem, but we are trying to see that how best we can utilize our reverse and recycle or scrap, which we generate internally to minimize the impact of the raw material, but the cost of the power and energy that is in form of the LPG and all, it will remain on the higher price.

— Viraj Mithani

Overall there will be a pressure on the margin, if you see in the next quarter also probably from the third quarter and all it may get normalize, but first two quarters we will find the impact of that.

— Viraj Mithani

Sanjay Kumar Jha: BEL and HAL, they are basically the manufacturer of the defense platform and there what will happen that whatever growth because they have a very good order book position now and also the orders are all long-term orders, so they are planning out that all input material they has been taken care maybe couple of years back only, so that the pressure is we are seeing on the raw material they may not see on that sort of pressure.

— Viraj Mithani

I cannot say on that figure, that figure is very difficult to predict right now.

— Dr. Sanjay Kumar Jha

Q

Good afternoon and thank you for giving me the opportunity. My question is if I see the raw material cost, the percentage of sales in this quarter it has actually gone crazily high, so can you explain what was the reason for this compared to the corresponding last quarter? Dr. Sanjay Kumar Jha: Cost of raw material you are telling.

Viraj Mithani

Yes, cost of raw material, it is like 96% or something,,,, so what happened means if you can just throw some light and going forward how are we trying to tackle this? Dr. Sanjay Kumar Jha: You are talking about the cost of raw material. Correct. Dr. Sanjay Kumar Jha: Yes, cost of raw material is high because if you see the first quarter of the previous year and now there is an increase in production in tonnage form if you see almost more than two times. Naturally the production has gone up and it has been reflected in the form of VoP also and there it is coming almost 90% higher. Almost two ti

Q

Two questions. First one is related to the JV that we have with NALCO, so when do you expect that the operations will start. Dr. Sanjay Kumar Jha: JV work is going on now, but it has slightly slowed down initially because of some issues in the land acquisition and also getting the environment clearances and all, but now those things are in place and we have gone to the first stage of appointing that consultant for execution of the project it will take care of the procurement and remaining part of the project and also we have gone from the first phase, already tender we have floated for getting

Rohit Ohri

So what sort of investments will be expected from Midhani. Dr. Sanjay Kumar Jha: Midhani, w are giving the equity of around 170 Crores. These orders from the railways that has started gearing up for mass production of axels and wheels for certain wagons as well as LHB coaches, what sort of opportunity do we see in that domain? Dr. Sanjay Kumar Jha: For axel already we are executing one order of around 4 to 5 Crores; it is initial trade, but we have some future indications are there. We are getting around consistency or getting the orders so maybe around 15 to 20 Crores worth of order will be t

Q

Thank you for the opportunity. You mentioned that order book is now similar to what it was in March 2022. Is it from 1300 Crores the outstanding order book? Dr. Sanjay Kumar Jha: Yes.

Hardik Jain

Last time you mentioned that we will be saving around 60 Crores due to wide plate mill because we are doing the rolling outside and once this wide plate mill start we will do the rolling in-house and we can save around 60 Crores. The benefit of the annual saving of 60 Crores by when we should start seeing. Can it start from the next quarter? Dr. Sanjay Kumar Jha: No, this whatever I have told is we are outsourcing for our plate rolling so that outsourcing we have stopped, so in the first quarter we have sell around because of that 4 to 5 Crores saving is there. Now then saving in terms that we

Q

My question is on Pinaka. Would you be supplying any material to the Pinaka orders that they are close to formulizing. Dr. Sanjay Kumar Jha: For Pinaka missile, we have initially developed the material, but at present it is they are getting this material through the open tender and with the amount of open tender we will also participate and if we are able to get the L1, we can get this order, but the material component is very limited in the cost of material and the Pinaka is very less. It is the material is a very low alloy steel and its value is very less, so mainly the missile part other pa

Abhijit

But I think the order size is pretty big right. Dr. Sanjay Kumar Jha: Numbers are quite big in that. What are your estimate of the total order value because I think they have clocked IFB also and given a number of 8600 Crores within that in front will take fighting vehicle also within the 8600 Crores, but how much would be your addressable market if I assume only the rocket. Dr. Sanjay Kumar Jha: Frankly I have not assessed Midhani market is there in that, but for Pinaka missile as I told you it is basically the low alloy steel where the margin will be very less probably Midhani we may not abl

Q

My question is on inventory, I am not sure what is the current figure in the balance sheet but I guess the last year it was around 200 Crores of scrap in the inventory, so I want to know how do we assess what is extractable from the scrap and what is the process of revaluing this inventory in case we are not able to extract the amount of metal that we think we should be able to. Dr. Sanjay Kumar Jha: We have two types of generations with scraps; one time generation is that which we cant recycle. Second which we cannot recycle. Recyclable scrap almost reached a 70% is there which we can recycle

Shalabh

The number that we see in the balance sheet like for last reported balance sheet 2021, it was 218 Crores that is the 100% scrap right, 70% of which probably is recyclable and balance 30% is not is that understanding correct. I am not clear in that, I will reply it, I will give you that correct value on that. Basically, it is a dynamic one, which we can this change will be there but the current value is how much and what is that, that we will communicate. Why this question comes up because it is a sizable part of our balance sheet which goes and fits in that scrap and it has increased significa

Q

This order intake of around 1000 Crores that you said before the call dropped off. Is this primarily from defense? Dr. Sanjay Kumar Jha: Yes mainly from defense.

Shalabh

Thank you Sir and all the very best.

Q

Can you give me the breakup of the current order book and second question is in terms of how do you see the order intake coming, which are the area that you see growth in coming next three to four quarters and since our order book (inaudible)37.18 orders over a three- year period right sir if I am correct in this. Dr. Sanjay Kumar Jha: First of all I will just answer your question about the order book. We have total order book is 1377 and breakup is like that not in terms of percentage here I am not having but you can calculate from that so around 600 plus is for the space, 300 plus for naval

Parimal Mithani

Since there is MOD budget in terms of shipyard in terms of aircraft and all that it is quite high over a period of time and how do you see Midhani’s role in it going ahead. Dr. Sanjay Kumar Jha: You are talking on the defense acquisition and clearance and all that. Yes, defense acquisition in terms of aircraft the new destroyers and the various orders, which the defense has already given to missile currently it is how do you see your position in things of moving ahead. Dr. Sanjay Kumar Jha: All whatever the term you are saying the materials are mainly source from the defense vendors. Midhani a

Q

If you can give us some color and sense like how is the year plan and next year would be in terms of growth, profitability and margins.

Dr. Sanjay Kumar Jha

I can do one thing; we can give you some figure, but in summary I will say that we have given the target of around 25% growth every year, so the idea behind that 25% it is coming under every field since we have to grow by 25% profit also has to go importantly.

Q

Correct. Dr. Sanjay Kumar Jha: We are with the Ministry of Defense. Ministry of Defense has given a target of that 175000 Crores is a turnover now so they are looking for almost two times the turnover has to go up by 2024-2025 and export has to go from right now we have around $1.75 million it has to go to $5 million, so our targets also has been aligned accordingly wherever today we are from that we have to go to almost double we have to go to our turnover and also export has to go to high exponentially very high. Export is coming to three times, and that get three times I have to get to it f

Viraj Mithani

It means that next year we do around 1000 Crores top line and around 200 Crores, 220 Crores profit because we enjoyed 21% net margin; does it mean that we are going by the number so what you are guiding us so what you are telling about that. Dr. Sanjay Kumar Jha: You could infer from that, but I cannot share about the figure but definitely our target is to meet the requirement of our department. Net margins would be 21% only and now net margins would be going down because of the commodity inflation, competition. I cannot say on that figure, that figure is very difficult to predict right now. I

Q

Thank you for providing me this opportunity. My question is about the addressable opportunity for aerospace like in next ten years around 100 odd fighter jets going to be manufactured in India, of it what could be the size addressable possible market size for company like Midhani, and also in next ten years also there will be a hypersonic missiles where lot of specially graded air alloys or metals will be required so if I put together in these context, can you please help us understanding the requirement and possible marketable size? Dr. Sanjay Kumar Jha: This exercise has been already done by

Prabir

If you exclude this engine part for this aero frame and all so rightly recently there is a 46000 Crores of orders given to HAL for Mark1A, so in that what could be the size of this material for aero frame and all and other whatever required materials. Dr. Sanjay Kumar Jha: You have told very correctly that you are mean the aero engine. Aero engine is the biggest; material cost wise highest in that and second comes the frame now the frame is also not made from the Indian material whatever LC you are seeing it is getting from the imported source only so the balance material left for very limited

Q

Thanks for the opportunity. I have two questions; one on the inventory side so we are carrying inventory of almost 1000 Crores versus our revenue of 800 odd Crores, so what is the normalized level of inventory that we are aimed and by when do we expect to get that. Dr. Sanjay Kumar Jha: Normalized level of inventory projections are being given by the consultant right now and we cannot reduce immediately but our efforts are on. As I told earlier also we have tried to reduce it but then the raw material prices have gone up in the recent past, so I am not seeing that near future it will come down

Darshan Shah

Second question is on the LCA aircraft opportunity. In some of the earlier calls, you have mentioned that per aircraft raw material requirement would be around 25, 30 Crores is that correct. Dr. Sanjay Kumar Jha: Yes, ideally, the requirement is there, but what has happened that initially for initial feeds of 15, 20 year craft since the HAL our materials are not certified so HAL has taken the preference state to buy the material from the outside and slowly they are giving the orders for indigenization, so right now we have the order of around 20, 25 Crores of order for LCA and it is getting ad

Q

Just to add to the aero question, out of total 55 Crores of order book that you have from aero 25 Crores is from LCA and the rest is from development materials for AMCA, is that right. Dr. Sanjay Kumar Jha: No, AMCA is not included in that. We have for aero that Adour engine that we will see that as I told you that engine-based crafts. Then also we have for this recovery dry engine is there for GTRE.

Abhijit

Well these are what slow moving orders or what. Dr. Sanjay Kumar Jha: No, it is not slow moving these are all very fast moving only. They are procuring materials for cover the engine on a regular basis. Dr. Sanjay Kumar Jha: Yes, it has started know that the cover engine, dry engine has started for what I have heard about India has gone to the first trial has taken for UCAV that is Unmanned Aerial Combat Vehicle. Already they have taken the first trial and this now the idea is to make more and more so there the engine will be used from that cover dry engine. This would be one time orders right