FY27 capex hardened to INR15,000cr then INR18-19,000cr FY28 with 3-plant program (IISCO+Bhilai+Bokaro).

My question is on cost. So how much was our blended cost of coking coal in Q1?

Yes, that is the question. It is INR16,918 per ton.

Okay. So it is flat versus the previous quarter? So we are seeing better coking coal prices as well as the coke rate. So one thing which I wasn't able to reconcile was the delta in EBITDA per ton, and that is due to -- partially due to higher cost. So if you can help reconcile that, which cost items have actually moved up?

Previous quarter was INR17,653 on an average. So there's a bit of improvement, yes, around INR600, INR700 per ton. Yes. Regarding your -- you're talking about EBITDA per TSS, Which is INR6,400 now as compared to INR6,000 in quarter 1 last year. So when we look at the imported coal price, average coal blend cost, INR16,918. So quarter 1 previous year was -- just 1 sec. So it is a little less than that. There is an improvement in the production volumes in this quarter 1 as compared to the previous quarter 1. Yes, so in the EBITDA numbers, when we talk about EBITDA numbers, actually we've got advantage in the imported coal and because the royalty is more in the iron ore, so there is a disadvantage in the NSR growth front, there is a disadvantage, but EBITDA is also down -- EBITDA per ton of saleable steel is down primarily because of the stock valuation rates. Because as you understand, because of the reduction in the imported coal rates, the cost of production has come down. And as a result of that, the stock valuation rate of the items -- steel items and iron items, they have come down drastically. So it has impacted the P&L account in terms of accounting. That's the reason why the EBITDA per ton of saleable steel appears to be a little less as compared to last year quarter 1.

Okay. And where do we see the guidance for Q2 on coking coal?

Because so far as Q2 guidance is concerned, the coking coal prices are almost flat as it was in quarter 1. We are hoping that it will remain at the same level, a little bit of variation here and there, won't be on the downside, could be a little up or maybe at the same level. That's about the coking coal. Now talking about the stock valuation impact, it is a onetime impact, which has come in quarter 1 because of the reduction in the cost of production and then transition from last year to this year. So that impact is unlikely in quarter 2. It will not be there in the quarter 2. So quarter 2, we'll have advantage with respect to stock valuation rates. And the coal prices will remain flat, so that will ease out our cost of production.

A couple of questions from my side. The first one is on the capex. So what was the capex in this quarter? How much capex do we expect this year? And if you can also highlight the status of the capex project that we have planned, plant-wise?

Yes. capex, first of all, let me tell you, capex last year was close to INR6,000 crores. And this year, we have kept a target of INR7,500 crores throughout the year, which is a higher target, and we are confident that we'll be able to achieve that. And in quarter 1, we have already crossed the target, which we had given. I'll just give you the number a bit later. The number is quarter 1 target was how much? Quarter 1, we have achieved INR1,642 crores, which is more than the target we had set for the quarter 1. And then, for the entire year, the target is, as I have told, INR7,500 crores, and we have got the plans to achieve it. So far as the facilities are concerned, as you said, actually, we have got the facilities, which are in the pipeline, the facilities which are under execution from there, we are getting the capex. And SAIL is doing expansion and to start with in IISCO steel plant. So the majority of the -- a lot of expenditure of capex in IISCO will come from next year. So that means from next year onwards, the capex figures will be still higher than INR7,500 crores, which is there this year. A bit of that IISCO capex on account of expansion may surface this year. But most of the capex will be from the ongoing projects, which are happening in the various plants.

Okay, sir. The second question is on the rail price revision. So saw some advantage that we had to the tune of INR173-odd crores. Now this pertains to FY '24 as highlighted in notes to accounts. So just wanted to understand the current rail price and what was the rail price booked in FY '24? And how much of this advantage can we get further down the year? Can we expect some more benefit from this or everything for FY '24 has already been taken into account? Due to rail price revision?

Yes, let me tell you the figure. The figure, which was finalized by Joint Pricing Committee was for '23, '24 and, on that basis, because we had taken the income at INR78,000, so it was a little more than that INR79,000 something. So it got around INR173 crores in the accounts. That is for '23, '24. Now '24-'25, incomes were at INR78,000, which was continuing. Now from '25, '26 onwards, the provisional price has been at INR74,000 per ton because of the softening of imported coal prices, so the provisional prices have been capitalized. So that's the reason why accounting is already done in this manner. And going forward, we'll have no issues on this. Yes, rail price revision benefit will not come in this year further because this is already actualized, and that is why no more areas are expected in this year.

Sir, how much is the stock valuation impact this quarter?

Yes, stock valuation impact this quarter is around INR1,050 crores.

So this is -- so INR1,050 crores is a one-off, which will not repeat next quarter onwards. Is that correct to say? Okay. And this was not there in Q4?

It will not repeat next quarter. This is quarter 1 versus quarter 1. This was not during last Q4. Last Q4 -- every quarter there is some amount of stock valuation impact, either it is plus or minus, something like that. But majorly it was not there in Q2. So when we compare this Q1 versus Q4, impact is around INR950 crores.

Okay. And also, what would be the impact because of higher royalty on iron ore, this quarter? Versus Q4?

This quarter is basically because of the IBM prices... Yes, versus Q4, it could be somewhere around we had say, around INR250 crores or INR260 crores. Just 1 sec. INR173 crores to be specific. Around INR173...

Did we get any revenue for sale of NMDC steel? I mean, for marketing NMDC steel this quarter? Last quarter, we highlighted we got some revenue?

Yes. 0.373 million tons we have sold actually and -- so we have got a revenue of around -- in this quarter, around INR1,800 crores odd, that revenue we have sold.

Okay. So adjusted for that, what would be the realization increase this quarter versus Q4? Rupees per ton, yes. NSR increase rupees per ton for Q1 versus Q4.

In terms of what rupees per ton? So Q1 versus Q4, Q1 is around, you can say, INR1,600 per ton increase in NSR.

Just following on Ashish's question earlier, if you can give us actual numbers for NSR, both flat and longs for Q1 as well as Q4 in rupees per ton?

Q1 and Q4. So Q1 long is INR54,500 and Q4 long is INR53,300. In case of flat, Q1 is INR50,400 and Q4 is INR47,300.

Sir, if we saw a decent increase in NSR, I was a bit confused when I look at the slides. So the slide where you show an EBITDA bridge from Q4 to Q1, 2 things caught my eye. One was that the sales price/NSR, we are putting a negative number, in the sense, that it's impacting the EBITDA negatively when moving from Q4 to Q1. That is one. And second is the raw material usage is also hitting us negatively. What is the raw material usage? I mean I would assume that given that we produce less, so usage also would be lower? On the NSR, sir, why are we showing an adverse impact of NSR despite an improvement?

Yes. No, it is not like that actually. I can explain you. When we compare -- you were asking a question about Q1 versus Q4, so when we compare Q1 versus last year Q1, everything appears to be very positive. But when we compare Q1 versus Q4, then even raw material usage front, there is a negative because the technical parameters in quarter 1 are adverse as compared to quarter 4 because quarter 4 happens to be the best producing month, and that is why best technical parameters as well as production volumes. In quarter 1, what happens in all the organizations, they go for capital repair, shutdowns and all that. So productions are not that consistent as compared to quarter 4. And that is the reason why when we regulate and throttle the production, then the technological parameters also get impacted. So that is why the raw material usage is adverse in this quarter 1 compared to quarter 4; however, these are better than quarter 1 of last year. And so the production volume in this quarter 1 is less than that of quarter 4 of last year. But quarter 1 as compared to quarter 1, there is an improvement even in the production volumes. So that is why... No. If you look at that, actually, that can be split into 2 categories, which we'll do from the next time. One is NSR impact and the other one is the stock valuation impact. So when we look at the total net impact is INR258 crores minus. Out of that, around INR950 crores minus is because of the stock valuation. And you can say around INR600 crores to INR700 crores plus is because of the sales price increase. So on the sales NSR front, there is a positive of around INR650 crores to INR700 crores; however, there is negative on account of stock valuation rate impact of around INR950 crores. So on the whole, it is minus INR258 crores.

Understood, sir. And sir, can you just tell us what are the spot NSRs right now in longs and flat? What are the current NSRs, sir, we are seeing right now maybe as of July...

What are the -- Sorry? Okay. Current NSR means July expected NSR is somewhere around -- long is around INR51,500 and flat is around INR48,600.

Understood, sir. And sir, any guidance as to what kind of full year volumes in terms of sales you would be doing? No sir, full year, for '26. '25, '26?

Well, in quarter 2? Yes. For the full year, we are expecting somewhere around 18.5 million tons.

Okay. And just the last -- just a suggestion. This is something, which I have seen over the past few quarters. In the production performance slide, sir, it would be best that we mention whether it's for the quarter or for the cumulative till that quarter because this time, it's saying FY '25, so I assume it's 1Q because it's easy. But usually, in 2Q, 3Q also, it says FY '25, then we get confused whether it is for the first 3 quarters or only for that quarter. Just a suggestion to make it more clearer in the production performance slide, sir.

Yes. We have noted your suggestion. We'll do the needful.

Sir, I just wanted to understand more about this stock valuation. I think it is more of a finished goods valuation. So is it more that we have valued the inventory at the current prices or what we have done with the stock valuation? Because for the first time, we are hearing in the -- we are getting the adjustment from your side that in SAIL, we are seeing the stock valuation thing? It is related to coking coal only?

No, let me answer this question. Actually, stock valuation is there everywhere, every time by every company, it is done by every company, it's a part of the P&L account. And now in this year, because there's a transition from last year to this year and as all of us know, coal prices are down. So when the coal prices are down in quarter 1 as compared to average of last year by around INR6,000 or whatever it is, based on that, the cost of production is also quite less. And since cost of production is less and our stock valuation is taking place with respect to cost of production, not NSR, that is why there is a hit on the stock valuation rate in stock accretion and decretion. And this impact is around INR1,050 crores quarter 1 versus quarter 1 and around INR950 crores quarter 1 versus quarter 4. So this is just onetime true-up of the stock valuation rate in the stock accretion-decretion. It is mostly related to the coking coal. But the cost is not only decided by coking coal, it's based on the efficiency and other things, but impact of other items are pretty less as compared to the imported coal.

Okay. And secondly, on the capex side, sir, have we got the approval from the Board on the capex side because we were telling that -- we were guiding that there would be new capacity announcements and all that sort, and we would be ordering -- placing the orders for that capacity, so any update on that part?

Yes, we have got it approved. INR7,500 crores for this year is approved by the Board, and that is our target. And as you have mentioned about the new capacities, we have got the expansion plans in pipeline. And the tendering activities are going on in IISCO steel plant, wherein we are planning to have 4.5 million tons expansion over there. And as I have already explained that the expenditure in that will generally start from the next year from '26, '27 because the orders will be placed and then the other activities will start from next year, and that is how the expenditures will start coming from the next year regarding that expansion. And back-to-back, we are planning expansion in other plants as well in other facilities, so those things will also follow going forward.

Okay. And this IISCO will be roughly 4 million tons new capacity and some debottlenecking, right, 0.5 million ton debottlenecking? Yes. So total, we are looking at some -- I mean, for IISCO only, what would be the total capex, somewhere around INR30,000 crores, INR35,000 crores? Okay. And sir, we'll be spending over 3 years, right, FY '27, '28 and '29? That's broadly...

Yes. You can say, ballpark 4 x 9,000, it will be INR36,000 crores. It's spread for 3 to 4 years. Actually, after order placement, actually, it is around 36 months. That's the guidance.

Just a clarification. Just one last one. For this volume guidance of 17.5, are we including NMDC volume in this or not including?

18.5. Yes, that is with respect to SAIL products, our products.

Sir, my first question is towards this railway pricing, this INR74,000, which you said that is finalized right now, what is the cost of basically production cost you are factoring, especially the coking coal? Since coking coal has been declining, is there a risk of this pricing coming down? Noted, sir, but then is there -- because coking coal prices have been come down significantly. Is there any cost advantage, which we need to pass on to the railway in the subsequent quarters?

See, let me try to clarify this point. Actually, this cost is done after -- is prepared after completion of the quarter and year, and then it is also examined by different levels and then it will be done. So the point of INR74,000 what you said is basically provisional guidance. It has nothing to do with the actual prices. Yes. Because if you remember, if you go back to 1 or 2 years back till the prices of rail price -- the price of rail was pretty high as compared to what we are looking at right now. And so this cost examined by a competent authority at the government level and after thorough investigation, examination records, cost records and everything and accounts, everything, it is finalized. So the reflection of imported coal price is coming into the rail price itself after examination by the competent authorities. That is how it is coming. And as coal prices softened, so the rail prices also softened that you must have already seen. Going forward, because the coal prices are at this level, so things will also be at this level.

Noted, sir. Sir, in terms of our finished goods inventory, how much of inventory we are carrying? And is that inventory is at the closing price of 1Q level, so there is a risk of markdown of these inventories as well going forward?

Yes, let me answer this question actually. We are holding around 1.7 million tons of saleable steel and 1.3 million tons of in-process stock. So these 2 put together steel stock, it is steel stock. And it is trued up to quarter 1 cost right now, which are almost at a very lower level. That's the reason why the stock valuation impact has come as we've already explained. So going forward, we do not see any further reduction in this. There could be improvement, but no reduction.

Got it. Just one more question. Where are we in terms of coking coal inventory right now? And where is it compared to normal inventory days?

Yes, let me tell you actually, coking coal inventory right now is around -- hovering around anything between 25 to 30 days in the ports and could be around 5 days in the plants. So those are at the normal levels that we generally expect. We try to maintain those levels of 25 days, something like that -- hovering around that. So right now, the stocks are also at those levels.

Just wanted to clarify the NSR, what is the blended NSR for this quarter? And what was that in the fourth quarter? And for July?

For this quarter, the average NSR is INR51,700 per ton. INR50,100. And for July, this figure is expected around INR50,000.

Okay. Then on the coking coal side, you mentioned the blended coking cost was INR16,900. What was the imported coking coal? And the imported coking coal was INR18,500 in the fourth quarter, is that correct?

This is -- imported coking coal is INR17,600 and average was INR16,900. In fourth quarter it was INR18,500, you're right.

All right. And just last question on the inventory, that number, 1.7 million finished and 3 million total, what was it in the March quarter?

In the March quarter, it was 1.7 against 1.4 and 1.3 was 1.3. So basically, March quarter was 1.4 plus 1.3 and 30th June is 1.7 plus 1.3.

Sir, this NMDC steel, you said only revenue and this raw material line gets affected in PP&L. There is no thing in other expenses, right? Or is there anything in other expenditure also because this quarter's other expenditure seems to be on a -- little bit on a higher side, even if I look at on a per ton basis? Because of the iron ore royalty?

Yes. There is nothing of NSL in the other expenses. The other expenses are higher compared to last year quarter 1, primarily because of the royalties. Iron ore royalty, yes.

Okay. And the tendering process at IISCO had started last quarter, so how long do you think this will take? So order placement, do we expect by third quarter or fourth quarter?

As per the scheduled dates given by them actually, order placements will take place in '25, '26. Yes, end of third quarter and fourth quarter, all of fourth quarter. I mean, the schedule is December, January like that.

Sir, one quick clarification. On the stock revaluation of INR950 crores, how much of it would be because of coking coal and how much of it would be because of finished steel?

I mean it is on finished steel -- it is on steel only, finished as well as in-process put together. And the reduction in the cost, which has given INR950 crores of adverse impact with respect to quarter 4 is primarily because of the imported coal price.

I'm not able to understand. Understood. So then is it fair to say that as the imported coal rates increases, then the impact to us would be much lower because then we will get a revaluation benefit on the upside?

Because the imported coal prices come down around INR5,000 to INR6,000 per ton. That is why the cost of production is also down in quarter 1 as compared to quarter 4 as well as previous year quarter 1. That is why the stock valuation rate, which is equal to the stock valuation cost, so it has come down. And it has got an impact of around INR950 crores with respect to quarter 4. So the reduction of cost is primarily what accounts for the imported coal rate. Yes, of course, going forward, suppose the stock is lying over here, a similar quantity or less quantity or more quantity. And if coal prices go up, then the stock rate will also increase. And that will also increase the positive impact on this also.

And if I look at the next quarter versus this quarter, so we will not have this INR950 crores of impact, then INR250 crores of additional royalty or excess royalty because of the iron ore price, IBM prices are now more or less flat. So that should not be there. And then there will be a negative impact because of realization. Is that the 3 variables that we should look at for the next quarter?

These are the 3 basic reasons -- basic variables.

Yes. Thank you, Hamshad. Sir, before we ask for the final call from you, just last question from my side. One, when you are talking about stock valuation impact, definitely, that's there. But in other expenditure also, we are seeing it's on a much higher side because more or less fourth quarter versus first quarter, it was flat despite the fact that volume was lower. So we are more concerned about the higher other expenditure as compared to what it was in the fourth quarter. And secondly, in terms of valuation, when we are talking about, it's INR950 crores, assuming that nothing changes in second quarter, only price variation is there and cost is not going to change, then definitely, second quarter versus first quarter, do you think that our earnings will be deviated only because of the price change -- steel price change?

Yes. Let me answer one by one, actually. So far as other expense is concerned, other expense within other expense, one of the major components is royalty. Apart from that handling and other expenditures are also there. So in the royalty front, because of the IBM price movement, so these figures also change. In quarter 1, the figures are higher. That is why other expenses figure is higher. But this may vary from quarter-to-quarter depending on the IBM prices. Now coming to the stock valuation rates because that was a onetime kind of a hit in quarter 1, so that it will not be there in quarter 2. So it will give us a relief in quarter 2 and going forward, so the variability will be, again, be primarily driven by the NSR front, in the NSR front, and we are hopeful that we'll be doing our production and technological parameters as per our own guidance. So primarily the NSR, which will be driving the fluctuation.