Aia Engineering Ltd (NSE: AIAENG) Q3 2026 Earnings Call dated Jan. 30, 2026
Corporate Participants:
Sanjay Majumdar — Executive Director, Corporate Affairs,
Kunal Shah — Non-Executive, Non- Independent Director
Analysts:
Unidentified Participant
Priyankar Biswas — Analyst
Bhavin Vithlani — Analyst
Presentation:
operator
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Sanjay Majumdar — Executive Director, Corporate Affairs,
Moderator.
operator
Yes sir.
Sanjay Majumdar — Executive Director, Corporate Affairs,
Something wrong with the line. I am Sanjay Majmodar. Murali Nayad was the coordinator. So we have myself, Sanjay Majmudar and Kunal Shah joining on the call.
operator
Yes sir. Murali sir, your line is not clear properly. Hello murali sir.
Sanjay Majumdar — Executive Director, Corporate Affairs,
Am I audible?
operator
Yes sir. Now you’re loud and clear.
Sanjay Majumdar — Executive Director, Corporate Affairs,
So have we started the call?
operator
Yes sir, go ahead.
Sanjay Majumdar — Executive Director, Corporate Affairs,
Yeah. So. Good afternoon ladies and gentlemen and welcome to the Q3 result call of AI Engineering. I’m Sanjay Mahmoudar and as usual myself and Kunal we will be taking this call. Unfortunately Kunal is slightly stuck in traffic and be joining in next two to three minutes. So in the interest of the time I will just as usual give a little overview of the Q3 numbers. I’m assuming that you all would have a chance to have a look at the numbers. As you will see in this quarter we have done around 67,896 tons of production and 64,500 tons of sales.
Cumulatively therefore for the nine months period this comes to almost 187,000 tonnes of production and almost a similar tonnage of sales. The overall top line in terms of the operating revenue stood at about 1066 crores. And including other non operating income we reported about 1200 crores. As a top line the reported EBITDA is about 425 crores which comes to almost 40%. And the operating EBITDA is around 28%. After knocking off the other non operating income we have reported a PAT of about 8800. We have reported a PAT of about 294 crores after deducting the minority interest.
Correspondingly for the nine month period the EBITDA stood at about 1093 crores and the PAT stood at about 775 crores now if I look at the numbers in retrospect I have just. Kunal has just joined. So Kunal, we were just giving the overview of the numbers for the three and nine months period.
Kunal Shah — Non-Executive, Non- Independent Director
Yes. Good. Good afternoon. Good evening everyone. I also have a bad throat so you’re going to hear more of Sanjay than I have. I will. You will ask me. This quarter has been relatively uneventful period. I think we continue to do more of what we are doing. Very little in terms of market or business updates. I think it looks to be a year when or rather a period where there is tremendous amount of unstability around us and possibly the best course of action is to fasten one seat belt and make sure that we survive this period and we consolidate ourselves and to make sure that we thrive with everything else that we are doing.
Sanjay Majumdar — Executive Director, Corporate Affairs,
Just a small correction. The nine months PAT stood at 876 crores and the exit today 1241 crores. On the top line of about 3153 crores. And the total income of 3495 crores. You may continue.
Kunal Shah — Non-Executive, Non- Independent Director
Exactly so for the quarter we’ve done about 294 crores pack and 425 crores because the numbers continue to reflect all the value that we bring to the customers and all of which forms a basis for what we’re doing for new customers within the mining environment. Mining customer base. Moving on. As far as other income is concerned the total stood at 135 crores. There is a reasonable amount of foreign exchange gain as the currency as we all know has moved beyond 90. So there’s a 50 crores of foreign exchange gain. The rest is standard and customary.
There’s an 18 crore export benefit and there is a Treasury income of 83 crores. A total of about 135 crores of other income. We are assuming that foreign exchange and export benefits are operational in the nature that you know then the next year the other in the foreign exchange gain will move into a previous line item. Assuming all our invoicing it looks like currency may not appreciate much from here. May continue to slide. As we all know with the Indian rupee vis a vis the dollar situation is concerned that stood at there was about 67 crores.
So there is a marked increase in other income compared to the third quarter last year. I think everything else continues working. Capital is in line from volume standpoint. Volumes still reflect a little bit of issues that we’ve discussed over this period. So third quarter is at par with the third Quarter last year and nine months is also similar. So we are absolutely having absolutely similar numbers in both these periods. We did 187800 tons for nine months and about 64,500 in this quarter. Otherwise you know numbers are comparable within mining and non mining. Sanjay bhai will speak a little more about, you know, how this forms, you know, what are the basis and things that we are looking at.
Broadly businesses. As is from everything that we mentioned, you know, realization is similar. Our cash levels continue to be around 4200 crores. We’re not looking at significant capex beyond maintenance and some bits of remaining capex from our casting plant. One highlight was the fact that we closed our plant in closed the plant of a subsidiary in Bangalore called Velka Steel and that reflected 24,000 tons of capacity. So we were at 460,000 tonnes which was 340 of grinding media, 120 of non grinding media. The grinding media now stands reduced by 24,000 tons. So 314,000 tonnes and 120 of castings taking a total capacity from 2,430 6,000 tons.
This year we’ll do at current run rate about 250 to 60,000 tonnes. So we are still operating reasonably below full capacity utilization. And our facilities in Ahmedabad we can look at more capacity as brownfield plus our plans to go build things outside of India as we discussed in Ghana and China. So with that said, even after the plant, even after that capacity going off stream it looks to me that we are okay as far as serving our customer base and serving our growth needs are concerned as far as market is concerned. Like I said, you know, just serious amount of uncertainty across the board.
Every country is doing, you know, things in its own, you know, trying to protect its own interests. There is lots of uncertainty around geopolitics with wars being raised in several regions. Something that’s going on with Iran right now, the southeast. So shipping lanes continue to be fragile and high wired. So that’s also a risk in terms of container availability, shipping line availability, shipping time and of course the volatility in shipping costs. So having said that Justin, just reflecting back on what are we doing with the customers. The world is continuing to go put borders, duties, protection measures.
How does a company like aia, you know, thrive and grow? What is the mindset? So we are saying that if that is the world that we live in, which is protectionist in nature, how do we look at our strength, you know, vis a vis incumbents or competition. And one of the facts is that India remains an extraordinary location for our type of products. You know, which is not just production or hands on the factory but it is the whole value chain which is design pattern making, production, you know, customer interfacing, the whole service and metallurgy aspect and of course our production, I mean the ecosystem that exists in India for these type of products overall and the solutions that we have built on top, you know, give us the confidence that despite what may happen, despite these turbulences that we are seeing on the ground, you know we all are seeing the serious surge in metals, precious metals, gold and silver.
And there is a significant talk about what happens to copper. And we were reading about how the world has mined x amount of copper in last, you know, from till the time humanity came started mining that amount of copper will needed to be mined in next 20 years just to continue a 3% growth rate. So there is just unreal amount of stuff happening. Copper looks to be in a structural bull run. The world will run out of copper with the way it’s projected to be. And copper production is reducing in tonnage standpoint every year, every month just because of the great condition.
And looks like we are one of the only game in town addressing this serious problem. So we are very excited of all our solution interface and engineering that we are doing in terms of solving those issues, solving those critical challenges for our mining clients, especially gold and copper. And with that said we have to, that does not, you know, absolve us of overcoming these duties and shipping related issues or the general overall conservatism that we see the customers in having to try out different solutions. All we can do is continue to reinforce our efforts, ensure that our solutions become, you know, more and more deeper and bring more value addition to the client.
And we are hoping that unlock happens. We announced our first Chrome customer in South America and that’s the first Chrome consumer in the mining space. A lot of people then asked us will that mean hundred thousand tonnes coming up? I think our guidance will continue to abstain from a guidance and we’ve explained that because of the lack of clear signaling from the customers on what means liking the product or getting the proof of concept to moving to full commercial engagement. There is a whole lot of steps involved and we don’t want to be in a situation where we go ahead of ourselves.
So we’ll do the work, we’ll see the tonnages coming on and we’ll keep sharing as much as we can but and share as much about the business. But you will have to pardon us for not being able to share volume guidance at this time. So you know, besides the developments, you know, within the wind that we had last quarter, we do several trials, you know, we are working on several trials. A lot of, some of some important trials which were, which we were to get results of last quarter look to have moved to, you know, this quarter, the March quarter.
And that’s just the way, you know, things are at mining end. You know, there is just a lot of unpredictable, you know, variables that we work with. So trying to say will we see clarity in three months, six months or two years is not also a question that unfortunately we’ll be able to help. We are hoping that the numbers that we have presented and everything else about the business reflects the kind of effort that we are making to bring value. That’s I think the singular mission of our work where there is disproportionate value that we try and bring our customers and that’s one of the outcomes.
There is the financial numbers that we just presented and hopefully that will translate into sustainable growth going forward. With that I’ll have Sanjay Bhai or maybe we can just go into qla.
Sanjay Majumdar — Executive Director, Corporate Affairs,
Yeah. Just to add very quickly, as Kunal mentioned in the last call, we had indicated that some new solution package, solution oriented trials are going on. I want to say that the trials are progressing positively. Only thing is it is taking a little more time given the complexity and the technicalities involved for us to get the result. But we are positively and quite excitedly working towards it. And that is the reason why in terms of opportunity it remains the same. I think our uniqueness remains absolutely intact. The trials are going on satisfactorily. So let us hopefully wait and watch till we get the final outcome.
With that I would request the moderator to open the house open for Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question may press star and one on the touchdown telephone. If you wish to remove yourself from question Q you may press star N2 participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Zita Fernandez from New Asset Management. Please go ahead. Yes, Mr. Fernandez, go with the question please. As there is no response, we will move to the next.
The next question is from the line of Varun Jean from Dalit Capital. Please go ahead.
Unidentified Participant
Yeah. Hi, good evening, sir. Am I audible?
operator
Yes, sir.
Sanjay Majumdar
Yeah. Yes.
Unidentified Participant
Yeah. So sir, I wanted to ask you in your Mining volumes which are close to 40,000 MT per quarter. How much of it is in India and how much of that is to. Approximately how much is of that is to Hindustan copper.
Sanjay Majumdar
Sir, we, Mr. Jain, we don’t give client wise details, but broadly you can say that if you look at the mining volumes on an average around 3 to 4,000 tons maximum would be from India. Rest all will be from outside India. But we’ll come back to you, just give me a moment and I will look at the numbers. But most of the mining volume is from outside India.
Unidentified Participant
Yeah, yeah, no, I understand that. So since in the initial remarks you were saying that, you know, there’s a lot of geopolitical uncertainty
Sanjay Majumdar
Indian, I would. Say that annually the Indian mining run rate would not be more than 10 to 12,000 tons a year.
Unidentified Participant
Yes, but sir, like Hindustan copper, they have said that they will increase their capacity from 3.5 million metric ton to 12 million metric ton by FY30,31. So that represents a big opportunity for AI. How do you see, like will, will that give us 30, 40, 50,000 metric ton structural volume increase over the next five, six years?
Sanjay Majumdar
Sir, if I been very honest with you, our fundamental focus in mining is actually the opportunity outside India. The reason is we are looking at very large, much, much bigger markets like Latin, where, you know, between copper and gold we are talking of at least a half a million ton kind of an opportunity on which we are working. Similarly, you look at Australia, similarly you look at some of the other markets, the key other markets being Africa, cis, et cetera. So my point is that if you look at your sales, coming back to your specific question, mining volume in the domestic market in the third quarter was about 5,000 tonnes and nine months period.
The mining volume one second. Where is the nine months? Yeah. So on that run rate basis you can say that in nine months the volume was about 18,000 tons in mining in India.
Unidentified Participant
So sir, my question was that only though then for like 3.5 million empty of Hindustan copper, if this is like 20,000, so that’s a big number, right, for if they like quadruple in the next five years. So if you can also 3x or 4x these volumes, do you think that is possible? Specifically I’m asking for.
Sanjay Majumdar
No, no. So let me, let me give you a very simple perspective. As I said over the previous calls, also we are currently focused on all these markets where the opportunity is significantly large. That doesn’t mean that we are not looking at India. So wherever in India there is an Opportunity Hindustan Copper Doubling or tripling the production of copper is something that as and when we move ahead we will definitely evaluate and see what best we can do. But as I said from a growth driver perspective it is the mining opportunity outside India is where our maximum efforts are concentrated.
In fact for that matter even iron ore production is going to go up. So I’m not saying that India is not really a country of focus but from a global perspective the opportunity wise we are focused on markets which offer much much bigger opportunity. At this point in time where we are already being engaged and we are working very aggressively over last several quarters we are working in India, we have taken a lot of trials in India, we are supplying in India. That’s why if you see my volumes have grown from you know, quarter to quarter we are currently in the run rate in India also as I shared the numbers, this number but I’m very clear the focus is outside India.
Unidentified Participant
Okay sir and my second question was on capex so FY26 I think you guided close to 180cr out of which 105cr is done. So will balance 75 be done in Q4 and what about this China and Ghana like any timeline on that. Balance the 75/80 May around 30 crore is for our new solar hybrid capacity which is committed and which is hundred percent going to happen in Q4 plus certain CapEx I would say a realistic number is in the range of about 50 to 55 but let us see we are working on it for Q4 and. Said China and Ghana. China and Ghana.
Sanjay Majumdar
See we have already we are in the process so land is procured in Ghana we are waiting for certain clearances from the governments so that work. But that is not going to be significant in Q4.
Unidentified Participant
No, no sir, not I was not asking for Q4 I was asking what is the outlook like when is the plant by when will the plants come up That was the question ?
Sanjay Majumdar
we believe see in China we have in Ghana we have currently procured the land, done the site development and are waiting for certain clearances from the government which I am expecting to happen in this quarter. If that happens then over next one and a half years we should have the Ghana Capex in place. China we have initiated the process we have set up a small lab also in China and we are in the process of evaluating and finalizing the plans. But you can say over next one and after two years we should have both the facilities in place.
Unidentified Participant
Okay sir and this my last question so last call you said that two large mines were in advanced stages and 10 to 12 others were in medium stages. So what is like what is the conversion and is this midliner driven approach working and what is the midliner capacity utilization for nine months and Q3?
Sanjay Majumdar
See, mill liner based approach is the focus on which we are working right now. As I mentioned, Kunal mentioned and myself also I mentioned in the initial opening remarks on the call that the progress is happening satisfactorily but it is taking a little time. So we are waiting. There are certain technical matters which we have resolved. And then again those trials are progressing quite satisfactorily. The process has taken maybe, maybe two, three more months. So let us wait. There is nothing more that I have to add but it is continuing.
Unidentified Participant
And sir, capacity utilization of mill liners.
Sanjay Majumdar
Capacity mill liners also see capacity utilization currently working at around 50%.
Unidentified Participant
Okay, okay. For this is for nine months or Q3.
Sanjay Majumdar
Nine months. Nine months.
Unidentified Participant
Okay sir, thank you and all the best.
Sanjay Majumdar
Thank you. Thank you.
operator
Thank you. The next question is from the line of Priyanka Vishwas from JM Financial. Please go ahead.
Priyankar Biswas
Yeah, hi. Kunal bhai and Sanjay bhai. So quite a steady quarter I would say. So my first question is regarding again coming back to the trials. So essentially like for the sort of the large two minds that we were on very advanced stages. So. So we should be expecting the results in the coming two to three months is what you are saying. Right? If I understood it correctly.
Sanjay Majumdar
Correct.
Priyankar Biswas
Okay. And one, the thing is I want.
Sanjay Majumdar
To clear at least one mind in next two to three months. The second mind could be maybe four to five months.
Priyankar Biswas
Okay, that’s even clear. Okay. And I also wanted to understand, let’s say how the forex effect works here. So just for my understanding, so how much let’s say of your sales currently like a ball. Ballpark amount will also do. Like is USD denominated? The reason I am asking is like a lot of your costs are INR denominated here. So eventually because there is a sharp depreciation. So how should we see the realizations? Let’s in a rupee term going forward. Like in that sense.
Kunal Shah
Hi, Priyanka Kunal here. So I think three, four aspects to this and I think we’ve shared this, you know, over currency conversations in the past. We are not, we are not an Indian exporter who benefits or loses on account of, you know, the dollar change. Because generally you know, so first of all our transactional currency is US dollars. We are not dealing with, you know, we’re selling to 140 countries. But we are at best dealing with a Canadian dollar or a euro or an Australian dollar or a US dollar. So you know, most of it is US dollar.
So most of our exports transaction currency is US dollar. But the importing country generally would have seen a similar change like India has when we sell to Australia, when we sell to Brazil, when you sell to all these countries. And my and large is the rupee. So if I’m, if my cost is thousand or selling price is thousand rupees at 80, I was selling it, let’s say, you know, $1200 at 92, I’m selling at $1150 or 11, whatever the math is. So yes, we do get to keep some, you know, difference when it’s weakening. We do see a, you know, we, we do keep to get to keep some part of that.
Right. But by and large it’s a pass through. So currency for us is a pass through because it allows us to be more competitive, allows us to be at our optimal best. You get it. So when it appreciates or it depreciates like with raw material, there will be a lead lag effect before it all passes on. But in a way I don’t think you can take a number and say currency is gone up 5%. So my margin will go up 5%. Basically that’s what I’m saying. There’ll be some, there’ll be some remnant of a legal lag that will be there for next two or three quarters.
Our endeavor is to make sure that it becomes a cost mode rather than a margin. Conversations.
Priyankar Biswas
Okay, so maybe like what is the relative performance of the other local currencies also comes into the picture. That’s what I understand. Also like since you, I, I think I heard during the con when you were making your opening remarks. So if I had it correct, like almost 4200 crores of cash you have now, I believe even this cash, it would also be largely USD denominated or is it like a domestic currency
Kunal Shah
Outside. Of India we only have transactional operating cash which is less than 10% or 5% of the money that most of our investments are in Indian rupees in India, most of it.
Priyankar Biswas
Okay, and just one more question. If I miss cuisine recently, recently we are hearing talks about the UFTA that has happened like the mother of all days. So can you highlight like what sort of tariffs that you or, or duties that you are facing in Europe at present? And so if that deal translates like over a period of time, would there.
Kunal Shah
Be any Benefit we don’t sell to Hermes or European luxury houses. Our customers are mines and cement plants. And generally Europe is not, you know, a very active, you know, a player in, in these fields. So Europe FTA by and large are neutral to does not change anything materially for us.
Priyankar Biswas
Okay, that’s very clear. That’s all from my side.
Sanjay Majumdar
All right, thank you.
operator
Thank you. The next question is from the line of Dangsha from DD Enterprise. Please go ahead.
Unidentified Participant
Yeah, hi, good afternoon. Am I audible?
Sanjay Majumdar
Yeah, yeah, yeah.
Unidentified Participant
So the main question is currently if I’m not wrong, we are utilizing the CAPEX utilization. The capacity utilization is around 75%, right?
Sanjay Majumdar
No, overall if you see around 60 to 62%, see plant wise it will differ but around you can say average 60 to 65%.
Unidentified Participant
Okay, so now the thing is like if the global markets, the mining business is boosting up currently what we can see from last two quarters, the mining businesses, the commodities are selling very good at the prices. So is it any like further can you remark us like if not capacity utilization grows up by 75 or 80% or 85% the EBITDA level, what we are posting currently is 27%.
So that will also increase or any plan like the capacity utilization to expand more.
Sanjay Majumdar
So Devan, there are two different types of questions that you have posed. The first part is are we linked directly to the fortunes of mining industry? So currently you said that the prices of commodities are on the rise. Does it create a separate set of an opportunity for us? Very honestly we are a little agnostic to the mining industry cycles. What we are focused on is this conversion opportunity. So just to recap, you know on the gold, copper, these are the three main metals on which we are focused.
Worldwide market is huge. Market for consumable is maybe more than 3 million tons. But the addressable market for me on which I’m focused right now is maybe 1.5 to maximum 2 million tons. The penetration is 25, 30, 35% penetration of high chrome based solutions. So it is this sweet spot of 11 1/2 million tons on which I am focused for conversion. Now therefore when I am talking to the mines for conversion I am talking on three aspects. One, I am saying a very simplistic thing that if you are consuming currently 8 to 10% of your total conversion cost is your consumable ware part that I’m supplying because my warehouses are very lower, I will reduce this consumption by 2030% so that your cost comes down to that extent.
That is point number one. More importantly it is the entire grinding and crushing efficiency in the mining on which I am focused. Therefore I am working on two aspects. One, improvement of throughputs. This is very complicated. We started off with segments. We are currently focused on some very unique centric solutions on which we have been talking about over last two quarters and we are still very excited about it. In terms of though progress is slightly slow, opportunity is very positive and it remains in that trajectory. Only thing is a little uncertainty as to what exactly when exactly we can start talking about the volume growth, etc.
That’s why we are quiet about it. That is one second is significant reduction in the other operating costs like power etc. So you, you improve your throughput, you save power cost and you also incidentally save on certain other consumable costs associated with beneficiation process like you know, signed, etc. Our entire focus therefore is now a combination of unique liner plus our unique high chrome grinding media going as a package. So my point here is that whether a mining industry cycle is an upside or a downside, the benefit that I am offering is much, much materially different than anything linked to cycle.
This is the first leg of your question and the second part of your question was that whether I will get the benefit of operating leverage. You see, currently we are doing a very decent EBITDA even at the operating level because of very favorable product mix and a very controlled side of a cost. At this point in time we haven’t done any major exercise. But if theoretically volumes double, then of course there could be some improvement. Having said that, whatever volumes are driving this growth, if it is more of a grinding media, it could be a different issue.
So I would say we are refraining from any guidance on the margins. We are saying that we are operating at a decent margin and we want to continue operating at that level. Of course our guidance per se on an operating side at a much higher volume is actually lower. We are talking of 23, 24% and not even 27%. But that is actually not a function of operating leverage. It’s a function of product mix.
Unidentified Participant
Okay, so it’s possibly for next 3, 4/4 the capacity utilization will also not increase drastically.
Sanjay Majumdar
I would not want to comment on that honestly because if.
If my. If the way I am working on, if suddenly I get opportunity, I can increase my capacity utilization.
Unidentified Participant
Okay, that’s all from my side. Thank you very much. Thank you.
operator
Thank you. The next question is from the line of Bhavin from SBI Mutual fund. Please go ahead.
Bhavin Vithlani
Good evening, Kunal. Bhai, Good evening. Sanjay bhai.
Sanjay Majumdar
Yes, good evening.
Bhavin Vithlani
Could you give us a bit more flavor on the non grinding media piece which is the liners out there? Especially if you could give us some. What was the output on the metal liners and what was the output on the hybrid liners that were. We’ve kind of expanded. Where are we in that journey and what’s the kind of growth we are seeing in that segment of the business?
Kunal Shah
Got it, got it. So I think clear, the strategy seems to be reasonably clear now on what we are targeting and how we are going about it. As part of that, which is the whole gamut of lining solutions, it becomes an intelligent interface so that golden copper miners can see increased throughput. All of that that requires us to go through a whole trial journey right where we are. We don’t have case studies. There is, there is resistance to doing a grinding media upgrade from forged to chrome because you know, where there is zero process change, there is zero equipment change.
It just needs a forage process. Then the lining conversation becomes a little more, you know, the challenge quotient increases a little more than just the grinding media conversation. And the good part is there is a whole trial journey, right? So where customers are finding customers who are, who have the most at risk from these issues, which is throughput, drop and other things. And so we are in various phases of trials and like you go into a trial, these are all unchartered projects. There is learning, there is one more iteration. It could be a design iteration, it could be an alloy interface or it could be the whole solution that we have put together which includes a few other elements.
Right. And all three put together is what makes it a little uncertain as far as timelines are concerned. So the short answer is that lining, the whole lining solution that we have now put together and which we are hoping allows us to break through to sell linings plus grinding media together as a solution, is going through very serious trial journey. This is in addition to doing work on the grinding media and the conversion, right? Where we are saying, so liners, we are trying to. It’s easy to fill the factory and say I’ve got 30,000 tonnes more of linings.
But if that is not part of the solution and I’m just doing what the incumbent is doing, that does not further my goal, right? The goal is not to sell 30,000 tonnes or more liners and make 200 crores of more profit. The idea is to sell 100,000 tons of liners plus grinding media as a solution and bring disproportionate benefit. And all of that happens as part of the solution. So that’s the medium term to long term strategy. And as part of that all I have to report is that we are undergoing various trials. You’re hoping some where we have done well, where you’re going to stage two.
Then somewhere we may have a redesign or a re intervention in one of the three things that I said and others awaiting either trial timeline or production or supply. So it’s within the trial stage as we speak.
Bhavin Vithlani
Sure. And what if you could give us some indication in terms of the percentage of the volumes coming from liners? And basically we have both the metal as well as the hybrid piece.
Sanjay Majumdar
So by the way, as I said in reflect to a previous question that we are currently operating at a little lower than 50% of our rated installed capacity. In fact, if you look at rubber and composite, that is relatively newer capacity that we have created. This is a blended in fact that that particular capacity is still available even. At a higher level. What we are trying to say that as soon as this ball mill related trials are over, there could be a significant uptake in the volumes of liners which will also drive my grinding media. That is the whole story. You get my point. Focus is now on value creation rather than just pushing the volume of grinding media. And grinding media pushing is an incidental benefit I will get because of the uniqueness of the solution. So it’s what I approach. Hamara Igdam Pisle Tinchar Quarter says we have done this renewed strategy which for which we are working very hard.
Enough capacity is available. If I have to ramp up, I can easily ramp up further without any difficulty. Today it is not a question of capacity utilization. Today is a question of getting that significant breakthroughs which once that happens things can turn around dramatically. That’s all I think we will say at this point in time. Please give us some more time.
Bhavin Vithlani
The other part is, and please correct me if I’m wrong, South America is the larger producer of the copper globally and to our understanding and please correct me, 40% of the end market for grinding media and liners is the America market where we have a negligible presence as we speak and we have got some breakthrough over there now in case we are successful, which we are then given that the size of the market, that is we will quickly be running short of the capacity. So is that something that is there at the back of the mind that maybe some land etc has already been acquired and we can quickly ramp up? This is the Best case, while we have the last four years has been difficult, we understand, but do we also have the ability to pick up very fast in case the South America goes well for us?
Sanjay Majumdar
I think so. The thing is that with the work that we have done for China and Ghana, right, which is modular plans, a lot of that is quick setup as we speak. I think our capacity to set up production facilities, you know, is reasonably there. Plus we have our plants in Bangalore and Trichy that, you know, we can ramp up and put together. So I don’t think capacity is going to be a constraint at all. If you’re seeing next 50, 70, we will not wait to get to 400 before we start thinking of a new plant.
Right. In fact, the day we cross 300, 330,000 tonnes, by the time the next hundred comes, we’ll have the additional capacity up and about. So absolutely. Customers, in fact, want to make sure that we’ve got the capacity, that any interruption does not make them suffer around it. So, yes, we think about it and there is a reasonable plan in place to not. If that good outcome happens, we will. It will not be because of the lack of capacity that we fall short.
Bhavin Vithlani
Great. Those were my questions. Thank you.
operator
Thank you.
Sanjay Majumdar
Thank you.
operator
The next question is from the line of Varunjain from Dalek Capital. Please go ahead.
Unidentified Participant
Yeah, hi, sir. So just piggybacking on the previous questioner’s question. Who is your biggest competitor in this mill liner business?
Kunal Shah
Yeah, there are three or four incumbents. There is Elect Metal, there is Bradkin and there’s a OEM called Metro. And then there is one more company from Indonesia. There are four incumbents who do mill linings, but these are all conventional, so there’s no design element. It is just using the design or the spec that came with the mill whenever it must have been installed.
Unidentified Participant
Okay. And answer in this. There is no dislike in, in your grinding media business. You are trying to convert them from say, you know, forge to high chrome. Here, you know, you are not, you are supplying metal to metal, composite to composite like that. There is no conversion element in the mill liner business, if I’m understanding it right, there is.
Kunal Shah
So conversion is not in the alloy side. While that could also be part of the conversation, we are doing our own design. So the conversion, in a way, is where we are moving from whatever is the incumbent design to our design. And when I say our design, it also includes certain other elements that together become a solution. So, so there is a conversion element, if you will, you know, which is where someone Uses a new element from what they are using currently. So I don’t know if you want to call that conversion or not, but we are not per se doing incumbent design and just producing them and supplying that.
So whatever work that we look to look to do will be our design product.
Unidentified Participant
But the metallurgy is not what you are targeting for the mill liner, right?
Sanjay Majumdar
Generally not. Generally not, no. It is also, it is also part of the conversation, but that’s not what we are leaning with in your right. In grinding media our mainstay is to move from forge to chrome, which is a metallurgy conversation. There are other elements, metallurgy could be one of them.
Unidentified Participant
Got it, got it. And sir, there’s two housekeeping questions. So one is on this usp. So with the tariffs and all, have you seen any customer drop off?
Sanjay Majumdar
It continues as is but it’s a punishing duty. But for now the customers are paying and importing the product. Not sure what it means going forward.
Unidentified Participant
I mean it’s very commendable that you know, with such high tariffs also they are if there no customer drop off really shows you know that your product is very hard to replace for them. And just this last question, sir. Fi27, I think in the last quarter conquer you had said that you know, you will expect to get back to that 25 30,000 empty volume run rate. So for FY27 28, can we build that in that much?
Sanjay Majumdar
I think so at this point in time. But you know, the bigger issue is not this 25, 30,000 tonnes. The bigger issue is how much we can do as a market share the way we have done in cement and how we can grow on a medium to long term. So one is of course you know, this year looks flat but over last couple of years we have been struggling on various fronts. So now this novel solution and the novel package that we are offering, we are looking at something very, very different. Radically different than this run rate of 2530 that we are talking about.
So I think yes, that much we are not really worried about that 25 30,000. What we are looking at is something very, very radically different. That’s what we are trying to say.
Unidentified Participant
Okay, okay, okay. So that’s all from me. Thanks. All the best.
operator
Thank you. The next question is from the line of Abhab Shah from Equerious Securities. Please go ahead.
Unidentified Participant
Yeah, hi, thank you very much for the opportunity. So my first question is on the chili order. So could you clarify whether the optic has already been started or is yet to begin? Also how should we think about the likelihood of this order converting into recurring basis post the completion of this optic? Yeah, so we have started supply. So Q3 includes supplies to Chile and of course it’s over 18 months. So, you know, that way it will continue and we are pretty confident that it should continue on a recurring basis. Okay, second question is on that.
Since this is only a grinding media order, so are we also doing trials or discussion with them to expand into package solution going forward? And apart from these, the anticipated two or three orders in the next two quarters, so would they only be grinding Vidya or will it be as a package solution?
Kunal Shah
There is no guidance, there is no two or three. I think these are all. It ultimately gets down to some numbers. Unfortunately, you’ll have to pardon us for what we are saying is for liners, we are in various stages of trials. Right. And for grinding media, again, similar, but a different trial journey that goes along. But that includes other discussions around visibility of shipping, cost of shipping and overall resistance to what is happening. So the Chilean customer today we are focused on the grinding media bit. You’re not trying to get into the solution conversation because the grinding media has its own pathway which is a little different than the solution pathway.
And once one becomes successful and becomes tried and tested, then we’ll have both strategies depending on, you know, what is the pain area at the customer. For now, I think the input is more on what we are doing from our side than to give any color on one client. Two projects. What happens in next six months? We really have very little to say about it and we’ll share as those developments happen.
Unidentified Participant
Under success. Thank you very much for answering my question. I will get back in the queue. Thank you.
operator
Thank you. The next question is from the line of Ravi Swaminathan from Avendus Park. Please go ahead.
Unidentified Participant
Hi Kunal sir and Sanjay sir. My first question is with respect to the current significant rally in gold and copper prices. Some of our existing large clients related to gold and copper, are they coming back to you discussing about increasing the mining output so that in one ways supply is catching up to the rally in these commodities? Is that happening something that. Are you seeing where the customers are saying, coming back to the drawing board and saying we want to increase supply so therefore you need to supply more grinding media? Is that something which is happening?
Kunal Shah
Ravi? This, this conversation, the shortage and the problem is what we are seeing from three years, it’s reflected in a, you know, this high rally and it’s become public news today. This is exactly what we’ve been saying is the top issue for a miner, for a copper miner. Forget the rally and the financial consequence of it. Like I said in my opening remarks, the world has mined 700 million tons of copper in all its mining history, right? Which is all the wires and other things that we have. If the copper consumption grows only at 3%, which is normal world growth rate, you will need another 700 million in next 18 years.
Okay? Now you add that with AI and your data centers. The amount of copper used in a data center is madness. Then you have, you know, all the transmission for the renewal that comes in renewables, then all your electronic device consumption. If all of that is growing, there is no copper coming up. There is limited mines coming up, right? New mines take 7, 8, 10 years to come along. They are all in ecologically sensitive environment. There are political issues in that sense. There is a clear and present danger that the world cannot produce enough copper now something else will come along, demand goes down.
All of these things we don’t understand. But the, the mine, new mines are not coming up in the same mine, is not able to produce the same volume they did last year. So even before the rally, this was a problem for the miners because whoever is in the mining space saw the writing on the wall, you get it? So, so to that extent it is a clear and present danger. That does not mean that they are saying, dropping all their, you know, anxiety or the concerns around a new solution and seeing, let us try, they will apply their normal, you know, due diligence and protection, you know, measures to contain the risk out of the solution.
But whoever we are talking to is absolutely very interested and fearful of making a change. And that’s the dichotomy that we have to live with, right?
Sanjay Majumdar
So just to add Ravi, very important aspect of our solution is the fact that if you look at the key mines where we are working, some of the major ones, we can’t name them, they have a history of last year where because of the depleting quality of the ore, their output is in fact going down rather than going up. One of our value propositions is that if you use our solution without incurring Major Capex, we will be able to improve your throughput and therefore allow you to maintain your output naturally. So we will be there as a part of the long term solution.
But currently it is helping them solve this key concern and helping them reduce their cost in improving their throughput is what our focus. Understood? Understood. And second question, with respect to the volumes that we had lost some close to around 40,000 tons related to the geographies over the past five, six years. That is South Africa, Canada and Brazil due to the duties etc.
Unidentified Participant
How much of it would we would we have recovered and how much more potential is there in terms of recovery? How much more potential from.
Sanjay Majumdar
No, no, the volumes that we have lost in South Africa, South Africa, recovery. I mean listen, these are all protectionist measures. That’s not the. It’s a little spiritual speculative to imagine. You know, regime changes, duty changes. It is what it is. We have to move forward from here and focus on what we can action on. I mean any recovery of volume is linked to changes in duty structures. And that’s something that I think are here to stay. So I mean we have stopped agonizing and you know, speculating on when it will happen. We have to create a solution that will survive even that. I think that’s, that’s the message that we are internally taking away and working on.
Unidentified Participant
Okay, so out of that 50,000 tons of lost volumes there not much would have been recovered as the way we should look Really. .
Kunal Shah
We don’t know. No, no, no. The total volume lost would be in. Excess of 75,000 80,000 tons. We would have been. Was there no duty protectionist measures that the world has put up over last five, seven years. There’s 80,000 tons of volumes overall that we have lost on duty measures So that’s what it is .
Unidentified Participant
understood that.
Sanjay Majumdar
My profits have grown from 600 to 1100 crores despite losing, you know, 30%.
Unidentified Participant
Of my volume we have gained elsewhere. No,
Sanjay Majumdar
there is a replacement compensation.
Unidentified Participant
Compensation in the sense you are talking about volumes.
Sanjay Majumdar
60, 70,000 tons of volume loss is replaced by the new mines or the additional orders that we have got. That is how we have maintained a flat trajectory or a marginal growth. You get my point? That’s what I was trying to hint at.
Unidentified Participant
Understood. But the steady cut in duties that we had seen in certain countries like Brazil etc. Has helped in you able to negotiate with the client and tell that please get back the.
Please do back the volumes. Is the. Has that happened?
Kunal Shah
Not really. I think like I said, let’s for wherever there is duty, let the country be right. That’s something that there’s enough for us to continue where you know, some of these barriers are lower and we continue to work with that even in duty impacted areas. If my solution can prevail. But would I rather work on where there is the duty value is lower. And there is an opportunity. Or should I go to the last bastion where there is an additional challenge for a duty cost impact. Right.
Unidentified Participant
Understood, sir. Got it. Yeah. Thanks.
operator
Thank you. The next question is from the line of SP from AB and Company. Please go ahead.
Unidentified Participant
Am I audible?
Sanjay Majumdar
Yes, sir. Yeah, very much.
Unidentified Participant
Thank you, sir. Sir, we have a subsidiary by the name Velka Steel. So what is the future of that Company considering that the plant is closed now?.
Sanjay Majumdar
No, sir. See, we have closed that plant and we have also made disclosures on the stock exchanges. The reason is it was a fairly old plant and we had created significant alternate capacities in our Ahmedabad facility. Correct. So it was not viable for us to invest heavily into that plant and to make it operational and therefore we have closed it. So closure of that plant at this point in time, there is no plan to reopen it. So you can treat that particular thing as done and dusted. Having said that today, and if you remember couple of times we tried to delist.
Well cast also it becomes being a listed company. But you know, it could not be successfully done. So right now, currently we have reduced all the operational expenses to the bare minimum. And we will see as we move forward how to deal with it.
Unidentified Participant
So why was the subsidiary acquired in the first instance.
Sanjay Majumdar
When we did not have adequate capacity? We had acquired it even before AIA started setting up expansion projects in Moria and Kerala. You get my point? So this is a history. Velcast was with me even before AIA. Went public. Relationship and we severed the JV and we wanted some capacities quickly for southern markets. We got this opportunity as a listed company previously owned by Times of India family.
Unidentified Participant
Thank you, sir. And all the best.
Sanjay Majumdar
Yeah. Thank you. Thank you. Thank you.
operator
Thank you. As there are no further questions from the participants, I would now hand the conference over to the management for the closing comments. Over to you, sir.
Sanjay Majumdar
Yes. Thank you so much. As always, Sanjay, when I remain for any follow on questions offline. Wish you a very good evening rest of the evening and look to connect with you at the end of our fourth quarter numbers. Thank you.
Kunal Shah
Thank you.
operator
Thank you on behalf of AIA Engineering limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.