Godawari Power And Ispat limited (NSE: GPIL) Q3 2025 Earnings Call dated Feb. 13, 2025
Corporate Participants:
Sanjay Bothra — Chief Financial Officer
Abhishek Agrawal — Executive Director
Analysts:
Akhilesh Kumar — Analyst
Vikash Singh — Analyst
Manav Gogia — Analyst
Sahil Sanghvi — Analyst
Siddharth Gadekar — Analyst
Mohd Sheikh Sahil — Analyst
Jash Gandhi — Analyst
Aditya Welekar — Analyst
Chirag Singhal — Analyst
Suraj Khaitan — Analyst
Rakesh Roy — Analyst
Yogansh Jeswani — Analyst
Divya Agarwal — Analyst
Chirag — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Godawari Power and Ispat Limited Q3 and Nine Months FY ’25 Earnings Conference Call, hosted by Emkay Global Financial Services Limited.
As a reminder, all participant lines will be in listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Akhilesh Kumar from Emkay Global Financial Services. Thank you, and over to you, Mr. Akhilesh.
Akhilesh Kumar — Analyst
Good morning, everyone. Welcome to Godawari Power Q3 FY ’25 Earnings Conference Call. I would like to take a moment to thank the management for giving us opportunity to host this call. We have with us today Abhishek Agrawal, Executive Director; and Sanjay Bothra, CFO.
I now hand over the call to management for the opening remarks. Over to you, Mr. Bothra.
Sanjay Bothra — Chief Financial Officer
Thank you, Akhilesh. Good afternoon, everyone. Thank you for joining us today for the Q3 and nine months FY ’25 earnings con-call of Godawari Power and Ispat Limited. Our financial results, press release and earnings presentation are now available on our website and on stock exchanges. I believe you have had a chance to review the same.
I will briefly take you through the results post which we will have question-and-answer session. GPL has maintained a stable performance over the past nine months despite facing challenges from lower realizations. Now coming to key strategic updates for this quarter. By approval for mining capacity expansion of mines from 2.35 million to 6 million ton is expected to be in-place by Q1 FY ’26. GPI has also restarted mining operation at iron-ore captive mines, having a capacity of 0.7 million tonne per annum. 0.6 million tonne iron-ore benefit plant for BMQ out of proposed 6 million ton capacity situated mines has also started. The increase in pellet plants capacity from 2.7 to 4.7 million ton is expected to be commissioned by Q2 FY ’26. The plan to set-up a greenfield integrated steel plant with a capacity of 2 million ton has been dropped.
Company is evaluating different alternative projects with lower capacity and lower capex for which announcement will be made once the project is finalized. In addition to 70 megawatt solar power plant that is planned to be set-up for additional capacity of pilot plant, an additional 25 megawatt solar power plant is also decided to be set-up for additional power requirement of new verification plant at Arilongri Mines. The plan to venture into OPVC pipe manufacturing has been dropped due to changed market scenario. GPL has completed acquisition of 49% stake in share capital of Pigments Limited on a fully-diluted basis as on 31st December ’24.
The company has entered into an agreement with GAIL for supply of liquefied natural gas for upcoming plant for a period of seven years. The company is eligible to supply steel to all manufacturers of galvanized steel structures for the transmission projects of Corporation of India Limited. Care has assigned 8 ESG 3 rating with a rating score of 51, this is the first ESG rating assigned to the company.
Now coming to operational performance of the production guidance for FY ’25 for iron-ore mining, iron-ore pellets, iron and as the company has already achieved 69%, 73%, 84% and 96% respectively. Iron-ore mining and pellet production dropped slightly, where its production volume of sponge iron, AG wires well as and power increased on both quarterly and nine-month basis. In Q3 FY ’25, sales of iron-ore pellet decreased on Y-o-Y basis due to shifting of export consignment from Q3 to Q4 FY ’25. Steel billets NMS round decreased on Y-o-Y basis due to increasing production of HD wires. Sales of HD wires and increased significantly on both quarterly and nine-month basis. Pellet realization increased by 2% on nine-month basis to 10,387 a ton whereas realization for other products were down in the range of 3% to 8%.
Now coming to consolidated financial performance, on quarterly basis, our revenue, EBITDA and PAT dropped due to lower production of iron-ore, pellets and drop-in realization of almost all the products except ferroLife. On nine-month basis, the company achieved flat revenue of INR3,908 crores. EBITDA and PAT was down on account of lower realization of finished products. Despite the challenges, EBITDA margin and PAT margin is too strong at 22% and 15% respectively. The company has a healthy balance sheet with net cash balance of INR725 crores. Now coming to the market outlook, first international iron-ore scenario. As of February 25, the global iron-ore market is experiencing notable shifts influenced by various economic factors. Recent trade policies, including tariffs imposed by US and China’s council measures have introduced uncertainties in the global iron-ore market. These developments could indirectly affect major exporters like.
The global iron-ore market in 2025 is characterized by an anticipated decline in prices, increased production and evolving demand patterns, particularly in China. The stakeholders should monitor these developments closely to navigate the changing landscape effectively. Domestic is still remains scenario. India is still industry is navigating a complex landescape characterized by robust domestic demand, increased imports and evolving global trade dynamics. India’s steel demand is projected to grow by 8% to 9% in 2025, driven by increased construction in-housing and infrastructure sectors. While India’s steel demand is on upward trajectory, the industry faces challenges from increased imports and global trade policies. Proactive measures including potential safeguard duties and strategic investment are being considered to support a domestic production and maintain market stability.
To conclude, I would want to say that as we approach the end of FY ’25, we remain hopeful about restoring our pallet production and sales to previous levels. Our robust net cash position combined with a well-planned capex strategy focused on substantially expanding our iron-ore mining and pellet production capacities provides a solid foundation for future growth. Improved operational efficiencies and cost-savings from solar energy will further strengthen our performance. Moreover, the benefit of having captive iron-ore mines and introducing high-grade pellets coupled with steadfast support from our stakeholders position us for remarkable success in the years ahead.
I would like now to open the floor for question-and-answers.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. I repeat, if you wish to ask a question, you may press star and one.
We have our first question from the line of Vikas Singh from PhillipCapital. Please go-ahead.
Vikash Singh
Good afternoon, sir, and thank you for the opportunity. Sir, just wanted to understand that you find that the steel probably you have taken a call that now is not the right time. But for the plastic pipes, while we have — what are the difficulties we have faced for which we have to adopt the project and now since both the large-scale project has been dropped, what is the plan to — it was the cash which we are holding?
Abhishek Agrawal
Okay. Good afternoon. So, just to correct, the pipe project was not a very large-scale. It was a small capex of about INR125 crores. So the reason we had — we have dropped up OPVC project is, so when we had entered into an agreement with equipment supplier, that time you know, hardly there were any manufacturers in India who were firstly aware and other they ordered any machines. What has happened is suddenly China — Chinese technology came into India, you know, which we’re not aware of. And now there is a flurry of orders given by different companies who are already into the pipe segments, be it local, say, Bajran, Samba, be it Apollo.
So now that the — I would say the USP where you thought we’ll get an advantage of say at least year to two year where we’ll be the first-mover, their advantage has totally gone away. We were totally blind by Chinese technology and that’s the reason we decided we want to drop this project because the first more will not being there and you know everybody is putting our pipeline now. So again as in India, in Chal, we thought since we are not very strong in the pipe business right now. Let’s enter into a segment where we have to start working from scratch. The whole idea has been dropped. The capex sale charge was about INR125 crores, out of which we have only spent INR14 crores on the order of equipment where we’ve already spoken to the supplier and he has agreed to return the money in due course of time. So there’ll be no financial loss to the company and that is why we have dropped the pipe project OPVC forever. That’s the whole reason behind it.
Vikash Singh
Understood, sir. And now the plans for the cash because our cash higher…
Abhishek Agrawal
Just to add, yeah. So see, the idea of dropping the 2 million steel plant was, as a management, I want to be very honest. The capex we initially, we got it wrong. So usually what happens, we thought the 60% is equipment cost and 40% will be the infra cost. But what has happened is it is opposite. So 40% is your equipment cost and 60% is your infra cost. So the entire capex which in this has about INR5,000 crores INR6,000 crores for INR2 million plant will now probably cross INR8,000 crores. So with so much of capital investment where we would have gone to the bank on a long-term basis to keep the project running on-time, we don’t want to go back into the same debt cycle, which we had entered last 10 years back. So we thought to drop the project, but the entire project is not dropped.
We are revisiting — revaluating on a smaller capacity, say, from 0.8 to-1 million tonnes and that will be announced in due course of time because we want to in — invest in steel value-added steel, but with a smaller capex. So that we don’t have to take a long-term note from the bank. That’s our whole idea.
Vikash Singh
Understood. Understood, sir.
Abhishek Agrawal
But what has happened is just to add to it, there were — there is the delay to acquire the land and the EC has been — it would be very long now, you know. And unfortunately, luckily, I would say during this course, the market also reversed quite a bit. There were a lot of addition capacity by the big players in the coil flag segment. So I thought, give it the right opportunity that we actually take a call. We went to the Board, we discussed on this and that’s why the communication to the — you know the shareholders.
Vikash Singh
Understood. Sir, how much we have already spent for the steel plant? Any money?
Abhishek Agrawal
Nothing, nothing very peanut. We have done that some license — some approvals and certain plantation and all-in terms of government that value is hardly below INR1 crores. So as if nothing is spent on the new steel plant or certain consulin fees and all, which is bare minimum.
Vikash Singh
Yeah. Understood. Sir, second question is regards to pellet pricing. So last one, 1.5 months, we’ve seen that the international iron-ore prices have been continuously increasing. So just wanted to understand over 3Q versus current pallet prices and how is the mix between export or domestic, if at all any exports you are doing right now?
Abhishek Agrawal
See, we did export or shipment last quarter, December, we saw the exports. Primarily, you know, what has happened is key post-Diwali, usually the — the seas market usually the demand picks up, but this time the demand was quite sluggish. So what has happened is the demand of pellet was quite weak in the domestic market because new pellet plants, merchant pellet plants also got commissioned in of these girl. So that is the reason the pellet sales in domestic waters was quite weak and we had to explore on shipment, which got loaded in month of January.
So right now, we’re not exporting anything because the domestic — so what has happened is you know with the news of duty being put on steel before the budget, the domestic market picked-up slightly and there was a good demand of pellet. So we have booked in domestic market and we are not exporting pellet anymore.
Vikash Singh
Understood, sir. And sir, spot prices versus average, what would be the difference positive or negative?
Abhishek Agrawal
Okay. So if you export right now, the relation will be about INR1,000 less compared to domestic market.
Vikash Singh
Noted. On-net level you’re talking about?
Abhishek Agrawal
Yeah, net level, of course.
Vikash Singh
Right. Yeah, understood, sir. Sir, just one more question on the Boria sorry, side. So we have — have we completed the beneficiation plant basically there and started?
Abhishek Agrawal
The whole logic, you know, behind Buredipot was you know there is no beneficial plant in right now and we have plans to put up one, but that will take about three, four years down the line as we have declared earlier as well. So what we’ve done is we have created the circuit in to beneficate the ore because the is of low-grade. It’s about 55 average. So earlier, we couldn’t beneficate that ore and we have to blend it in our charge mix. But now we are benefiting that ore and raising it to 65 concentrate. So that is why we have rested the mines again and bringing the ore to Ghabari and beneficating along with other iron ores.
Vikash Singh
Understood, sir. And sir, just one last question. Given that the domestic prices of iron-ore had been a weaker trend while the international is improving. So what’s your take on the domestic prices, whether do you see scope of domestic prices going up or the demand is still too weak for any such thought process?
Abhishek Agrawal
See, in-market, the prices have not moved up much. It’s hardly 5%, 7% yet. Now the low was about 97% 9% and China was on holiday, right? It’s about 106%. So it’s hardly 7% to 8%. So I won’t say it’s a substantial increase in the international market. Domestic market, there is a shortage of iron-ore and it will continue to remain or for till the supply starts improving, but demand is still — there is still a big gap between demand and supply. The domestic iron pricing is still very strong compared to international market. Which is understood because that in-turn will keep the pel price on the higher side.
Vikash Singh
That’s all from my side. I’ll join the queue for the question.
Abhishek Agrawal
Thank you.
Operator
Thank you. A reminder to all participants, if you wish to ask a question, you may press R&1. The next question is from the line of Manav Gogia from YES Securities Limited. Please go-ahead.
Manav Gogia
Yes, hi, good afternoon, sir. Thank you so much for the opportunity. Sir, building upon the question on the steel plant, you mentioned that your — according to your competition, it came out to be around INR8,000 crores. So did this include the coke coven as well? Because as I recall, we were not setting up and a coke oven.
Abhishek Agrawal
If you are aware you know about a month back government of India has restricted the import of coke into India to purple, merchant in India, right? So merchant have been to help them support them by imposing certain duties. So what has done is they have limited the quota of imports from respective countries for a period of six months, you know. So basis such policy is we were forced to put up a Coco one because if the situation continues for longer-term, we can’t import coke and then if you buy coke from the local, which will increase operating cost by substantially. So unfortunately, we had to envisage the capex for Coco One during the final discussion which happened because of the government-changing government policy. And the capex is almost capex is almost close to INR1,000 crore rupees. It’s essential.
Manav Gogia
Sure, sure, sir. And sir, as I recall from the — one of our past calls, we had stated that the minimum requirement that the company needed to set-up a HRC plant was for two MTPA. So now how with the new — how the currently the discussions are going for the new plant, what sort of route are we going to go for? Will we still go for an HRC plant or are we evaluating to expand?
Abhishek Agrawal
No, no. So to be honest, the way primary producers have been increased as capacities, for example, NNBC is just started the 3 million plant, JSP has started the 5 million plant and about 20 million for the capacity is going to be online in next couple of years by the big guys. So we have completely dropped the chassis project because it’s no point going for a narrow section with flat. It has to be a complete range of products from 1,250 to say two meters. So we have dropped the HRC product. We are exploring other products in flat segment like structures, heavy structures, beams and at the same time also the long products because volume to long market. So we know-how long market works. So we are evaluating on both sides. And once we decide, we probably inform all the shareholders.
Manav Gogia
Okay, okay, sure, sir. So…
Abhishek Agrawal
HRC maybe out of picture now. We’re not going to go-ahead with the now.
Manav Gogia
Okay, okay. Got it. That was very helpful. Thank you so much. Sir, the other question comes on the pellet plant, which we are about to commission. I think about majority of the capex is still about INR432 crores is balance, which has to be incurred probably over the next couple of quarters, I assume. So I wanted to know like are we going to do it? What’s going to be the split between Q4 and Q1 if that is something which you have in mind right now?
Abhishek Agrawal
See, in terms of capex, the capex is ongoing. We’ve already started the erection of the equipments. So probably depending on — so China shipments have started receiving from all the suppliers. So we envisage, the pellet plant will start trial production by early Q2 and by end of Q1 of FY ’26, the entire capex will be done. So between Q4, which is already going halfway, so next four months, the entire remaining INR430 crores will be spent. And we are confident we can start the trial production of the new plant in FY ’26, Q2.
Manav Gogia
Sure. And sir, how much time do we expect from the ramping-up to full utilization levels for the pellet plant?
Abhishek Agrawal
See, three to Six-Month maximum. So end of probably Q3 or mid of Q3, we can expect the full production.
Manav Gogia
Got it. So from FY ’27 onwards, we can expect the full flow of volumes to kick-in.
Abhishek Agrawal
No, I can — I think in worst — in the worst-case scenario, I think Q4 FY ’26, for sure.
Manav Gogia
Okay. Okay, okay. Sure, sir. Sir, just following-up on the capex earlier guided about INR100 crores of capex expectation for FY ’26. Now are we looking to cut that number down considering the steel plant is off the charts. So what sort of a capex can we expect for FY ’26?
Abhishek Agrawal
See, so the mining — the benefication in the mines along with about 95 megawatts of solar for mining as well as pellet and the remaining capex for the pellet plant. So all these will be incurred in next 3/4, which is Q4 FY ’25 and remaining will be probably for FY ’26. So about roughly about — so solar will take about INR5 crores and mining, which is about INR150 balance to be incurred and about INR400 crores. So about INR850 c INR crores of capex will be incurred in the — this quarter and next financial year. And everything will be in general accrual because we still have a healthy balance sheet and we were generating enough free-cash flows on every quarter.
Manav Gogia
Sure. Thank you so much, sir. Thank you so much. That’s all from my end, I will join back the queue for more.
Abhishek Agrawal
Yeah.
Operator
Thank you. We have our next question from the line of Sahil Sanghvi from Monarch Networth Capital. Please go-ahead.
Sahil Sanghvi
Yeah, good afternoon. Thank you for the opportunity. My first question is, sir, we are seeing a drop-in the realization of penet in Q3. Now if I check the steel dry prices, I don’t see that kind of Q-on-Q drop-in Y-o-Y, it’s quite flat. So if you can help us understand because you know the drop-in prices really hits our margins. So what were the reasons for the low-price for pellet?
Abhishek Agrawal
So I’ll tell you what has happened in Q3, especially what happened post-Diwali, you know, we were expecting a steel demand to go up, which now that it happened vice-versa side. And a couple of new pellet plants, merchant pellet plants got commissioned in the Raifur area sector, right? So there was oversupply of pellets and because of sluggish finish demand, the uptake of was not very-high. So we had to export a vessel or we were carrying inventory of more than about 53,000 tonnes, which never happened, usually have that happens.
So cut out on the inventory, we’ve exported a vessel and end of December, the market picked-up and we have held their order book. So it was a one-off situation where prices were a little corrected plus we had a higher inventory duty than we maintained. With all these factors, it impacted the EBITDA for Q3. But I’m confident going-forward, Q4 you will see a much better result compared to Q3.
Sahil Sanghvi
Right, sir. And would you be able to give us a quantum of the dispatches or the export shipment as in because we were expecting the production to be somewhere around 4 lakh 40,000, 4 lakh, IN 20,000 pro pellet, which we have done around 3 lakh.
Abhishek Agrawal
See, 3 lakh is a sale, it’s not that production. Production is very much within the range. Sale was down because our inventories almost reached about lakh ton. So finally, we exported a vessel and now the inventory is down to below 27 tonnes. So all the carrying for inventory from Q3 will be sold-in Q4. We have no intention to export further because domestic demand has again picked-up and we have a healthy order book till March-end. So all the entity will be cleared and the carry-forward EBITDA will be seen in Q4 going-forward.
Sahil Sanghvi
So we are sticking to the 2.44 million ton…
Abhishek Agrawal
100%. So whatever guidance we give in terms of production volume and sales, we are sticking to that and we will achieve that for sure.
Sahil Sanghvi
Got it, sir. And like the kind of say the supply circulus kind of situation you faced in pellet for Q3, do you think that could come again because we’ll be unleashing a big supply of pellet once our new pilot plant comes in. So do you find…
Abhishek Agrawal
That is quite possible because eventually you know which is a fairly part of supply-chain. So we are very well-prepared. Because the new pellet plant will be producing high-grade. So we have a bigger market in India, people bigger players like JSPL, Coastal movement. And of course, export is always open. So we are prepared given a situation, we have to send something out of, we will do it. There might be some certain probably impact on the pricing.
But in the longer-term, we don’t see any challenge because our mine should be fully operation by then. So our input cost and our operating costs will be very healthy. So we can always keep making money. See, here INR1,000, there is not a big difference. But with such a volume, things have happened. Sometimes the demand is good and then the demand is bad. So we have to be prepared for all the situations.
Sahil Sanghvi
Right, sir, right, sir. And sir, if at all things go by our plan in Q1 is when we get the EC sort of mining. So we don’t intend to start — I mean, the pellet plant will start only in Q2 after we get the EC, right? I mean we don’t intend to use the board for the pellet.
Abhishek Agrawal
See, see, I’ll tell you, even after the — once the mining is received, we will need few months-to ramp the capacity, you know. So tele plant one gets operational, right, usually takes three to six months-to get stabilized. So if any situation, we are on shortfall of iron-ore for the trials and we will buy from the market. So then a very temporary phase, hardly probably say two-three to four months. So I don’t see a challenge because plant will take some time gradually to reach the connection capacity. And we have to take the mind up on the market for the trial and we will buy it, no big deal.
Sahil Sanghvi
Got it, sir. And lastly, sir, what do you — what gives you this surety or security that we will receive the EC for mining by Q1 FY ’26?
Abhishek Agrawal
Okay. So the — there was a desire — there was approval desired by the state government where eventually they referred to the case to the mining ministry and eventually the law ministry. So that took almost six months for that desired approval original from the mining industry in our favor. So that approval has been received by the center — by the state government now.
So now everything is started on a very rapid pace. IDM has already-approved our mining application. So we are very confident by Q1, we will get the EC. The major hiccup was that approval from the center, that approval has already come two months back. So now we’re confident we will get the EC by Q1.
Sahil Sanghvi
Got it, sir. Thank you. Thank you, sir for answering my questions and all the best.
Abhishek Agrawal
Because we do understand the entire business of right now is built on the mine on the mine side. So instead of impacts our EBITDA levels.
Sahil Sanghvi
Right, right. Thank you.
Abhishek Agrawal
Thank you.
Operator
Thank you. We have our next question from the line of Siddharth Gadekar from Equirus Securities. Please go-ahead.
Siddharth Gadekar
Hi, sir. First, first question is on the public cursing. Have we received any date for the public or that is still one or two months away?
Abhishek Agrawal
Okay. So last week only, IBB has given accepted our proposal. So now the State Polition Board will issue the final guidelines along with the public hearing. So expecting the public hearing to be announced probably in next couple of weeks. So we expect the public hearing to happen in somewhere in post holy end of March. And once that is done, so in couple of months, you’ll get the EC. So as I said, everything is now moving on a very rapid pace.
Siddharth Gadekar
Okay. Got it. Sir, secondly, our crushing and verification comes online six months after the EC approval. So how should we think about the ramp-up of the pellet or the new pellet capacity? Will we buying iron-ore from outcycle then or how should we think about our operations?
Abhishek Agrawal
And just to give you a very clear picture. So the new plant plant, there are two-parts. One is 1.5 million benification of BMQ, which is the low FC — iron-ore of 35 FC, it’s called banded magnetic cost-out of which 0.6 million is already being commissioned and the plant is already running in-full flow, right? The remaining 0.9 million of BMQ will take about six months after getting the ECE to commission the plant, right?
Parallelly, there is a 4.5 million benefication for the iron-ore lumps. So till the benefication gets completed, which is about six months, we’ll keep sending the iron-ore, which is about 60-61 to the plant where we already have the capacity to benefit. So once the plant is commissioned in mines, so we’ll stop benefiting in, we’ll start benefiting in mines. That will help in reducing the cost. So that’s the whole idea.
Siddharth Gadekar
So there will not be any impact in terms of our — because of the delay and benefication that our mine.
Abhishek Agrawal
No, no, no, there will not be, there will not be because we already have a capacity in-plant to beneficate the raw materials. Beneficating in minds will help us in reducing cost. So we have started — we have invested in mind. That’s the reason.
Siddharth Gadekar
Sir, secondly, in terms of benefication cost, can you give us some sense what is our benefication cost from going from 35 to 65?
Abhishek Agrawal
33. So beyond, it’s so my explant — my delivered cost to my plants currently, which we are beneficating is about INR2,000 to double zero after benefication.
Siddharth Gadekar
And the royalty in this would be around INR50?
Abhishek Agrawal
No. See, the royalty is payable on the dispatch. So we are benefiting from 35 to 65 in the mines. So we are paying royalty of INR65 concentrate, which is about INR750 as per IBM. Because we’re not bringing 35 plant, we are benefiting 35 in the mines itself and dispatching only the concentrate of 65 grade.
Siddharth Gadekar
Okay, got it. Got it. Just secondly, just one more question around this that if we transport the low-grade iron-ore to the plant, our royalty wave will reduce drastically, right?
Abhishek Agrawal
These royalty will be drastically, but will happen and if you beneficate the into the plant side, you are a cost of INR1,000 on the transportation. So transportation cost will go up 2.2 times. So savings are royalty of INR500, but you will lose up on the transportation.
Siddharth Gadekar
Okay, okay, sir. Got it. Okay. Sir, secondly, now given that we are reworking on our steel plant capex, how should we think about the capex number over ’26 and ’27?
Abhishek Agrawal
See, for FY ’26, the mining, the benefication, the pellet plant, the solar for both mining and pellet plant and few other in capex which we have envisage that all be done in FY ’26. So roughly a capex about, say INR1,700 crores will be spent in FY ’26. And FY ’27, hopefully, we are able to come up with a concrete plan for the revised steel capacity. And if we are able to get the EC, so that expansion will happen in FY ’26. But major expansion will start from 27.
So depending on the revised steel capacity, we will come with a revised capex plan. [Speech Overlap] See, for example, if you do a 0.8 million capacity or 1 million capacity, the figure will be somewhere about INR3,000 crores INR4,000 crores. And basically you can consider INR400 crores to INR450 crores per lakh tonne of steel. So for INR0.8 million, 3.500 crores for INR1 million, probably INR4,000 crores. That’s a ballpark figure.
Siddharth Gadekar
Okay. Thank you.
Abhishek Agrawal
Yeah. Thank you so much.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to take questions from all participants in the conference, please restrict yourself to two questions per participant. Should you have a follow-up question, we request you to rejoin the queue. The next question is from the line of Mohd Sheikh Sahil from IDBI Capital Markets. Please go-ahead.
Mohd Sheikh Sahil
Hi, sir. Thanks for the opportunity. Can you please provide the guidance for FY ’26 in terms of revenue and EBITDA margins?
Abhishek Agrawal
See, FY ’26, so earlier in Isaj, the mining will start in FY ’26 and the pellet plant and unfortunately, the mining will not start till at least Q2. So in terms of revenue, you can consider probably additional production of say about 0.5 million to 2.6 million of pellet for the new pellet plant. So probably we produce about 3 million pellets. So that additional revenue will be added.
And see, EBITDA, we expect to — the current market scenario to be somewhere probably — you can add the additional volume which will come up pellet and the additional EBITDA thing you can add. So not much improvement compared to FY ’25. But FY ’27, there’ll be substantial jump because the mining will be at full capacity and the new will be at full capacity.
Mohd Sheikh Sahil
Okay. And what are we targeting for FY ’27 margin?
Abhishek Agrawal
2027 to be honest, at a 4.5 million capacity of pellet and plus, everything bare minimum is about INR150 crore to INR100 crores of EBITDA, FY ’27. But of course, it’s a very, very, I would say it’s a very assumption-based because you don’t know where the market is going to be in next 15 months being a commodity market. But as per current market scenario, you can — you can easily assume an additional EBITDA of close to INR600 crores from the new pellet plant.
Mohd Sheikh Sahil
Okay. And sir, secondly and second question is regard to with the jumbo pigment. Sir, what was the contribution to the top-line for the subsidiary?
Abhishek Agrawal
Sorry, can you please come again?
Mohd Sheikh Sahil
Sir, in regard to the jumbo pigment, sir, what was the contribution to the top-line? Any — in terms of percentage?
Sanjay Bothra
See what happened in this quarter, Jammu Pigments in Jammu Pigments we have acquired only 21.46% till December ’24. So the top-line is not again line-by-line. It is considered as a joint-venture company. The share of profit is only considered in our numbers. And this acquisition was made on 20th November ’24 to for a limited period of 40 days, around INR50 lakhs profit is considered as a share of profit from joint-venture company.
Mohd Sheikh Sahil
Okay, sir. Got it. That’s your. Thank you.
Abhishek Agrawal
Thank you.
Operator
Thank you. I remind you to all participants to restrict yourself to two questions per participant. The next question is from the line of Jash [Phonetic] from Dalal and Broacha. Please go-ahead.
Jash Gandhi
Yeah, hi, sir. Thank you for the opportunity. Sir, my question is on the steel plant. So earlier — so there was a lot of back-and-forth on the street and now we have finally decided to drop it. So was there any concern from the environment clearance perspective because we were expecting — we had a lot of delays on the environment front. So was that the case and that’s where we are dropping or is this because of the higher?
Abhishek Agrawal
I think there are two things. One is, if you have got in say last year, we have definitely started the EUR2 billion project, you know, and of course, you would have — but in the meantime, what has happened in last 12 to 15 months when we have done the detailed capex planning, see our envisage number was not correct, right? So from INR6,000 crores, their minimum is about INR8,000 crores. So that was one probably mistake, I would admit was then from our side in charging the initial capex plus with the current market scenario with so much of steel capacity on flat segment only added by primary, which is coming in already in-line and coming in future, we decided it’s better to probably look at some other products rather than competing with the big guys. So these two situations, you know, there was a reason for us to start the 2 million project.
Jash Gandhi
Right. And sir, because the mines will be coming on-board in FY ’27 and so because of that itself where we’re venturing into this steel capex. So are we confident that we will be on this 1 million ton that we are envisaging will be on that frame so that the earnings don’t take a hit?
Abhishek Agrawal
No, see definitely, we want to — we want to invest into steel because eventually so much pellet capacity is also not right, right? You put everything in one basket with so much a pellet as a merchant sales. So you want to convert a pellet into ballot is steel with a lower capex. So the idea is not to borrow from land, you know, convert a pellet into validated steel and go with a lower capacity. So the steel plant will definitely come up. TVR probably will need some more time to come at a complete plan enough and a complete capex.
Jash Gandhi
Okay, sir. Okay. Thank you so much.
Abhishek Agrawal
Thank you. Thank you so much for your understanding. Thank you.
Operator
Thank you. We have our next question from the line of Aditya Welekar from Axis Securities. Please go-ahead.
Aditya Welekar
Yeah. Thank you for this opportunity. Sir, my question is with regard to this drop-in the realization of the pellets. So you alluded to that the pellet capacity coming in the vicinity of Traypur and in. So in the medium to long-term, structurally, do you see any risk from these pellet plants coming up and putting pressure on the pellet prices structurally going-in future? And how easy for someone is to put the pellet plants? Do these pellet plants have the iron over as a backward integration or people can set-up the pellet plant and it can put risk to our pellet price realizations in future?
Abhishek Agrawal
See. Firstly, buying fines in the market and investing in the pellet plant, I don’t see a business proposition there. You know, I don’t see a — it’s always going to be a struggle to buy signs in the market and make money in the pellet business. In our case because we have a captive INO mines so around 100% annual from. So we will always be making the money, right? In terms of competition, there will be competition because see even Loy is coming a 4 million plant in Maharashtra, right, which is very close to Raipur, right? So even he’ll be targeting the areas around Chandapur and. So there’ll be competition. So that is the reason longer-term, we want to hedge a pellet beds and use those additional pellets into captive stream making in the longer-term.
Aditya Welekar
Okay, understood, sir. So that was the only question. Thank you.
Abhishek Agrawal
Yeah, right. Thank you.
Operator
Thank you. A reminder to all participants to restrict yourself to two questions per participant. The next question is from the line of Chirag Singhal from First Water Fund. Please go-ahead.
Chirag Singhal
Yeah, hi, am I audible?
Abhishek Agrawal
Yes, please tell me.
Chirag Singhal
Yeah. Just two questions from my end. First is on the industry. So can you please share what was the pellet capacity that was commissioned over the last one year and how much capacity are you expecting to come up excluding our expansion in the near-term?
Abhishek Agrawal
Okay. So the capacity which has come up in last 12 months is close to about 2 million tonnes you know and which is actually — there’s another difference also. What has happened is now, so for people, the merchant pellet plant, Bengal was a big market for them in terms of the pellet sale. What has happened is in Bengal, every steel maker has invested in a pellet plant and now rather than buying from rather they are selling into the market. So our buyer has become a seller. What has happened is all the plants are now focusing towards Gar because that is the closest to them. So that is additional volume which is coming to Gar from, that is one reason.
Secondly, in terms of additional capacity, which is added, so there’s another is 4 million tons, which will come up in again Q1 of FY ’26. And in Valpur itself, additional capacity of 2.5 million tons is also coming up. So put together Lloyds plus commissioned 2 million and an additional of 2.5 million. So apart from, about 8 million tons of plant is being commissioned in next six to eight months, which is a good capacity.
Chirag Singhal
8 million tons of additional capacity excluding Gujabri.
Abhishek Agrawal
Excluding, commissioned and to be commissioned.
Chirag Singhal
Okay. So this includes 2 million tons which has already been commissioned?
Abhishek Agrawal
Yes, yes, 2 million already commissioned and another six — another 6 million will be commissioned in next six to eight months.
Chirag Singhal
Understood. And what is the total capacity in India and how much of that is exported?
Abhishek Agrawal
See, currently the capacity in India’s toll capacity is close to about 150 million tonnes with an average utilization of 80%. So I think in FY ’25, India probably will produce about 100 to 10 150 million tons of pellet. Export is hardly because only port-based players like BRPL or say Mandovi Goa or say, only these players are exporting certain volumes because for them being at the port, the logics cost to transport the material from inland to port is bare minimum. So those plants become commercially viable for export. Apart from that, right now, there is no exports update happening from India.
Chirag Singhal
Understood. And my second question is on the price trend. So you mentioned that the prices were lower during Q3 because you have to export more because of the overcapacity. Now if I look at, let’s say, we are now going to have the normal realizations because of higher domestic sales. If I look at the data, prices are almost flat for this quarter versus the previous quarter. So is it fair to assume that our NSMs will be at least higher by INR1,000 over the reported quarter, which is Q3?
Abhishek Agrawal
See, pricing, we only exported 50,000 tonnes of pellet against volume of 3 lakh tons, which is hardly about 18%. So for avid licen of Ghabari in Q4, the impact will be bare minimum. But what has happened is the volumes which are in the plant as an inventory in Q3, all those volumes presold in Q4. So the Q4 volumes plus additional Q3 inventory volumes will be sold-in Q4. So that will add to a substantial EBITDA for Q4 in.
Chirag Singhal
Okay. So you are saying that in Q4, we should not expect a lot of improvement in the pricing versus Q3.
Abhishek Agrawal
Yes, pricing will not be substantial difference, but the volumes of sale-in Q4 will be much higher compared to Q3. Substantial difference will be there.
Chirag Singhal
Got it. Got it. Okay. That’s it from my end. Thank you.
Abhishek Agrawal
Thank you.
Operator
Thank you. A reminder to all participants to restrict yourself to two questions only. The next question is from the line of Suraj Khaitan from SKP Securities. Please go-ahead.
Suraj Khaitan
Hello, am I audible?
Abhishek Agrawal
Yes, please.
Suraj Khaitan
So my first question was for the pellet plant. So we actually sell high-quality content pellets. So it uses less of coking coal. Now that prices of coking coal has gone down, how do you see this thing because the coal prices are a high-quality pellets are more in-demand as it for some coal. So was that also reason why our sell — pellets gone down apart from the new plant that have been set-up?
Abhishek Agrawal
No, see, I’ll tell you, as soon as duty for, the pellets has been in the domestic market where 90%, 95% buyers are of coal with GR, right? We hardly sell pellets to any blast furnace, right? We do get orders here and there probably once like in one couple of months by a blast furnace tea. For example, currently, we are exiting order for for the blast furnace, right? So the pellet pricing for is totally based on the domestic market, which is GRL and there is substantial demand because our pellets are low alumina and low force for which we continue to drive the same premium as before.
So the only reason the sales were down, so you can see an impact on the numbers. When the sales are up, you will see — you will see a difference in the numbers.
Suraj Khaitan
Sir, my second question is regarding the expected capacity utilization after the new plant is set-up. So what is the guidance for FY ’26 and FY ’27 for this?
Abhishek Agrawal
See, for FY ’26, we’ll continue to produce about 2.4 million, 2.5 million from the current capacity and you can see additional 0.5 million or 0.6 million from the new plant. So about 3 million, 3.2 million of pellets we can assume in FY ’26. By FY ’27, we will produce full capacity of, say, 4 million, 4.5 million tons of pellet.
Suraj Khaitan
And sir, my follow-up question will be regarding the margins of each product. We are in selling five products. So how much margins are we realizing from each product like, for example, pellets, HDYs.
Abhishek Agrawal
See, pellet everything in an again market where everything is stable, we will do about roughly — so our pellet cost is about INR6,000 per ton and average selling price is about INR10,000. So we make a margin about INR4,000 on pellet on explant basis. And we sell finish, which is wire was an wire. So if you see from sponge iron because sponge ion is captive. So from sponge to a finished sale and with all the infra and the power cost, we make about INR5 to INR7 there. So INR4 from pellet plus additional INR5 to INR7 rupees from the sea capacity.
Suraj Khaitan
Okay. And thank you, sir. And one more question was there regarding what the top three players whom in and what is the…
Operator
May we please request you to rejoin the queue?
Abhishek Agrawal
Okay, that the top three buyers for GPI, so Prakash industry, which is in Chapa has been a big buyer, there are a couple of local guys, one is group called Real Spad Group is a big buyer and another group caller. So all the domestic players which are the major buyers of on long-term basis.
Suraj Khaitan
Thank you, sir.
Abhishek Agrawal
Thank you.
Operator
Thank. Ladies and gentlemen, please restrict yourself to only one question per participant. We have our next question from the line of Rakesh Roy from Boring AMC. Please go-ahead.
Rakesh Roy
Hi, sir. Sir, my first question regarding domestic sir. On the new pilot plant is we are increasing from 2.7 to 4.7%.
Abhishek Agrawal
Right, correct.
Rakesh Roy
Yes, sir. And you are saying for FY ’26, we will do from 2.7%, we will grow nearby 2.4, 2.5 and from…
Abhishek Agrawal
What I told you was, so current guidance, if you see from last two years, it’s about 2.5 million tons of pellet we are doing, right? 2.5 was additional, say, about 0.7 to 0.8 million tons from the new plant because the plant will get commissioned in Q2. It will take about six months for stabilization. So we can consider 40% capacity. So FY ’26 will do about 3 million to 3.25 million tons of pellet. But FY ’27, we should do about 4.5 million tons of pellet.
Rakesh Roy
Okay. And sir, this is a still paper pellet front. So for new plate plant we have tied with the, is it totally gas operating now?
Abhishek Agrawal
Okay. So yeah, we have done a — we have done an MOU with currently we use producer gas as a fuel for pellet plant. For the new pellet plant, we will switch to natural gas and depending on the commercials and how the plant performs, given a situation, we might convert the entire — all the three pellet plants with natural gas and depend on the scenario going-forward.
Rakesh Roy
Definitely, sir. If we use gas, definitely our margin will improve. How much margin we are looking for improvement in margin?
Abhishek Agrawal
No, see, to be honest, natural gas for India, especially for where our plant is will never be cheap because natural gas is imported into India, then there is cost. So commercially, there will not be any benefit by switching from coal gas to natural gas. The only reason is, you know, going-forward with so much of capacity, if we have to export, so we’re looking at — if you look at the Europe market, the C-band will be in-place from January ’26, right? So all those scenarios, we want to start natural gas and in longer-term, probably we’ll see whether a saving or there is no saving. We want to keep options open.
Operator
Thank you, sir. We have our next participant from the from — we have a next question from the line of Yogansh Jeswani from Mittal Analytics. Please go-ahead.
Yogansh Jeswani
Hi, sir. Thanks for the opportunity. Am I audible?
Abhishek Agrawal
Yes, please.
Yogansh Jeswani
Yeah. So Abhishek, sir, can you also share how much was our contribution from the high-value export that we used to do? And how will that shape up given the entire scenario that you have discussed so-far in terms of new capacity coming in and we also coming up with a the benefication plant and bigger pilot capacity?
Abhishek Agrawal
See, currently, we — our high grid production is about 65%, 35% is the 60 gig, right? And the new capacity which will be coming up will be totally high-grade. So going-forward, our high-grade will be close to about 80% and 20% will be on the commercial-grade, which is in the domestic market. We are open with options of selling high-grade in a domestic market if there is a demand. If there is no demand, we are also open doing exports. Probably supplying to big players like the blast furnace guys like JSPA and Tata, if there is a demand in the market. So the options are open or the quality is there, we derive a certain premium. Depending on situation, we will keep selling it here.
To be honest, we really can be fixed about, we have to export or we don’t have to export depending on the expand relations of the focus of companies to realize the maximum value of every ton of pellet we sell.
Operator
Thank you, sir. Ladies and gentlemen, please restrict yourself to one question per participant. We have our next question from the line of Manav Gogia from YES Securities Limited. Please go-ahead.
Manav Gogia
Hello?
Operator
Yes, sir.
Manav Gogia
Yes. Thank you once again for the opportunity. So one question I wanted to add to — wanted to ask was on the maintenance shutdown that we did for Q2 for the pellet plant. Were there more during Q3 as well where we did some shutdowns in-place?
Abhishek Agrawal
See, I’ll tell you what happens. So there is a big annual shutdown, which usually take during a monsoon. And then there might be small, small shutdowns of three days, four days for certain maintenance. So that’s important parcel of the business. But eventually, it doesn’t impact the year volume. So if you see our guidance for this year and we are on-track and we will be able to achieve that. You really take one big shutdown, annu shutdown and then there are probably a couple of small shutdowns of four to five days only just to keep the plant running at full capacity.
Manav Gogia
Got it. And what would be the duration of the full shutdown that like the big one that you take on an annual basis?
Abhishek Agrawal
See, it’s about 30 days, 25 to 30 days.
Manav Gogia
Okay, got it. Sure. Thank you so much.
Abhishek Agrawal
Thank you.
Operator
Thank you. We have our next question from the line of Siddharth Gadekar from Equirus Securities. Please go-ahead.
Siddharth Gadekar
Hi, sir. Sir, just one question on the external pellet purchases. How much have we purchased this year in nine months and what would be the full year’s purchases?
Abhishek Agrawal
You mean fines because you mentioned.
Siddharth Gadekar
Yeah.
Abhishek Agrawal
Okay. So, see, roughly our current mines capacity gives us about 70% 75% of the requirement. So we purchased about 50,000 tonnes of iron-ore from the market, 50,000, 50,000. So about 6 lakh tons annually we purchase from the market currently.
Siddharth Gadekar
So and going ahead into FY ’23 from the mine start, this will go to zero, right?
Abhishek Agrawal
Sorry?
Siddharth Gadekar
Once our mines start the expansion comes in, this will go to zero, right?
Abhishek Agrawal
100%. So once the mining capacity is in-full capacity, so our current requirement which are banks on the market plus additional requirement, everything will become captive.
Siddharth Gadekar
Okay, got it. Thank you.
Abhishek Agrawal
Yeah.
Operator
Thank you. We have our next question from the line of Divya Agarwal from Ficom Family Office [Phonetic]. Please go-ahead.
Divya Agarwal
Thanks for taking my question. So just wanted to know what’s the yield rate that you get on the beneficiation plant?
Abhishek Agrawal
Okay. So on the B&Q side, because it’s low-grade we do about 50% and on the plant side, so the yield is about 85% on annual basis.
Divya Agarwal
You mean BXQ, you do BHQ as well.
Abhishek Agrawal
So BMQ is about 50% and iron-ore, which is about high-grade 50% 61%, from that we get about 8%, 85% on annual basis to maintain the quality.
Divya Agarwal
Yeah, thanks. Thanks a lot.
Abhishek Agrawal
Thanks.
Operator
Thank you. We have our next question from the line of Chirag, an Individual Investor. Please go-ahead.
Chirag
Hello.
Abhishek Agrawal
Hello.
Chirag
Am I audible?
Abhishek Agrawal
Yes, please.
Chirag
Sir, can you provide a brief overview of the entire production process at starting from iron-ore to pellet production moving downstream to our sponge iron, the less MSR as well, how does the integrated operation function?
Abhishek Agrawal
So basically mining then pellets, pellets affected the DRI for making sponge iron, sponge iron now affected the steel-making which is furnaces along with little bit of scrap and then billets are being hot charged to the rolling mill for making buyrolls and structures which we recently commissioned and buyrolls are further rolled into gold rolled into HG wires. So basically, we sell wires and we sell HG wires as a finished product and sell it because we have additional capacity. So that is the dia process. That went, of course, the captive power. Yeah.
Chirag
And regarding how didn’t an integrated steel plant, what specific product produced within this capacity? If you consider the combined production of MS ground, there and the total 1 million ton?
Abhishek Agrawal
See, currently our steel capacity is about 0.5 million tonne of crude steel, which is billage. So 0.5 million or about 0.25 is via roads and about 2.25 will be structures. The new mill which is commissioned in, right? So going-forward, when the spot mill gets fully operational to at full capacity, so — so 50% will be structured, 50% will be as finished products.
Operator
Thank you so much, sir. Ladies and gentlemen, due to time concern, that would be the last question for today. And I now hand the conference over to the management for closing comments. Over to you, sir.
Sanjay Bothra
Thank you. We would like to express our heartfelt appreciation for joining us on this conference call and we are confident that we have adequately addressed all your inquiries. Should you have any further questions or need additional information, please feel free-to reach-out to our Investor Relations team at GoIndia Advisors. Once again, thank you all for your active participation and support. Thank you. Thank you very much.
Operator
Thank you.
Abhishek Agrawal
Thank you.
Operator
On behalf of Emkay Global Financial Services Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.