Godawari Power And Ispat limited (NSE: GPIL) Q3 2026 Earnings Call dated Feb. 09, 2026
Corporate Participants:
Unidentified Speaker
Sana Kapoor — Investor Relations
Dinesh Gandhi — Executive Director
Analysts:
Unidentified Participant
Vikas Singh — Analyst
Sahil Singhvi — Analyst
vinit Thakur — Analyst
Manav — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Godavari Power and Ispat Limited Q3FY26 earnings conference call hosted by Go India Advisors LLP. As a reminder, all participants line will be in listen only mode and there will be an opportunity for you to to ask question after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand over the conference to Ms. Sana Kapoor from Goindia Advisors. Thank you. And over to you ma’.
Am.
Sana Kapoor — Investor Relations
Thank you. Pari. Good afternoon everyone. It’s my pleasure to welcome you on behalf of Godabri power and Nispad Limited. Thank you for joining us today for the Q3 and nine month FY26 earnings call. Please note that today’s discussion may include certain forward looking statements and must be therefore viewed in conjunction with the risks that the company faces. We are joined today by Mr. Abhishek Agrawal, Executive Director, Mr. Dinesh Gandhi, Executive Director and Mr. Sanjay Bhotra, Chief Financial Officer. May I now invite Mr. Dinesh Gandhi to present the company’s business outlook and performance after which we will open the floor for Q and A.
Thank you. And over to you sir.
Dinesh Gandhi — Executive Director
Thank you Sana. Good afternoon everyone. Thank you for joining us today on this call. Our financial results and earning presentations are available on our website as well as on the stock exchange. I believe that you had a chance to review them. I will take you through the results post which we can have a quotation answer session. I am pleased to share that 9 months FY26 marked and steady performance with slight decline in revenue across operational and financial front. Revenue remained stable with slight decline. EBITDA and paid margin stood strong at 22% and 14% respectively. Despite softer realization, operating momentum remained strong in Q3FY26 on yor basis with iron ore mining production increasing 46% while R& R pellet and value added product remained steady growth Pellet sales temporarily declined during Q3 FY26 on account of accident in the pellet plant in end of September 25th which impacted production and sales volume during Q3.
Whereas value added steel products sales grew 15%. YOY realization for yoy time was and quarter softened across almost all product categories except hair alloys and galvanized product in Q3 on year on base year basis EBITDA margin expanded to 20% from 17% in Q3 FY25 despite a marginal decline in realization and pellet volumes on a quarter on quarter basis. Sales EBITDA and paid moderate it largely due to lower pellet sales volume and softer realization for intermediate and finished product. Notwithstanding these challenges, margin remained resilient with EBITDA and paid margin sustained at 20% and 13% respectively reflecting companies strong operational efficiency and margin stability.
Q3 you know, during nine months production volume showed healthy growth with R and R mining and pellet increasing by 27% and 10% respectively while elevated product remained largely stable with modest 4% growth on sales front pellets and increase of 17% whereas it was slight dip of 3% on value added product. Coming on consolidated financial performance for nine months, revenue dipped slightly on account of software realization which were to some extent offset by higher production and sales of pellet, galvanized fabricated product and rolled structural product. EBITDA and PET were lower primarily due to decline in sales realization.
Still EBITDA and PET margins remain strong at 22% and 14% respectively. Now coming on company’s growth plan and the updates during nine months of the current financial year, I am happy to announce that GPL has received much awaited environment clearance from Ministry of Environment, Forest and Climate Change for more than doubling the iron ore mining capacity of Red hungri mine from 2.35 million to 6 million tonnes. The consent to operate is expected to be received in few days following which commercial operations of the iron ore mining and ramp up of capacity will start hopefully you know during the current month itself.
This marks a significant milestone in strengthening GPL raw material security, backward integration while reinforcing its long term visibility and competitive positioning. You know, environment clearance and consent to establish for 5.4 million ton crushing and benification plant has also been received and we expect to complete the work for beneficiation plant by end of Q2FY27. I’m pleased to highlight that additional 2 million ton RNR pellet plant has commissioned and operations commenced in December 25th with commissioning of GPL total pellet manufacturing capacity to more than 1.7 times, 1.7 times from 2.7 million to 4.7 million ton, strengthening its integrated operation and supporting future growth.
These achievements will drive volume and Profitability growth in FY27. Progress on 0.7 billion ton CRM complex remain on track with land acquisition completed, major equipment order finalized and bank secured construction will begin in April 2026. Commissioning targeted for March 27 GPL is also expanding its solar captive solar capacity by over three times from 165 megawatt current to 540 megawatt. To support captive consumption across iron ore mine, integrated steel plant and CRM operations, land acquisition for solar expansion has been completed, execution is currently underway and these projects are expected to be completed in phased MANNER Beginning for March 27 to March 26 to March 27.
In order to operate this project in more efficient manner and save on the cost of banking, the company has recently decided to set up a battery energy storage capacity of 45 megawatt hour in one of the solar project to meet the power requirement of captive iron ore mine where grid therapy is highest at about 11 per unit. These equipments which are being ordered will be the same composition which our base manufacturing facility will, you know commence over a period of next one year. Additionally, as you are aware, companies decided to enter into manufacturing of battery energy storage system with an initial capacity of 20 gigawatt with a capex of 1025 crores during 202627 and commissioning of base project is targeted for Q4FY27.
The decision to take up base project with a capacity of 20 gigawatt is driven by availability of single line 20 gigawatt manufacturing line which enables better land utilization, structural you know, lower structural and operating cost, improved manufacturing efficiencies and supporting higher operating margins. As a part of companies ongoing efforts to simplify and streamline group structure, the board has approved this investment of its entire 27.3 7.85% stake in dentist Steel which operates a merchant iron ore pellet plant. You know this this stake is is being divested for a approximate value of 91 crores. This transaction is expected to be completed by March 26th.
Coming on the ESG you know front, the company has completed major initiative under energy efficiency decarbonization project resulting in higher average DRI production, increased daily stream generation. The company achieved a score of 76.6 from KRH ESG Rating agency reflecting its recognition as an industry leader with strong ESG risk management and performance. The company continues to make steady progress towards its long term goal of achieving net zero carbon division by 2050. Coming on the market outlook on international front, global RNO prices remained range bound you know during FY20 during calendar 26 at USD 9510 range and currently stood at about $102 supported in H1 by weather related production losses.
However rising supply is likely to keep the prices going forward. China’s steel consumption has officially peaked and is expected to gradually decline. Although recent stimulus measures including direct cash transfer should provide near term demand support, Global R and R market is at an inflection point with an supply addition such as Genoa’s Shimando project commencing operation in November 25th and expected to to export 5 to 10 million ton in calendar 26. Full ramp up will start take you know is expected to take longer. RRNR prices in 2026 are expected to be range bound averaging around $100.
On domestic front NMDC, RNR prices have demanded largely range bound at 4,500 to 5,500 excluding seasonal fluctuation, current prices at 3,900 lipsneck the revised structure with statutory levies excluded from January 2026. Pellet prices have tracked a similar trend, trading at about 8,500 to 10,000 during calendar 26 with current prices at around 10,000 rupees a ton which is expected to remain stable during FY26. India’s steel demand is expected to grow steady through a the calendar 26 supported by infrastructure led growth with budget 26 allocating 12.2 lakh crore towards infrastructure capex providing strong demand visibility. We believe that RNR demand in India is expected to remain strong in view of demand growth from newly commissioned and ongoing projects with imposition of safeguard duty.
The prices of finished and intermediate products across value chain have risen by 5 to 10% which is expected to support profitability in 2026 and onward. In conclusion, leveraging competitive strength of captive iron ore, strength position and ongoing capacity expansion, company is strongly positioned to deliver sustained growth value creation underpinned by efficiency gain, solar less cost optimization and firm commitment to esg. With this we can open the floor for Q and A. Thank you.
operator
Thank you very much. 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 remove yourself from the question queue, you may press Star and two Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question question Q assembled. The first question is from the line of Siddharth from E X. Please go ahead.
Unidentified Participant
Hi Sir. So the first question is on the CapEx. So how should one think about the CapEx over the next three years? What would be the cash outflow over 26, 27 and 28?
Dinesh Gandhi — Executive Director
See Siddharth. Our Capex till now is finalized till end of FY27 like the capex in solar to reach a capacity of close to about 500 megawatt plus base and CRM. All these projects we are expecting to commission by March 27 and beyond which we have not yet announced any further capex. So our capex in the next year of course is a heavy capex.
But with our strong balance sheet of around 10,000 crore of case reserve and debt tie up for the upcoming project except base, you know, we are fully tied up with requirement of our cash flow for FY27.
Unidentified Participant
What would be the total CapEx for FY27?
Dinesh Gandhi — Executive Director
Our FY27 CapEx will be, you know, close to about 2,000 crore plus, minus 200 crores.
Unidentified Participant
And so for this year, how much have we spent till now and how. Much we’ll spend in the fourth quarter.
Dinesh Gandhi — Executive Director
This year? I don’t have the exact number right now, but we would have spent, you know, close to about, you know, 6 to 700 crore in the current financially.
Unidentified Participant
The second is on the iron ore mine. Now given that we are expecting the CTO also coming in, in this month itself, how should we think about the mining volumes for FY27?
Dinesh Gandhi — Executive Director
Okay, so just to answer that, so the CTO, we’re sitting in sand. We are very much hopeful the CTO should, should receive very soon, maybe this week or maybe next week. So yeah, once that is received. So there’d be a very slight increment in the production for this year probably, you know, because only one month will be left for this financial to get over for next year. From 2.35 we’re looking at the capacity of 5 million. And then the next year, which is FY. So April 27 onward, we’re looking capacity of 6 million tons. So that is how we plan to, you know, ramp up a mining capacity.
Unidentified Participant
So next year we should reach by to around 5 million ton irrespective of when the beneficiation facility comes online.
Dinesh Gandhi — Executive Director
Yes. So I’ll tell you what will happen is so by October, November of FY20, sorry for, sorry, October 26th, we should be able to start producing at a rate of 6 million tons because of the delay. So we’ll get only three months of dry season in this, you know, next financial year. Then monsoons will come. So eventually by monsoons, the idea is to get the plant up and running. And from October onwards we want to run the beneficiation at full capacity along with the mining. There is entire planning going forward.
Unidentified Participant
Okay, the last question on the pellet capacity, so even FY27 we should read somewhere around 75% utilization.
Dinesh Gandhi — Executive Director
No, see, before the new plan was commissioned. We were operating close to a 90 capacity and our plant has been running well from last two months. And for next year, next financial year, we will operate at more than 90%.
Unidentified Participant
Capacity for the entire capacity.
Dinesh Gandhi — Executive Director
Yes. So we should be able to produce more than 4.4.2 million tons from next year onwards.
Unidentified Participant
Okay, so lastly on the steel plant. Any thoughts on the steel plant or we will take it up somewhere next year only now.
Dinesh Gandhi — Executive Director
No, see so as we, you know we had said earlier as well, we were waiting for the mining issue to get received because we didn’t want to, you know, overcome it on the capex side. Now since mining has been received by EC so the team is working on the last minute details and hopefully if you know, we will discuss internally and if you want to go ahead with the steel plant, I think the proposal would be taken in the next board meeting.
Unidentified Participant
Oh, okay. But this will be a 1 million seal plant only that we will be.
Dinesh Gandhi — Executive Director
Yes, yes, it will be. It will be agreed to a different. A new location. One million blasphemous seal plant.
Unidentified Participant
Thank you.
Dinesh Gandhi — Executive Director
Thank you.
operator
Thank you. Ladies and gentlemen. Anyone who wishes to ask a question may press star and one on their touchstone telephone. I repeat, participants who wish to ask question may press star and one at this time. The next question is from the line of Vikas Singh from ICIC securities limited. Please go ahead.
Vikas Singh — Analyst
Good afternoon sir. So my first question pertains to Dinesh remark on the iron ore supply scenario. So one of our competitor like Lloyd has also came up with a large supply. So are we going to see some excess supply in the iron ore space in the domestic market as well for the next six to 12 months for success? When is that our assumptions and would that overall performance see.
Dinesh Gandhi — Executive Director
So I would like to break this question. Two parts in terms of volume supply from Lloyds. Definitely there will be a supply addition supply coming in from Lloyds apart from our new pellet plant. And there’s one more person who’s commissioned the pellet fund in this area. But at the same time the domestic demand has gone up because people are still, you know, commissioning their new DRI kilns. So volumes will definitely go up in terms of supply from the market depending NBC also coming with a 2 million pellet plant which will start at Q1. So there might be some volume pressure.
But because of our quality, you know, because of our mining capacity and the beneficiary going up, the quality we make, you know, we have a different end buyer, you know, our target audience is totally different. So we don’t see a challenge in terms of a performance. In terms of volume there might be pressure, you know, over 12 months there might be some lean period. But on the performance of the company I don’t see a challenge because of the quality we make because we’ll be producing two high grade in two plants and a commercial in one of the plants.
So because of higher grade we will always demand a higher premium that will keep a margin intact and our customer audience will be totally different than other players in the market.
Vikas Singh — Analyst
Noted. And so after recent INR depreciation has the exports been now profitable or it is still not. And what is the difference at which we would start export today?
Dinesh Gandhi — Executive Director
Today. Today. See today we are selling anything domestically. We have no intentions of entering the export market at the moment because the difference is almost. The delta is very huge. The delta is more than, you know, couple. At the moment domestic demand is quite strong because in last few weeks the entire supply chain of domestic has gone up. Right from you know, DRI to billets to steel making. There has been upsurge in the finished demand from the market. So at the moment we have no plans of, you know, exporting any billets. We have very strong demand and sitting in February we are almost booked till, you know, end of this quarter.
Vikas Singh — Analyst
Noted. So my second question pertains to our capital allocation. Since now our cash inflow is going to go up significantly. We have invested in Jumbo Pigment then we are doing batteries and at the same time steel. So going forward would. How should we look at our capital allocation in terms of. Because Jumbo pigment hasn’t done anything yet. So yes, after battery our whole and sole focus would be on the steel only and or we will still take up those small pockets of capexes because we are kind of a little bit reluctant to do a large capex on a single segment.
Dinesh Gandhi — Executive Director
So how should we see Jammu Ben? Whatever money we’ve invested we always have the option of, you know, increasing our stake that we can do anytime. But at the moment we have no plans to invest any more money. Demo pigments will run independently. Whatever cash generation happens from the operations basis that only they will look to expand further. We have no, no intention on missing any further money pigments. Just to make it very clear on the allocation side and Mr. Dinesh Ji mentioned so our CRM are solar and a best. So the outflow in this this year should be close to about 2,025 crore with a strong cash reserve with the mining capacity coming up and I beta going, you know our cashes are going plus from the current financial year.
I think we, we are well versed to, you know, meet all the capital allocation requirement. We don’t see a challenge.
Vikas Singh — Analyst
And sir, I just seen in our presentation our carbon intensity remains very high despite being using some of the solar. So after assimilating all the solar power projects, basically what is the final carbon extreme?
Dinesh Gandhi — Executive Director
We currently at 2.4, 2.4 level, 2.45 levels. So to reduce the carbon density a new pellet plant we have switched from coal gas to natural gas. That is one of the initiatives with solar capacity adding for my captive consumption that will further reduce my intensity. But. And we are also working in one of the, you know, carbon Capture projects with IIT Bombay. It’s an R&D project for 5, 10 capture per day. If that is successful, I think, I think then we have a clear path to move forward. But you need to understand for the entire steam cycle today the major crux where carbon emission is happening is the DRI out of 2.4, 2.45, 1.8, 1.85 is a contribution only from DRI.
So that is the area where we really need to attack if we want to bring down a carbon level. On the power front we have taken care. On the ferret side we have taken care. Now the main challenge remains that we arrived where we have tied up with IIT Bombay. We are working on a RD project of 5 tons per day. That project should be up and about by coming Diwali which is 10 months from now on and the results are good. Then we have a clear path how to move forward to reduce the carbon density.
Vikas Singh — Analyst
And so just one last question if I may squeeze in so coal cost wise next quarter, what are our expectation? I believe we imports most of the coal. So INR depreciation has helped them and as well as their talks about Indonesian supply getting hampered.
Dinesh Gandhi — Executive Director
So your thought see Indonesian coals are mainly used for power plant. They’re not used for dri. But definitely it will have a certain impact on the South African prices as well because there will be a glut in the system. So there will be some transfer of, you know, a new buyer and new market seller. Right. Our current cost in the Q4 quarter absolute value is about 11,000 rupees of import. Our DRI contribution is 8,000 rupees in Q1 because we have, we do forward buying. So Q1 the first will very maximum is about 5, 7%. They ensured that. So any substantial impact it has to happen, probably happen. You know from Q2 onward which is almost six months from now on. So no point commenting about that.
Vikas Singh — Analyst
That’s all from my side. And all the best for future.
Dinesh Gandhi — Executive Director
Thank you.
operator
Thank you. Before we take the next question we would like to remind participants that you may press star and one to ask a question. I repeat, participants who wish to ask a question may press star and one at this time. The next question is from the line of Manav from Yes, securities. Please go ahead.
Unidentified Participant
Yeah, hi, very good afternoon. Thank you for the opportunity. So first question is, you know in the presentation we have mentioned that roughly 452 acres of land acquisition has been done for the integrated steel plant and for the CRM complex. So what would be the Capex outlay of the 452 acres? If you could give me the number.
Dinesh Gandhi — Executive Director
To acquire the land? Yes, I think it’s about, it’s about 32 crores. Am I correctraji?
Unidentified Participant
Yes sir.
Dinesh Gandhi — Executive Director
Yeah, so it’s about 30 crore. So we have signed our 19 and 99 year lease agreement with the state industry department and the total outflow has been about 32 crores to acquire the land.
Unidentified Participant
Okay, got it. And so for the Capex that you mentioned for you know, 2000 crores earlier question by Siddharthi, just wanted to know it doesn’t include any steel capexes which are you know probably going to.
Dinesh Gandhi — Executive Director
No, no, no steel. So, so, so steel Capex is not involved for steel. We will, we will first have to you know internally discuss, get it approved by the board. So whatever Capex is going to be doing right now it has nothing to do with the new steel plant. It’s CRM about revenue, crore, the battery storage and the additional capacity. These are the three major capexes which will you know happen in FY27.
Unidentified Participant
Got it, got it. So just you know on the pricing front can you give us some sense on how Q4 is shaping up versus Q3?
Dinesh Gandhi — Executive Director
See on, on the mining side? Sorry,
Unidentified Participant
can you come again on the mining market side? Okay, sorry.
Dinesh Gandhi — Executive Director
See. Yeah, so see on, on the market side fortunately there has been a quite enough surge. You know in terms of prices. Pellet is up almost 10 12, dri is up by 20%. Semi finish and finish almost up by 12 13%. The demand is quite strong. And you know, so the change we have realized in last couple of years is you know, you really should think Q4 and Q1 are the best quarters for steel. But what I’ve got, sorry earlier was Q1 and Q2 for best quarters for steel. But now we have realized that There’s a change in terms of demand and supply.
Now Q4 and Q1 are supposed to be the best quarters before the monsoon arrives. So if you see Q2 was dull, Q3 was also very dull. And this was a trend last year as well. So Q4, the demand is very good and we’re expecting the demand to continue for at least for Q1 as well before the monsoon arrives.
Unidentified Participant
Got it. So that is quite helpful. Yeah. So on the imported coal, would it be possible to give what the current mix is for us right now, imported versus the domestic coal usage?
Dinesh Gandhi — Executive Director
See for a DRI we 100% will be completely import RB1 coal. So that’s about 0.5, 0.6 million tons annually. And for our coal gas operation, for pellet plant and for our power plant, we do about 0.4 million tons of domestic coal. So the ratio is about, you know, 55 or 60. 40. 50% is imported and 40% domestic. We need about a million tons annually to run entire operation.
Unidentified Participant
Okay, that is quite helpful. So just if I’ll create in one more question. Just wanted to know, you know, the company has acquired four backends basically for logistics purposes. So what sort of cost saving are we expecting? You know, this from this acquisition versus what the current mode is.
Dinesh Gandhi — Executive Director
So see that there are two, two basically two purpose to you know, buy for wagons under the railway scheme. One is with a new pellet capacity. We do realize we want to also sell pellets outside the Raipur market for which the railway is the cheapest mode. So to ensure the rack ability and timely movement of our racks, we have acquired this acquisition where one bag, entire rack will cost us about, I think about 24, 25 crore rupees. Secondly, the. The scheme under which we have acquired so there is flat 10% discount on freight for a period of 15 years.
That is a scheme railway design. So a 10% saving will be there on the railway fret for 15 years. Plus the most important point is the timely evacuation of our pellet volumes via rack mode.
Unidentified Participant
Okay. And we can lease this out as well, right During.
Dinesh Gandhi — Executive Director
So, so if you feel, if we feel, if we feel our racks are not getting fully utilized, we can always lease out on rental basis to other companies and, and earn extra income from that.
Unidentified Participant
Okay. Okay. So. Okay.
Dinesh Gandhi — Executive Director
Yes.
Unidentified Participant
But it wouldn’t be a separate business line operation.
Dinesh Gandhi — Executive Director
No, no, no, no. This is, this is just to. This is just a part of infrastructure where we want to, you know, move for a tiny movement of a pellet volume outside Ipur market and Given the situation, if the racks are not being fully utilized, we can always, you know, rent it out to the other buyers, other players who wants it for better movement.
Unidentified Participant
We have clearly mentioned that we don’t want to enter into the logistics business. It is for the captive requirement in idle case only. It will be leased out.
Dinesh Gandhi — Executive Director
Okay. Okay. Yeah. We have clearly mentioned in our disclosure as well.
Unidentified Participant
Got it. Dineshee. Thank you so much. So just one last question. I wanted to you know, get a fair bit of understanding on the other expenses going down by roughly 11% Q1Q. So could you give the reasons behind the same please?
Dinesh Gandhi — Executive Director
Can you please come again?
Unidentified Participant
Other expenses going down, you know, on a quarterly basis.
Dinesh Gandhi — Executive Director
So see if you see one was because volumes are quite low. Our credit card due to that unfortunate accident will almost shut for you know, a span of 40 days. So entire October a plant was not running. So it there might be some contribution based that as well because there was no fuel burn, there was no, you know, other items purchased. So that can be one of the reasons. Plus what has happened is the domestic coal for power plant is towards almost rock bottom due to better availability post monsoon. So that can also contribute on the other, you know, other operating cost going down.
Unidentified Participant
Got it, got it. So primarily because of the lower pellet volumes.
Dinesh Gandhi — Executive Director
Yes, exactly. Exactly. Yeah. Melip. Yes, sure.
Unidentified Participant
That’s, that’s all. Thank you so much and all the very best.
Dinesh Gandhi — Executive Director
Thank you.
operator
Thank you. Participants who wish to ask a question may press star and one at this time. To ask a question please press star and one. Now the next question is from the line of Sahil Singhvi from Monarch Net worth capital. Please go ahead.
Sahil Singhvi — Analyst
Good afternoon. Thank you for the opportunity. My first question is despite 6 lakh ton of pellet production, the sales that we’ve done seems to be pretty low. I mean I understand some part of the pellet goes into forward integration but still I believe as compared to the previous few quarters, we’ve not sold enough. So any particular reason you want to flag off on this?
Dinesh Gandhi — Executive Director
Yeah, there are two primary reasons here. One was there was additional capacity of so our pellet plant. There was a couple of people who also commissioned the pellet plant in the same period. So suddenly there was an oversupply of pellet in the domestic market. The steel market was very lull. There was absolutely very less demand. The spend prices were you know, towards rock bottom since COVID about 20,000 rupees. So there was a phase up in December where the demand of pellet was quite low. That is why the inventory has gone up. But since then all inventory will be cleared in Q4 because of demand being back on the higher side.
So just analysis at today’s position our entire entity which is piled up in December has been audited out.
Sahil Singhvi — Analyst
Right. Good to hear that. So. So. So we’ll be still targeting a 3 million ton of production this year.
Dinesh Gandhi — Executive Director
Yes, yes. We are very, very. We might not able to reach at probably exactly. But plus minus 5% we should be there. So our production volume guidance starting of the year we are very much on track to achieve that.
Sahil Singhvi — Analyst
Got it, got it. Secondly, just the first year of operations for Bess. Would it. Would it be safe to assume a 40, 45% utilization or should we assume a.
Dinesh Gandhi — Executive Director
No. So just to be on a very. Because it’s a new vertical, totally new field. Even, even we have considered a 40 to 50% you know, plant load for the first year. So April 27th to December, March 28th, we consider a portion capacity of say 8 to 10 gigawatts only against 20 gigawatt line. Right.
Sahil Singhvi — Analyst
And margins could be around 6%.
Dinesh Gandhi — Executive Director
Yeah. So for our modeling we have considered a margin of about 7%.
Sahil Singhvi — Analyst
Got it, got it, got it.
Dinesh Gandhi — Executive Director
The reason I tell you why is considered slightly higher margin compared to our peers is because we have chosen a new technology cell which is a 628 cell against a 3148 cell which others are doing. So because of that our operating cost will be slightly on the lower side and that is why the hence improved margin. So our first line will be 100% basis 628 ASL.
Sahil Singhvi — Analyst
Got it, got it. Thank you. Thank you so much.
Dinesh Gandhi — Executive Director
Thank you.
operator
Thank you. A reminder to all participants. To ask a question please press star and one on their touchstone telephone. To ask a question please press star and one. Now the next question is from the line of vineet Thakur from Plus 91AMC. Please go ahead.
vinit Thakur — Analyst
Hi, good afternoon sir. Thank you for the opportunity. I would like to know what is our revenue and EBITDA guidance once the entire CAPEX is done. What is the level of debt that we are expecting to have in the books for the capex?
Dinesh Gandhi — Executive Director
So talking about next year or once all the new capacities are running at.
Unidentified Participant
Full production for the next year and once the capacities are all done or live.
Dinesh Gandhi — Executive Director
See so from current operations once. So next year once the mining will be at full capacity, our operations pellet will be at full capacity. We’re looking at a revenue of close to about six and a half thousand, seven thousand crore from the C complex on the battery storage side if you consider a capacity of 8 GW so you can consider revenue of 5000 crore. And from the CRM again you consider 50% capacity which is a 3.3.5 lakh ton. So you can consider a volume of close to about 2000 crore. So put together anything between 12,000 to 15,000 crore will be the turnover from FY20.
vinit Thakur — Analyst
Okay sir. And so what is the level of that debt that we are expecting to have in the books for the capex?
Dinesh Gandhi — Executive Director
Dineshi, that will be close to about big data. FY27 is up. The capex which have been announced till date will be in the range of net debt will be lower but on a gross side it will be in the range of about 1500. Cross with the minus cash balance will be the net debt. You know that depends on the cash flow generation in the next financial year. What we have done is we have tied up a date of 1500 crore for all these capex to keep the you know cash on the balance sheet for our future expansions.
Unidentified Speaker
And the way we have negotiated with the banks is you know depending on our cash flows for the next year.
vinit Thakur — Analyst
Yeah. Always have a choice to prepay.
Dinesh Gandhi — Executive Director
Exactly. We already prepay and also we will only draw when there is a requirement. So we also we have kept the both option opens of prepayment and draw the money as in when required.
vinit Thakur — Analyst
Okay. And sir, I would like to know what was the impact on of the new labor laws on gpi. Also our employee expenses or anything has increased drastically because of that.
Dinesh Gandhi — Executive Director
See that there will be. Of course there will be because now with a new employee code coming in effectively so earlier. So now you have to treat your contract labors at the same category of your employees. So there will be a very marginal impact probably. I think hardly about you know 7, 8 crores on annual basis. It’s not a very huge impact. There’s that now the law says even your third party employees or a contractor employees has to be detailed in the same way as you take your own company employees. That’s the major difference. So there are change of law, the change of salary structure which will be complied from next financial year then that is very minimal.
You can say about 70 lakhs rupees a month. That’s it. Not, not very major.
vinit Thakur — Analyst
And so how much free cash flow are you expecting three years down the line?
Dinesh Gandhi — Executive Director
It’s very difficult because see if you don’t go with the steel plant then probably from FY28 once all are capexes are done and the new production capacity comes up there will be close to about 2,500 or 2,000 crores of ecash every year. But if the seed plant is shaping up and we do decide to go ahead then for the next three years all our free money will be invested in the new steel plant. So it’s difficult to comment at the moment. All depends you know what capexy plan going forward.
vinit Thakur — Analyst
Sir, since you’ve mentioned the steel plant is there any clarity on when will we have. When will we take a decision if you want to do it or not.
Dinesh Gandhi — Executive Director
But in in best possible, worst possible scenario I think by end of so which will be the annual board meeting which will happen in April and May we will have a full clarity on that. So either we are going ahead or we’re not going, we’ll drop it. That’s very clear because we were waiting for the mining EC to come. Now since that has come we are working on the last, you know, last fine tune detail and I think by next board meeting either we’ll take it up or we’ll drop it. That’s for sure.
Unidentified Participant
So what’s the expected capex for the steel plant if we do go ahead to go and what will be the capacity for it?
Dinesh Gandhi — Executive Director
You’re thinking capacity capacity will be 1 million and the capex VN visage should be somewhere about 5000 crores.
vinit Thakur — Analyst
Okay sir. Thank you sir.
Dinesh Gandhi — Executive Director
Thank you.
operator
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on their touchstone telephone. Participants who wish to ask a question please press star and one at this time. The next question is from the line of Aryan Bhatia from Inved research. Please go ahead.
Unidentified Participant
My question is on the incremental sales volume so please correct me if I’m wrong. So the incremental sales volume once both iron ore mining and pellet come will be 2.7 from the pellet plant and 0.5 from the verification plant. Is my understanding correct?
Dinesh Gandhi — Executive Director
No. So firstly we will not be selling anything out of a beneficial plant. Beneficial plant is being put up to enhance the quality of concentrate which will fit to a pellet plant. So there is nothing sold out of beneficial plant. It’s part of our internal process on the fedex side which you know if you do a volume of say 4 million. So out of which about 1 million will be for captive consumption and 3 million will be for merchant chain.
Unidentified Participant
Okay, so out of the 4 million 1 million for captive consumption and 3 million.
Dinesh Gandhi — Executive Director
Yes, whatever. So we produce 4. We produce 4.2. 4.5. Whatever. We produce ore above 1 million. That will be for completely merchant sales. Okay.
Unidentified Participant
Okay. And so my second question is running on margin on the CRM complex. So what is the EBITDA margin? Because like we will be buying HR voice from outside and.
Dinesh Gandhi — Executive Director
Yeah, see so it’s more of a. Exactly. It’s more of a conversion business to make value added steam. We have also filed for two payless schemes under the new scheme by Stream ministry. So on a year on basis I see, I see a retail operating margin level, it’s about 8 to 10% on the maximum side. 8% to 10%.
Unidentified Participant
Just wanted a clarity on this margin. Because if I look at the HR coil prices it’s around 512000 and CR coil is around 57,000. Shouldn’t the gross margin be 10% as compared to EBITDA margin?
Dinesh Gandhi — Executive Director
See on paper you are very correct. But you know we are getting into validated steel. A lot of branding, a lot of marketing will be required. You know we have to educate our customers because we will be competing against all established pairs like the jsw, Tata and all that. So that’s why to be very conservative for initial couple of years to establish ourselves as you know, one of the leading players with the desired quality. We’ve considered the margin on the slower side. Once you establish you can definitely consider 8, 10% on the gross profit margin side.
Definitely.
Unidentified Participant
Okay, got it answered. Last question is on our best projects can you give the unit economics for the best like per gigawatt of revenue we can get.
Dinesh Gandhi — Executive Director
See today, if you see today per megawatt hour of the entire setup to deliver a site for usage by a. By a buyer is about 80 lakh rupees per megawatt hour. So it makes one container at about 4 crore rupees. So at a first year of 8 gigawatt you can easily multiply, you know 8 gigawatt into 80 lakhs. So it becomes close to about 600,000 crores of revenue with a operating margin of about 6, 7, 87 to 8%.
Unidentified Participant
Got it. Got it.
Dinesh Gandhi — Executive Director
Thank you. 6,000 crore. 8% comes about, you know 450, 500 crore.
Unidentified Participant
Got it. Got it.
Dinesh Gandhi — Executive Director
Thank you.
operator
Thank you. A reminder to all participants. If you wish to ask a question please press star and one on your touchstone telephone. To ask a question please press star and one. Now the next question is from the line of Siddharth from Equidius. Please go ahead. Mr. Siddharth, please proceed.
Unidentified Participant
You can take the next question. I think is not There.
operator
The next question is from the line of Abhish from Siddhi Technology. Please go ahead.
Unidentified Participant
So yeah, I have one question. What is the difference between DF pellets and Dr. Pellets and what is the mix?
Unidentified Participant
Yeah, yeah. Please please submit a question. Please please submit a question. So sorry. So what is your mix in producing BS pellets and Dr. Pellets? As you said in one of your. Remarks that you have higher quality of iron ore. So does it mean that you have higher Dr. Pellets mix in your production?
Dinesh Gandhi — Executive Director
Okay, so to clarify technically first, basically there are two Dr. Pellets. One is the coal based gra sponge which we operate and one is the gas based gri which is being operated by, you know, mostly Middle east and few different countries. Even Sr Asimit al Hazeera doing the same thing. So to make a doctor Gas based pellets, the major difference comes in the physical parameters which is one is the sizing. So for a bf pellet or a cold based grf pellet, the size we produce is 5 to 18.
Where for Dr. Pellet you need a size of 9 to 18, that is a major change. Secondly, the strength of bf pellet, you know there’s a parameter called ccs which is a cold cutting stent. So for bf, 220 plus is more than enough. But for gas based Dr. Pellets you need a minimum of 270, 280. So that is where you know, the challenge comes to maintain that physical parameter. And that’s the reason you get a substantially higher premium in the export market compared to a bf pellet. So for example, today a bf pellet premium for a 6580 pellet is hardly about 13 bucks.
Whereas for a doctor pellet the premium is as high as about 28 bucks. So that is where the difference is technically between a BS pellet and doctor Pellet in our case, since there is a strong demand from the domestic market. So we have no intentions of, you know, making the doctor Pellet and exporting to Middle East. We always have the option to doing that. But at the moment, looking at the current domestic demand, we will keep making BF credit which are equally suitable for dri.
Unidentified Participant
Okay. Okay. Yeah, that worked.
Dinesh Gandhi — Executive Director
Thank you.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press Star and one to ask a question. Participants who wish to ask question may press Star and one. Now the next question is from the line of Manav from Yes, securities Ltd. Please go ahead.
Manav — Analyst
Yeah, hi, thank you once again. So my question is, you know, pertaining to the best. So you just mentioned that for the first year we would be running at a 45 to 50%, you know, utilization level. Want to talk about the second phase of this? Will we take the expansion post the first year of running and seeing how things are going on or will it be, you know, being done simultaneously?
Dinesh Gandhi — Executive Director
No, no, no, no, no, no, no. We got to be little cautious, you know because it’s totally a different field. There will be huge competition. So we will only invest into the second phase once we are able to stabilize the line for the first days.
Manav — Analyst
Got it. And what would be the timelines that I think for the brownfield expansion now it would be a lesser period. Right. Which would be taken up.
Dinesh Gandhi — Executive Director
Yes. So probably they just to. Just to commission the second page will take about maximum about, about. About eight to ten months. That’s it.
Manav — Analyst
Got it, got it. And so you know, second question is, could you just give me how the federal alloy market is shaping up in terms of pricing? I think you know the prices have been quite steady over the last six months. How do we see it going?
Dinesh Gandhi — Executive Director
Yeah, so Ferro’s prices has been hovering, you know, 70,000 plus minus 5% benchmark on the lower side. It went to 68,000 when the market was lull in Q3. And today when the market is good, the prices have moved up to about 74,000. So Fairlight for the entire year has been operating at you know, 70,000 plus minus 5% range. And I feel this, this will continue. So since the market is good right now, I think the prices should be about 74, 75,000 for you know, a few months going forward.
Manav — Analyst
Okay, that is quite helpful. So one last question. Wanted to know, you know there have been discussions about expanding the Borea Table mine. So what’s the management’s view on.
Dinesh Gandhi — Executive Director
We have, we have, we know we have, we have, we have full plans to expand the Bore Tibu mines. As we have commented earlier as well, the mines being low grade. So we have to put up a beneficial plant inside the mines for which it’s essential area would be required. So we already started the process of preparing the Tor to file for the new EC along with the beneficial plant. So we see that plant up and running in say FY30 which is three years from now on, very minimum.
Manav — Analyst
Got it. And.
Dinesh Gandhi — Executive Director
No. So the, no, the documents are under preparation. We have finalized how we want to run that mind along with verification. So the Tor will be filed in Q1 of next financial year for the new EC. So you can consider about 1215 months of EC period and then another 15, 20 months of plant erection. So three years from now on.
Manav — Analyst
Okay, got it. And this would come regardless whether we proceed ahead with the steel plant or no, right?
Dinesh Gandhi — Executive Director
Yes, definitely. Because today my pellet requirement for my pellet to feed my pellet plant, I need about. About 5 million tons of, you know, concentrate. So it’s always, you know, nice to have a backup of a million ton of same grade from a different mine. So if you don’t put up the steel plant, this will, you know, be an alternative source. So if there are, you know, some challenges because of population in monsoon or something, you can always, you know, feed the mines to the pellet plant.
Manav — Analyst
Okay, and what capacity expansion are we planning from 0.7 to what?
Dinesh Gandhi — Executive Director
4 million. So 4 million 104 million benefication. So the output concentrate will be close to about 1.5 million tonnes and 40% recovery.
Manav — Analyst
Got it? Yes. Thank you so much.
Dinesh Gandhi — Executive Director
Thank you.
operator
Thank you. A reminder to all participants that you may press Star and one to ask a question. I repeat, to ask a question, please press Star and one. Now the next question is from the line of Shikhar Mundra from VVcock Commercial Limited. Please go ahead.
Unidentified Participant
Hi. So for the expanded pellet capacity of 4.7 million tons, what is the corresponding iron ore?
Dinesh Gandhi — Executive Director
Sorry, come again? You’re not. You’re not clear.
Unidentified Participant
For the expected capacity of 4.7 million tons of pellet or what is the INR which is required to make that?
Dinesh Gandhi — Executive Director
Okay, so on actual table basis we need about 5 million tons of iron ore. But to make that 5 million tons, we will have to beneficiate the 6 million sort of 6 million we about 15 to 20%. There will be yield losses to upgrade the quality of iron ore. So from 6 million we’ll do about 4.75 tons of concentrate which will be sufficient enough to feed my entire pellet plant.
Unidentified Participant
Okay, so the entire 6 million tons of. I know, capacity will be used. I mean we. No, we have.
Dinesh Gandhi — Executive Director
No, no, no. Than selling. Rather we would like to, you know, public center mining life. We have no intention of. Because I’ll tell you another reason. Because if we happen to sell in the market as per the new MMDR act, because our minds was allotted in the captive category, we allowed to sell 50% apart from a consumption. But then you have to pay additional royalty. So the royalty amount will be thousand rupees plus. So does it make sense to sell addition but better to reserve and you extend your mining life or have a buffer stock if something Goes you know, haywire in the mind because of extreme monsoon or, you know, it can be anything.
Unidentified Participant
Got it. Got it. And post this expansion letter. On 4.7 million tons. What. What will be the split between high grade pellets and low grade pellets?
Dinesh Gandhi — Executive Director
So, so on split will be. So about. About 70% will be high grade. 30 will be low grade.
Unidentified Participant
And on what is the current split?
Dinesh Gandhi — Executive Director
Current split is again, it’s. It’s same. So current spread is about 65 is high grade, 35 is low grade. So one plant will continue remain like that. The two bigger plants will keep producing. Sorry, the ratio will. Will change to 80%. So 80 will be higher. 20 will be low grade. My apologies.
Unidentified Participant
Okay. Okay. So our margins, we are expecting our. Margins to slightly improve.
Dinesh Gandhi — Executive Director
Exactly. So whatever challenges you’re going to face from the pressure, you know, the supply side, because of Lloyd and other computers, we will very much negate that with our quality and high opinions.
Unidentified Participant
Good. Got it. Thank you. Thank you. And all the best. Thank you so much.
operator
Thank you. The next question is from the line of Divesh Shah from SRI Polymers. Please go ahead. Mr. Devesh, please proceed with your questions. As there is no response. Sir, can we move to the next question?
Unidentified Speaker
Yeah.
operator
The next question is from the line of Siddharth from Equerious. Please proceed.
Unidentified Participant
Hi sir. First on the mining side, now with the expanded capacity and hamping of the mines, will there be some change in the cost structure? Given the operating leverage that would be. Coming in, how should we see the mining cost moving over the next two years?
Dinesh Gandhi — Executive Director
See, the mining cost should remain on the similar level. Primarily there are two reasons. One is because of additional mining, our mining costs will slightly go up. Because the way our mindset, it’s not a very open cast flatland. We are going well below the sea level. So currently mining at about 100 meters. And to reach 6 million, we have to probably reach about 140, 150 meters. So our mining cost will go up. That will be compensated by the volume. The solar plant, we have established, the new battery storage as well as other beneficiaries. So we still expect the mining cost to be at 3,000 levels in the longer term, which is currently right now.
Unidentified Participant
Okay. Secondly, with all the power projects coming online in the next two years, what kind of cost savings would we have on the energy side?
Dinesh Gandhi — Executive Director
See, on mining side, you know, today the grid tariff is about 11 rupees, which will be replaced by a power of say three rupees. So on the plant side, the grid tariff is about seven rupees which will be raised up by, you know, three rupees. So on total put together, our annual cost, average cost of generation, which is currently about 3.75 rupees, should be well below 3 rupees.
Unidentified Participant
The payback should be less than 2 years for the entire product.
Dinesh Gandhi — Executive Director
No, no. So for mining the payback is about three years. But for my plant side the payback is about four and a five years because the tariff is on the lower side.
Unidentified Participant
Oh, okay. Got it. Thank you much.
Dinesh Gandhi — Executive Director
Thank you.
operator
Thank you. The next question is from the line of Davis Shah from SRI Polymer. Please go ahead.
Unidentified Participant
Yeah, ma’. Am, after all expansions, what could be total turnover of the company in 20. 20. 2030. Sir. 2030. 2030.
Dinesh Gandhi — Executive Director
Total turn of the company.
Unidentified Participant
Right, yeah, ex expect.
Dinesh Gandhi — Executive Director
Yeah, of course, of course I do understand that. So the total turn of the company. So I’ll tell you. Roughly. Roughly at about 25,000 cr.
Unidentified Participant
Okay. Okay. Thank you.
Dinesh Gandhi — Executive Director
Thank you.
operator
Thank you ladies and gentlemen. That was the last question for today. I now hand over the conference to management for closing comments. Over to you, sir.
Unidentified Speaker
Thank you ladies and gentlemen for joining us on this call. We hope we have been able to answer all your theories. In case you have any further questions, please get in touch with us or to our investor relation team. Thank you very much. Thank you. And I would. Thank you very much.
operator
Thank you.
Dinesh Gandhi — Executive Director
Thank you.
operator
Thank you on behalf of Go India Advisors llp. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.