Jindal Stainless Limited (NSE: JSL) Q2 2025 Earnings Call dated Oct. 18, 2024
Corporate Participants:
Shreya Sharma — Group Head, Investor Relations
Abhyuday Jindal — Managing Director
Anurag Mantri — Executive Director and Group Chief Financial Officer
Tarun Kumar Khulbe — Chief Executive Officer and Whole-Time Director
Analysts:
Ritesh Shah — Analyst
Amit Dixit — Analyst
Rajesh Majumdar — Analyst
Vikash Singh — Analyst
Anupam Gupta — Analyst
Ashish Kejriwal — Analyst
Tushar Chaudhari — Analyst
Kirtan Mehta — Analyst
Pallav Agarwal — Analyst
Prasanth Gopal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Jindal Stainless Ltd. Q2 FY ’25 Earnings Conference Call hosted by Investec Capital Services [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Ritesh Shah, Head of Mid-Market Research Coverage and ESG, Analyst Materials, from Investec Capital Services India Private Limited.
Thank you, and over to you, sir.
Ritesh Shah — Analyst
Thank you, Riti [Phonetic]. Welcome, all, for Jindal Stainless quarterly conference call. We have with us the senior management. We have with us Mr. Abhyuday Jindal, Managing Director; Mr. Tarun Khulbe, CEO and Whole-Time Director; Mr. Anurag Mantri, Executive Director and Group CFO; and Ms. Shreya Sharma, Group Head, Investor Relations.
I’ll hand over the call to Mr. Abhyuday for opening remarks. And post that, we’ll have a Q&A session. Mr. Abhyuday is available only for 30 minutes, 40 minutes. So would request participants to drive the strategic questions in the first half of the call.
Thank you so much, and over to you, sir.
Shreya Sharma — Group Head, Investor Relations
Thanks, Ritesh. So good afternoon everyone and a warm welcome on the call we have shared our Q2 FY ’25 earnings presentation with the stock exchanges, which is also available on the company’s website. And today’s call discussion will be on the same lines. Please note some of the information on this call may be forward-looking in nature and is covered by the disclaimer on Slide 2 of the earning presentation. And as Ritesh mentioned, Mr. Jindal — because due to some exigency, Mr. Jindal has a hard stop at 04:00 PM. So request you all to please limit your strategic questions to one each, and after that we’ll take the bookkeeping questions.
Thank you. Over to you, sir.
Abhyuday Jindal — Managing Director
Thank you, Shreya, and good afternoon to everyone, and welcome to the Q2 FY ’25 earnings call. Let me first discuss key business highlights of the quarter ended September 2024, following which Anurag will take you through our operational and financial performance.
Despite global challenges and disruption in ocean freight, we maintained our export volumes on a quarter-on-quarter basis. The export market continued to face headwinds due to weaker economic activity in the EU and the slowing of key sectors such as manufacturing and construction in the U.S. Though we are continuously targeting to increase sales in other geographies like South Korea, South America, Middle East, however, currently it is not compensating for the loss of sales volume in the major global economies.
On the domestic front, we witnessed stable growth throughout the quarter. Demand remained steady from railway coaches, lift elevator segment, pipe and tubes, and other segments as well. The performance of white goods sector exhibited improvement ahead of the festive season, and we also expect moderate growth in the two-wheeler segment till the tail end of the season.
There have been good developments on the railway front as the Rail Ministry increases its focus on building a world-class rail network alongside enhancing industrial capabilities. The contract for the design, manufacturing, and commissioning of the first two high-speed bullet trains is awarded to manufacturers domestically. This was earlier expected to be imported. The contract specified the car body to be manufactured using austenitic-grade stainless steel, and we are well-equipped to manufacture and deliver this grade as per the requirements.
Additionally, new train sets such as the Vande Bharat Sleeper Train and the Namo Bharat Rapid Rail are further expected to boost the demand for stainless steel in the country. We also expect a healthy demand for stainless steel from the process industries for ethanol, hydroelectric, thermals, nuclear power plants. Moreover, the government’s renewed focus on the use of stainless steel in bridges and infrastructure applications in coastal areas will further elevate the demand for this alloy.
I would also like to add that our announced projects are progressing very well. I’m happy to share that we have commissioned our Nickel Pig Iron smelter facility in Indonesia in the month of August 2024, which is around eight months ahead of the scheduled timeline. I would also like to highlight that aligning with the Atmanirbhar Bharat Mission of Government of India, we have accredited by BrahMos Aerospace as a qualified vendor for the manufacturing and supply of steel sheets and plates for their cruise missile application. We have also supplied low-alloy steel sheets for ISRO and HAL satellite launch vehicles.
Now coming to the ESG front As a company dedicated to ESG objectives towards our efforts in sustainability and ecologically conscious business practices, we have received recognition at multiple industry events. Both our Jajpur and Hisar units have been honored with the prestigious Energy Efficient Unit award at the 25th CII National Awards for Excellence in Energy Management. And Jindal Stainless has been awarded the prestigious Platinum Global Environment Award 2024 for its outstanding achievement in environment excellence.
With this, I would like to hand over to Anurag to discuss the operational and financial performance. Thank you.
Anurag Mantri — Executive Director and Group Chief Financial Officer
Thank you, Abhyuday. Good afternoon, everyone, and a very warm welcome on the call. As highlighted by Abhyuday, we delivered consistent volume amidst challenging global scenarios. Let me discuss in detail the operational and financial performance during quarter two of FY ’25.
We delivered a stable sales volume of 564,627 metric tonnes in Q2, which is increased by around 4% on Y-o-Y with a slight dip of around 2% on quarter-on-quarter basis. The stand-alone Q2 revenue increased by around 2% on a quarter-on-quarter basis to INR9,746 crores, with improved product mix and limited sales in a lower-end segment dominated by Chinese imports.
Quarter two EBITDA remained steady at INR1,007 crores and PAT increased by 2% at INR589 crores on quarter-on-quarter basis. The H1 sales volume increased by 5% on year-on-year basis in spite of our export volumes falling 28% due to global economic challenge. So the support of this volume is increased — backed by the increased domestic sales, which is almost 10% higher than the previous year. So we saw a good domestic demand across value-added segments.
Further, the continuous focus on maintaining a strong balance sheet as on September 30, 2024, our JSL and JUSL net debt has reduced to INR4,312 crores, which is down by 11% from June ’24. This is despite the capex and investment outflow of rupees INR2,900 crores, mainly through — mainly on account of the Chromeni acquisitions Indonesia facilities investment. We have achieved this through working capital optimization and achieve this debt reduction as part of balance sheet strengthening.
Our stand-alone debt-to-equity is maintained at 0.2 times and the net debt-to-EBITDA stood at 0.7 times. Our debt service coverage ratio has also significantly increased on back of strong cash flows.
To close, we continue to anticipate upbeat domestic stainless steel demand, and this will continue to rise with the robust economic activities.
With this, I would like to end my discussion and would request the moderator to open the floor for the Q&A session.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Amit Dixit from ICICI. Please go ahead, sir.
Amit Dixit
Yeah. Hi. Good afternoon, everyone, and thanks for the opportunity. Congratulations for a good performance in very testing time. I have a couple — yeah, a couple of questions. The first one is that recently we saw DGTR initiating investigations into the import of Chinese stainless steel fuel. Do we see any possibility of investigation/protection for our range of products as well? Because import influx is something that has been troubling the industry and us also for quite a while. So just wanted your thoughts on this.
Abhyuday Jindal
Absolutely, Amit, that is definitely on the cards. And just as you know the stainless steel industry being a little bit unorganized, data collection from various MSME and other competitors is taking a little time to organize. But we are working on it, and we expect that soon we would be also applying for some kind of anti-dumping duty.
Amit Dixit
Okay. That’s nice to know. The second question is essentially on the ongoing project. So I just wanted to understand the ramp up of Rathi and Rabirun, where are we now? And also the NPI project of course you commissioned ahead of schedule. So is there a chance that the stainless steel project that we are contemplating could also be commenced in what we have actually emphasized?
Abhyuday Jindal
I’ll take the last part first. So definitely, it’s a two-year time period that they have taken for the construction of the new stainless steel melt shop. But looking at their speed and looking at exactly like you’re saying, the speed that they’ve completed their initial project, our expectation is also it should come up before two-year period, but it’s still too early to give any kind of clarity. Maybe a few coming quarters later, we can give you a better picture on that.
And for the other thing, Mr. Khulbe?
Tarun Kumar Khulbe
For Rathi, like this H1, we have produced around 50,000 tonnes which is almost aligned to our projection. So we believe that this year, our Rathi utilization should be around 65% to 70% capacity utilization. On Rabirun, we are still figuring out, I mean, this is — this ramp-up and still figuring out that what we — or how do we take our business plan over there. So — but on Rath, we are — but it is still on the — rebar is gradually picking up because as you could have seen that very recently, Mr. Nitin Gadkari has also made two statements in public where he has recommended the use of a stainless steel rebar, at least in the coastal areas. That also we believe will help the industry. And because a lot of circular within the NHAI and their related entities they have reinforcing this policy of use of the similar steel rebars into the coastal areas.
Abhyuday Jindal
So there’s some good tailwinds coming up for long products, and we feel that volume should pick up there.
Amit Dixit
Yeah. One related question here. Have we broken even on EBITDA in Rathi?
Anurag Mantri
Not right now, Amit, because initially as we mentioned is that it’s not a rebar. We are more focusing on the wire rods. Gradually, it will move to a rebar and it’s more a stabilization phase. So initial fixed expenses are higher. But as we move forward, we are on track on our plans.
Abhyuday Jindal
Fixed expenses are higher, and because it’s a stabilization kind of phase, so we started producing vanilla grades where always margins will be a little under pressure. And now that confidence has come and we are also moving now to higher grades, better variants, so from volume side and from margin side, there should be improvement in the coming quarters.
Anurag Mantri
Yeah. So — but at the end of this year, we will surely be at a — because we are on track for the break even and some margins over there, better earnings over there.
Amit Dixit
Okay. So that’s very helpful. Thanks, and all the best.
Abhyuday Jindal
Thank you.
Operator
Thank you, sir. The next question is from the line of Ritesh Shah from Investec Capital Services. Please go ahead, sir.
Ritesh Shah
Yeah. Hi. A couple of quick questions. We had given volume guidance number of 20%. Do we still stay put to it or would we look to downward-revise the number? That’s one.
Secondly on the spread guidance, we have indicated INR18,000 to INR20,000 at stand-alone. Do we still stick with it or is there any change?
Third is basically on the capital raise. We have taken an enabling resolution. Any thought process or any variables that we are looking for before we tick that box?
I think these are three quick questions. Thank you.
Abhyuday Jindal
Good, Ritesh. Thank you for asking. I think we would definitely like to bring down our volume growth guidance. We had initially said 20% looking with the expectation that export would pick up. And basically we were bullish on export side. And that has not happened. And it’s further actually Europe and U.S. has just not recovered. In fact, Germany, which is the strongest market from a volume standpoint and economic prowess standpoint is actually in a very bad situation.
So that is why at this point we would like to refresh our guidance from — down from 20% to 10% to 15%. We’re still quite positive on the domestic growth story. It’s just that export is a bit of a dampener still for us.
And in terms of your EBITDA per tonne guidance, we are trying to maintain it around INR18,000 at the moment, because we still want to push our volumes, we still want to — yeah, basically grow our volumes not to the factor that we are able to hurt our margins to a large extent. So looking at factor of both of them, volume 10% to 15% and EBITDA margin of around INR18,000 per tonne.
And the third question?
Tarun Kumar Khulbe
And third question was on the capital raise. As you mentioned, this was only enabling resolution which includes all sort of instrument on equity, quasi equity as well as on the foreign currency, bonds and everything. Right now as you would have seen in last quarter, consolidated debt has been reduced by more than INR500 crores. So we have done quite a few working capital optimizations. And that has helped us to release a permanent capital in the — permanent cash in the system. And therefore, the debt has not reduced despite outflow of INR2,900 crores in last H1 itself.
So we will see — our focus will always be a very prudent capital management and stronger balance sheet. Depending on that and depending on our growth plan, whenever opportunity comes, we will see that, but there is nothing on the card immediately at this stage.
Ritesh Shah
Sure. Just a follow-up. One last question for Mr. Jindal. Sir, what is your priority in order of ramping up the different variables that we have including RKEF, SMS, Rathi, RUBL [Phonetic], and Chromeni? I was just perplexed when I heard the comment we are trying to figure out on RUBL. So is it something on track or how should we read into that? Thank you.
Abhyuday Jindal
Priority is definitely Chromeni, our Mundra asset, because that is where our overall, let’s say, CR output was also less in the company, and the demand and requirement coming from our customers is maximum for our cold-roll high-quality product. So capacity-wise also it is the largest. So our prior and investment-wise also is one of the largest. So priority is definitely Chromeni.
And I mean, others, I would all put at an even footing. I don’t want to say one is higher priority than the other. But Chromeni, definitely, because immediately it can add to our bottom-line, top-line volume growth, that is our main focus.
Ritesh Shah
Sure. Thank you so much. Thank you.
Operator
Thank you, sir. The next question is from the line of Rajesh Majumdar from B&K Securities. Please go ahead, sir.
Rajesh Majumdar
Yeah. Hi. Thanks for the opportunity, and congratulations, again, on maintaining your profitability despite a difficult quarter. Some of my questions are answered. But I would like to ask one question for sir, is that on the NPI venture now you have commissioned ahead of schedule, is it currently viable at the $17,000 nickel price, or what would be the viability of this project at nickel? What average price of nickel have you considered in terms of longer-term viability for this project?
Abhyuday Jindal
Rajesh, in our business, we have seen the nickel — and we don’t take a call on nickel, let me tell you, I think frankly, because we have moved away from that business model and we started doing the — mostly on that how we should maintain a consistent inventory. It’s not that when nickel looks down, we take a higher inventory and when it comes.
So even this project has two larger objectives. I recall one was of the backward integration to raw material security, which remains as it is intact, that the strategic objective is completely remain intact as it is. Second was on that process was also on that to help expanding the margins through this going back into the value chain, which obviously as I mentioned, because when you maintain more as a static nickel inventory, it may go up and down, but payback may deliver slightly in that case. But typically, we have seen that does not remain in those levels. So in an average basis, we expect it to be on track.
So I think strategic objective remains that was the first objective. That is completely intact. Profitability-wise, at this current level, it may sometimes not look as good as what we would have invested at that point of time. But in our business, as you were saying, it’s more we are working on a stable inventory management level.
So from that perspective, we will continue to hold the stable margin range into this project also.
Rajesh Majumdar
And just a related question on the investments you make, say, over the longer term. What is the kind of return you kind of envisage on these investments, I mean, over a longer-term frame in terms of the ROI on these projects?
Anurag Mantri
So our defined capital allocation policy which we have published is that at least 15% ROI for all the growth investment, the projects.
Rajesh Majumdar
Including NPI, I guess?
Anurag Mantri
Yeah, right.
Rajesh Majumdar
Okay. Because you mentioned earlier that I think despite the project being commissioned on time, the actual volumes of this may come a little later. So I was just wondering why that is happening.
Tarun Kumar Khulbe
No, but that is a common — I mean, that is the way these projects work once they get commissioned and one or two quarters they take to ramp up. It is not that quick ramping up. That’s a very normal thing with these projects.
Abhyuday Jindal
Correct. That’s with any company, any facility, any factory, any country, ramp-up is always a long-run process.
Tarun Kumar Khulbe
And that ramp-up part is irrespective of when you commission. Even if you commission it after two years, the same period it will take to ramp up.
Abhyuday Jindal
Yes.
Rajesh Majumdar
Okay. And my last question is that now that we have reduced the volume guidance somewhat, I think the new expansion of in Jajpur will take now three years to kind of come to full utilization instead of the two years we were looking at earlier. So in that case, will we undertake any large capex before that, or we will look at first this utilization getting — first this facility getting utilized before we look at a larger [Speech Overlap]
Abhyuday Jindal
We are not changing that. We still feel util utilization should come up quite fast. And for next year, we are quite bullish again. We’re not revising our guidance for next year volume growth, because there is real — no reason for volume dip other than shipping time has increased, your container availability is less, your cost has gone up, which you’re not able to pass on to your customers at this moment, because in their own markets, all your stainless steel companies, volumes are down. So which is why they are also quite competitive and they’re quite aggressive there.
So absolutely, the minute any respite comes in one of these wars or something, again, our volume will pick up because we are in constant dialogue with our customers. They want our material, they’re requiring our material. But obviously, because of — we also don’t want to dip our margins and still maintain a steady volume growth, this is the situation at the moment.
Anurag Mantri
So all this if you see, Rajesh, is a temporary one, I would say, is that like West Asia war crisis, Red Sea, higher time, lower pickup in Germany and some of these geographies, I think. And then domestic demand remains very strong. So if you see even domestic side, we have still achieved despite all these challenges the 10% volume growth in this, and we will have a higher volume growth in H2 in domestic market.
So — and as the premium domestic segment continues to grow faster than the normal stainless steel growth rate, we will continue to tap those opportunities. So it’s not we have seen — means, it looks more temporary at this stage, and we wanted to be prudent at this time if quarter four also if the export volumes really pick it up. A good thing is that our inventories levels in the Europe, the channel is very low. So that you can see from our IBERJINDAL, which was earlier having stocks of the inventory, that has been completely exhausted now. So in fact, the channel-level inventories are at almost — is completely exhausted in that system. So whenever the demand picks some up, it will eventually get the opportunity to step there.
Rajesh Majumdar
Nice. [Indecipherable] Thank you.
Operator
Thank you, sir. The next question is from the line of Vikash Singh from PhillipCapital. Please go ahead, sir.
Vikash Singh
Good afternoon, sir, and thank you for the opportunity. I just wanted to understand one thing from the NIP project. By which quarter, do you think that the diaphragm would be ramped up and would give us economic hedge in terms of the nickel prices? And once this plant is ramped up, what are the plants with the cash flow which we would be earning from that project?
Anurag Mantri
So FY ’26 onwards, as Mr. Khulbe mentioned, is that it takes two, three quarters to ramp it up. So FY ’26, we should see a good utilization of this — under this project. Cash flow-wise, that obviously idea is to bring the cash flow is to strengthen the parent company cash flow. It’s 100% substitute. So — and there is a mechanism to have a regular dividend from that entity to — coming to India level or our Singapore subsidiary level. And we’ll continue to have as per our overall capital allocation pool. So it will be part of the overall cash pool which we have.
Vikash Singh
So that the 1 million tonne Indonesia which we are putting up there, for that the cash flow firstly would go from India, and this cash flow probably arising later on, so would come back later on. Is that a right understanding? That INR750 crores which we were supposed to invest in the Indonesia further?
Anurag Mantri
So, right, it’s not that the downstream subsidiary route is different. It’s not that Indonesia to Indonesia we can — we will transfer the money. Both projects are separately — completely separate and as in separate entities. Overall cash pool, you can say yes, but it’s not that one RK money will immediately be divert without bringing to India, the answer is no.
Vikash Singh
Understood. And just one last question. Any update on…
Operator
Mr. Vikash, may I please request you to come again in the queue for a follow-up question?
Vikash Singh
Okay. Sure.
Abhyuday Jindal
Thank you.
Operator
The next question is from the line of Anupam Gupta from IIFL Securities. Please go ahead, sir.
Anupam Gupta
Yeah. Thanks for the opportunity, sir. Just a couple of questions. Firstly, you said that Chromeni is the priority. So when do we see sort of ramp-up starting from at Chromeni and what sort of volumes we should build in for this year?
Abhyuday Jindal
So Chromeni, by the end of this quarter, we are expecting it to start. And then immediately after that, we believe it should start getting ramped up. And we are very confident looking at the equipment and conditions over there that we should be able to ramp it up very fast.
Anupam Gupta
Okay. Understand. And secondly on the debt side now that you have seen a reduction in this quarter, what is the expectation of debt for the end of this year?
Anurag Mantri
So our end-of-year guidance — because since some of the volumes guidance we have been reduced, what we are saying that we will not have an increased debt, and because of all this reduction in working capital optimization which we are doing, that will help us to make up that case. So we are maintaining that around INR5,500 crores of year-end debt guidance.
Anupam Gupta
Okay. Understand. Yeah. That’s all from my side.
Operator
Thank you, sir. The next question is from the line of Ashish Kejriwal from Nuvama Wealth Management. Please go ahead, sir.
Ashish Kejriwal
Yeah. Hi. Thanks for giving me an opportunity. So two quick questions. One, though export market we have seen witness no weakness in demand and all, but if you look at even in the domestic market, we have delivered around 11% Y-o-Y growth in the first half, which is very much lower than 20% what we had expected earlier. So is it mainly because the overall demand is relatively weaker than what we expected, or are there certain segments which we don’t want to go because that will hurt our margins again? That’s my first question.
Abhyuday Jindal
Yeah. That is — the second part is the main reason, Ashish, because domestic market being fairly decent volume and decent size, so we could have definitely increased our volumes, pushed more volume in domestic market, but that would have severely hit our margins. So we took a call that we should definitely increase volumes, push volumes, but in those areas where we have good margins and earnings. So that’s why it was more a strategic call from this angle. Otherwise, definitely, we can show you a very high growth in India very easily.
Ashish Kejriwal
Understood. But this was the expectation in the beginning of the year?
Abhyuday Jindal
There was a plant shutdown, yes. Q2 had a plant shutdown of 10 days to 15 days hovering between two months. So that is why also volumes in domestic are little less in Q2.
Ashish Kejriwal
Okay. So overall, you are saying that in second half in domestic market at least we can have 20%-plus growth? So demand is not an issue?
Abhyuday Jindal
We can — see, again, we can show you, but it’s a factor of margin versus that. So it totally depends on the factor of both of them. But definitely, 10% to 15% definitely we can.
Ashish Kejriwal
So why are [Speech Overlap] because at the beginning of the year also when we are giving the margin guidance as well as volume growth guidance, the only thing which is lacking mainly because of the export market. Now even if I exclude export market, then even in the domestic market, we are not seeing that same thing.
Anurag Mantri
Actually, I understood your question. Basically what we are saying is that overall volume guidance of 10% to 15%. And if we assume export of around 10% next, then domestic market what we are saying is that our target is that 15% to 20% of domestic market growth.
Ashish Kejriwal
Okay. Second question is related to that old blast furnace which they put in us different promoter’s group company. But earlier we were thinking that if we can use part of their pig iron, that will be economical to us. So any color on that which we can give?
Anurag Mantri
See, Ashish, that project is completely separate out of JSL. And JSL has no obligation of the — to take that material. It will be completely looked at on an arm’s length basis, on a commercial basis. So that will surely — obviously, the idea was that for especially the ferritic grade series, 400 series, it could help if we get the material from this route. So it could help us in bringing the cost down for further for the 400 series. But all this will once the project start, that time we have a choice. But there’s no commitment or obligation for us to take that material.
Ashish Kejriwal
Yeah, I agree. That’s what I was asking whether when the projects are going to be started so that we can have some cost benefit, if it’s possible.
Anurag Mantri
Project is expected to start probably somewhere in next — end of this financial year or early next financial year.
Ashish Kejriwal
Okay. Fair enough. Then we can have a look on cost side. Thank you, sir, and all the best.
Operator
Thank you, sir. The next question is from the line of Tushar Chaudhari from Prabhudas Lilladher Private Limited. Please go ahead, sir.
Tushar Chaudhari
Yeah. Good evening. sir. Congratulations for the good set of numbers despite weak exports. Sir, just a question on Chromeni. You said it’s our priority and it will start by end of the quarter. While earlier conversation, I guess, we were trying to start it in November. And so is there any delays over there? Are we seeing any problems? And what is the — is there any going to be meaningful volumes in FY ’25? How much volumes we expect ’25, ’26?
Abhyuday Jindal
Definitely. See, we were first, like you said, looking at early November to start, but now we’re saying that towards end of — middle of December to end of December. So it’s hardly one-, 1.5-month delay. But that’s only because of when you enter a new plant, there are certain things that we need to rectify and improve upon. And also, in October, there were severe rains. So for 15 days almost, you could practically not do any kind of work on the equipment, on the software, on anything. So that was another kind of issue that we faced, which now everything has been rectified. And if the plant, which we’re all on track to commission it by end of this month, end of this quarter, then we should see some decent volumes in FY ’25.
Tushar Chaudhari
Okay. So out of 600, let’s say, can we expect around 10,000-odd in FY ’25? And ’26, I would be more looking out for volumes?
Abhyuday Jindal
Much, much more than 10,000. 10,000 is maybe a monthly target almost. So definitely higher than 10,000.
Tushar Chaudhari
Okay. Thanks a lot, sir.
Operator
Thank you, sir. The next question is from the line of Kirtan Mehta from BOB Capital Markets. Please go ahead, sir.
Kirtan Mehta
Thank you, sir, for the opportunity. Could you share the series mix for this quarter?
Shreya Sharma
Series mix? Yeah, sure, Kirtan. I’ll just [Technical Issues] So I’ll say it in order of 200, 300, and 400 series. It was 35%, 47%, and 17%. And this is for the quarter.
Kirtan Mehta
Right. And in terms of the — we said that we are not changing our FY ’26 guidance. So that remains basically the 20% volume growth with INR18,000 to INR20,000 margins. That’s what we are sort of reiterating and remain optimistic about. Is it subject to sort of the export mix going back to 15%?
Anurag Mantri
So, no. ’26 guidance, we have not given a ’26 guidance as such per se. What we are saying is that we are on track in terms of the way facilities will be utilized because all these things what we have explained is that are temporary, like Red Sea issue is not expected to be continuous. Hopefully, West Asia war is. If we assume that everything is a permanent nature, then it’s a different scenario all together. But all these are temporary measures. We believe that we are — the kind of domestic demand we are seeing in the market in the premium segment is giving us a robust boost to our volume. So we will continue to hold on that.
Kirtan Mehta
Sure. One last question was on the — we had earlier said that we’ll guide on the tax shelter later. Is there any update where you can suggest the available tax shelter from the acquisitions?
Anurag Mantri
Tax shelter of — see, every subsidiary has a different, different sort of tax shelter. In fact, say, for Rathi and Rabirun, we’re in the range of INR100 crores and INR200 crores of acquisition cost only. So they have a different — they have some tax shelter. Than Chromeni is some of the losses are there. But I think let’s wait this plant to ramp it up and we’ll have to see and then test those waters actually. So I would say that don’t build it up right now too much on the tax shelter. But yes definitely I would say, it will always be a good positive tax shelters which we will get.
Kirtan Mehta
Fine, sir. Thanks.
Operator
Thank you, sir. The next question is from the line of Pallav Agarwal from Antique Stock Broking. Please go ahead, sir.
Pallav Agarwal
Yeah. Good evening, sir. So just had a question on the outcome of the China stimulus effort. So we’ve seen a lot of news flow from there. So what would be the view on whether this will actually help domestic demand over there and probably reduce some of the dumping into India?
Tarun Kumar Khulbe
Well, this is what even we expect, and we are also happy with the China stimulus because we also believe that this should help the domestic demand in China and should reduce the pressure, the compulsion of those Chinese Stainless steel producers to dump outside. However — but we will remain watchful because this is also true that China has much, what should I say, much larger capacity than what they need for their domestic consumption.
So while on one hand, we are — we also feel good about it, but then we would remain a bit watchful before we conclude on this.
Pallav Agarwal
Sure, sir. And like the carbon steel manufacturers probably are asking for more stricter implementation of quality standards. So is something like that on the annual for stainless steel as well?
Tarun Kumar Khulbe
Yes, stainless steel industry is also asking for stricter implementation of quality standards. Because two things on this what is happening is, one, wherever government has declared the QCO, the need to strengthen the implementation process on the ground, like even checking at the customs and all. So — but definitely wherever — I mean, on these aspects, the industry is — we are in discussion with the government and we are asking — suggesting them also the ways and means to strengthen the implementation of whatever decision they are making. And whatever area it is remaining, they are suggesting them and helping them to come out with more such kind of QCO orders.
Pallav Agarwal
Okay, sir. Sir, lastly, so nickel prices really haven’t recovered unlike probably some of the other non-ferrous prices. So what’s holding back, like — why are the nickel prices so subdued for so long?
Anurag Mantri
I think [Indecipherable] rightly placed to answer this question because as a risk management policy what we have done is that we have stopped taking call on the nickel or any of the forex. And that’s how you see a more consistency in our NICs. We just do a completely natural head sort of balancing in our process so that it remains more as a with a certain time lag 30 to 45 days, goes into — it gets passed on to the consumer.
So difficult for us. I think I can see in the call you will have much larger better people and intelligent people who can actually predict the nickel prices. But frankly, it’s difficult for us to see and comment on this.
Pallav Agarwal
Right, sir. Thank you so much.
Operator
Thank you, sir. [Operator Instructions] The next question is from the line of Prasanth Gopal from Spark Asia Impact Managers. Please go ahead, sir.
Prasanth Gopal
Hi, sir. What will be your exposure to government infrastructure projects? Any rough estimate, if possible?
Anurag Mantri
Sorry, your question, we could not hear you properly. What is the question?
Prasanth Gopal
Yeah. What will be our exposure to government infrastructure projects? Any rough estimate if you have?
Anurag Mantri
Directly, it’s like this. We have a, like, project of railways. If you see, end user is all government, even whether it’s a forge factory, whether it’s infra. But it’s not direct projects with the railway ministry as such. But we would develop with them, but we don’t supply directly on that because we supply to like coach factories, we then provide to fabricators, the contractor who is doing the railway infra upgradations. Similar thing happens in the highways and rail overbridges, so…
Tarun Kumar Khulbe
So on the on the infra side, it is picking up, I will say, gradually stainless steel is getting acceptance. And as we already stated that the Ministry of Highways, they are also now issuing orders for compulsory usage of stainless steel in the coastal area. So with this, we believe that in infrastructure, the stainless steel demand should come up in the coming time in a far more stronger way.
Prasanth Gopal
Okay. Noted, sir.
Operator
Thank you, sir. The next question is on the line of Kirtan Mehta from BOB Capital Markets. Please go ahead, sir.
Kirtan Mehta
I’d like to take opportunity to ask one — couple of more questions. We are developing the other exports market like South Korea, Middle East, South America, Japan. What would be proportion of them in our export mix out of the 10%?
Anurag Mantri
It’s actually very less right now because these are — see, when you start into any new market, initially it’s only a very starter and you do the more testing of the waters and sticky the segment and the product range. So it’s starting. We are seeing a positive result. So like, country like Japan, we never exported earlier in the past and it was there. So we — then we have proven the quality, then we can actually get into those markets also.
So I think the volume-wise, it’s very less. I would say still largely dominated by China and Vietnam in our import — sorry, import side. Sorry, your question is on export side. Export side is predominated by the U.S. and European markets.
Kirtan Mehta
Right, sir. And in terms of the second question was about the, we have seen another round of nickel weakness during the quarter. So is there possibility that it could lead to any inventory valuation loss in the next half?
Anurag Mantri
See, as we mentioned, is that we try to work on a more — we don’t do the inventories buildup on in anticipation to that. We generally do try to do to create a balancing of the nickel in and nickel out strategy. And sort of almost a natural hedge with a 30 to 45 days’ time lag. So last time also you would have seen even in a — so immediate dip, we — if it’s a very consistent dip, then only — so we try to keep mitigating with the pass-on as well as the product mix. But if it’s a continuous, say, nine months or 10 months, then at some time, it could hit, but then it recovers also faster. So it’s both ways, right?
So practically, we don’t have too much of — we don’t — we keep our — try to keep a static range of the nickel exposure in our system.
Kirtan Mehta
Thank you for this clarification.
Operator
Thank you, sir. The next question is from the line of Ritesh Shah from Investec Capital Services. Please go ahead, sir.
Ritesh Shah
Sir, is it possible to provide more color on Chromeni, likewise on Rathi on the monthly run rate which is possible, say, three months out, just to get a better sense from a modeling standpoint?
Abhyuday Jindal
So Chromeni, I mean, if you talk of the capacity, the installed capacity of the equipment, then the design capacity is around 50,000 tonnes a month. Of course, these capacities are designed with a certain product specification. And these can go up and down depending upon what product you are actually processing there. So we believe that we should be ramping up towards these nameplate capacities. And in a couple of quarters, we should be closer to good utilization of these capacities.
Ritesh Shah
Right. And sir, Rathi and RUBL, what is the stated capacity?
Shreya Sharma
So for Rathi, Ritesh, it’s 160,000 tonnes. And for RBL, it’s around 50,000 tonnes for the PNT, pipe and tube.
Ritesh Shah
Okay. And specifically for Rathi, possible to quantify the monthly run rate given we have indicated like 70% utilization by FY ’25?
Abhyuday Jindal
So actually, when this capacity — when Shreya said, it is only for wire rod. But when you produce, again, as I said that all these capacities start varying depending upon the product you make, so when you make rebar, then the capacity starts coming down. So with a certain product mix, the kind of product mix, what we are anticipating, the capacity should be around 120,000 tons a year. And I mean, that should be the capacity with the product mix.
Anurag Mantri
And right now, we are at close to 60,000 tonnes in Rathi. So right now, we have not moved to a rebar side. But as we move to a rebar, the capacity comes down but the margin also improves then.
Ritesh Shah
Sure. So just two more questions. I think in one of the earlier questions, you made a remark that had it not been for the focus on profitability, we could have done better volumes locally. So the simple question is as we look to ramp up all this downstream capacities, is it something when the profitability will be maintained and we are confident on the volume offtake?
Anurag Mantri
Because, see, these are finishing lines. So surely, I think, right now we are constrained with our cold roll capacities. So certain range of the product then we don’t have a choice but to get into a different segment right now, so which will obviously — so we should improve the margin overall. The volumes which we can sell in the market at our targeted margin levels.
Ritesh Shah
Sure. That’s helpful. And last question, sir, would you like to just rehash on our capex numbers what we had given for three years and what we intend to achieve for FY ’25? Is everything on track over there or if at all any changes, would be good to know? Thanks.
Anurag Mantri
No, everything is on track. In fact of this year, INR5,500 crores which we target to spend, almost half of has been spent INR2,700 crores, INR2,800 crores has been spent in H1. We are on target to that. And we have, as I mentioned, that though some of the volume guidance, it’s coming down from 20% to 10% to 15%, but we don’t expect the debt to increase because we have managed to with this reduction in volume and some working capital optimization to release cash in the system through that too.
Ritesh Shah
Sure. That’s quite useful. Thank you so much.
Operator
Thank you, sir. That was the last question.
Ladies and gentlemen, I would now like to hand the conference over to Mr. Ritesh Shah for closing comments.
Thank you, and over to you, sir.
Ritesh Shah
Thank you, Riti. Over to you, Anurag sir, if you have any closing comments, please. Thank you so much.
Anurag Mantri
Let me thank everyone for attending this call. We are positive that strong economic activities will be driving the demand for stainless steel across the sectors in the domestic market. And we are set to take advantage of these prospects owing to our competitive pricing and efficient delivery cycle.
I hope that we have been able to answer all your questions in a satisfactory manner. Should you need any further clarifications or if you would like to know more about the company, please feel free to contact our investor relations team. And a lot of information is available on our website as well.
Thank you so much.
Operator
[Operator Closing Remarks]