JSW Steel Ltd (JSWSTEEL) Q1 FY23 Earnings Concall Transcript

JSW Steel Ltd (NSE:JSWSTEEL) Q1 FY23 Earnings Concall dated Jul. 22, 2022

Corporate Participants:

Ashwin Bajaj — Group Head of Investor Relations

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

Jayant Acharya — Deputy Managing Director

Analysts:

Amit Dixit — Edelweiss — Analyst

Pinakin Parekh — JPMorgan — Analyst

Vishal Chandak — Motilal Oswal Financial Services — Analyst

Indrajit Agarwal — CLSA — Analyst

Abhijit Mitra — ICICI Securities — Analyst

Satyadeep Jain — Ambit Capital — Analyst

Prashanth Kumar — Dolat Capital — Analyst

Sumangal Nevatia — Kotak Securities — Analyst

Ritesh Shah — Investec Capital — Analyst

Alexandra Symeonidi — William Blair — Analyst

Bhavin Chheda — Enam Holdings — Analyst

Love Sharma — Lombard Odier Investment Managers — Analyst

Amit Murarka — Axis Capital — Analyst

Kamlesh Bagmar — Prabhudas Lilladher Pvt. Ltd — Analyst

Anuj Singla — Bank of America — Analyst

Abhiram Iyer — Deutsche Bank AG — Analyst

Ashish Kejriwal — Centrum Broking Limited — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Q1 FY ’23 Earnings Conference Call of JSW Steel Limited. [Operator Instructions]

I now hand the conference over to Mr. Ashwin Bajaj, Group Head of Investor Relations at JSW Steel Limited. Please go ahead, sir.

Ashwin Bajaj — Group Head of Investor Relations

Yes. Thank you, Peter. Good evening, ladies and gentlemen. It’s a pleasure to welcome you to JSW Steel’s earnings call for Q1 FY ’23. We have with us today the management team represented by Mr. Seshagiri Rao, Joint Managing Director and Group CFO; Mr. Jayant Acharya, Deputy Managing Director; Mr. Rajeev Pai, Chief Financial Officer; and Mr. G.S. Rathore, Chief Operating Officer.

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

Good evening. Good evening to everybody. This quarter, which has gone by, was one of the toughest than the current new quarter, particularly on the back of Russian-Ukrainian war, which has brought in extreme uncertainty and extreme volatility in the market, but for the commodity market. So this has given a major shock in the steel market. Opening of pattern of global trade has changed and the largest ever increase in energy prices, and all what further aggravated with the sanctions from Russia and trade restrictions, labor shortages, logistic bottlenecks, over and above to contain inflation, the contractually fiscal and monetary policies that are being followed by countries and Central Banks.

So this has caused a lot of uncertainty and volatility in the markets.

To contain inflation as the major objective of several countries and the governments, they have changed the policies, they have changed the priorities, the Indian government in line with that have imposed export duty also in the month of May of 15% and export of 15% [Phonetic]. So all this together was challenging quarter, but what is interesting here if I really see the whole steel industry, the overall steel production in my view has increased quarter-on-quarter. Generally, the impression is year-on-year the steel production for the first six months of the year has fallen, but which is not really true. The largest producer and consumer of steel that is China. Quarter-on-quarter, their steel production went up by 16.5%. They have produced 284 million tonnes as against 243 million tonnes, which is 40 million tonnes of new steel China has produced.

What did they do? Their exports went up by 54% in the Q4 over Q1. They exported 20 million tonnes of steel adding 30 million tonnes in the Q1. So all this is to see country-by-country overall trade flows. There is more production, more exports, falling demand and reducing imports. So this has caused a fall in the steel prices. There is a fall of over 20% in the global steel prices; maybe in Europe and US, it is much more. So this is the context in which we have delivered the results from JSW. One more point, which we observed as for the Indian steel industry is concerned completely in contrast what I just explained in the global markets where stainless steel production sequentially went up. The Indian steel production sequentially came down, but year-on-year it increased. So this is majorly in my view attributable to the imposition of export duty, which has brought in a big psychological factor in the user industry.

With that if I see as for as JWS Steel is concerned, we have produced 5 million tonnes of crude steel on stand-alone basis. We have taken — we have preponed certain shutdowns. Otherwise, we could have produced at least 0.5 million to 0.7 million tonnes both production in the last quarter. So our Indian operations, including Bhushan Power and Steel, we produced 5.62 million tonnes. Our capacity utilization with Bhushan Power and Steel was 89% as against 103% in the Q4. Our capacity utilization in the existing operations other than Dolvi expansions, if you look at it also, came down to 93% from 98% in the Q4. So therefore, we have moderated production; otherwise, production could have been higher.

If I see the sales are concerned because of export duty imposition, then the steel exports from India came down by 26%; even our exports in the last quarter came down by 35%. We could do it like 83,000 tonnes of exports as against 1.35 million tonnes in the Q4 of last year. So exports have fallen by 20% of the total volume of sales.

Consolidated sales, including Bhushan Power, was 4.33 million tonnes. The blended sales realizations because of price hikes that have happened in the month of April, overall blended basis, it went up by 9% in the quarter, whereas cost pressures were very high, as we guided in the last call that the coal — coking coal impact would be there in this quarter to the extent of $125 per tonne. We have seen $113 increase in the coking coal price. The [Indecipherable] fall in prices have not fully reflected in the last quarter. So all together, the cost went up by 21%. That’s why on a stand-alone basis, the EBITDA per tonne was INR8,311 metrics per tonne; that is 10.8%.

The coated business also has not done well because of huge amount of inventory losses in the company. Their export could not take place; both together volumes also did not do well. So both together, there was a negative EBITDA as far as coated business is concerned. Bhushan Power and Steel made EBITDA of INR698 crores; INR14,541 EBITDA per tonne.

So the domestic subsidiaries, their net contributed, including Bhushan Power and Steel, INR743 crores. Our US operations $34.2 million, both Ohio and Baytown together. Italy was positive EUR4 million. So overseas contributed INR276 crores. So the EBITDA on a consolidated basis, INR4,309 crores. EBITDA per tonne on a consolidated basis is INR9,601. But there are four one-off items, which are very, very, important for us to understand. These one-off items are one is the foreign exchange rate fluctuation. We have been explaining our hedging policies that we will hedge 100% on the revenue account. But on the capital account whatever installments that are falling due for the next 12 months we will hedge; balance is unhedged. Rupee depreciated in the last quarter by over 4%. So we also translate our outstanding foreign currency loans at the exchange rate prevailing as on June 30, ’22. So the impact on that of this foreign exchange translation on profit and loss account was INR747 crores on a consolidated basis.

The second item of one-off item is NRV provision. When the steel prices started falling, when the input prices started falling, the inventories are to be revalued, net — on a net available value basis. So those — that impact has come close to INR813 crores to P&L in the last quarter. Imposition of export duty has put additional burden of INR242 crores on exports, which we have made. In the US during COVID time, US government has given to medium enterprises grants. Our subsidiaries got a grant of $10 million. Subsequently on review, they said, it is not a corporation located in the US. It is a foreign corporation because 100% is owned by parent, outside the US. So they canceled the grant, so that $10 million, approximately INR80 crores are made of provision. All this together was INR1,880 crores, which will translate to INR4,342 per tonne.

So if I take INR961 reported EBITDA and this INR4,342 if you make adjustment, then the total EBITDA on a consolidated basis is INR13,943 per tonne. Similar adjustments we will have to do in stand-alone basis. Stand-alone basis once you made adjustment, the EBITDA per tonne is INR12,086 as against INR8,300 that is reported. Considering this, the profit after-tax on a consolidated basis was INR839 crores.

Our net debt has increased by INR10,570 crores. So this was at INR67,224 crores. This INR10,500 crores increase in the debt is majorly on account of inventory accretion. The investment in the working capital was INR7,874 crores. So as I mentioned, 1 million tonne of accretion to inventory in the last quarter, we produced more despite moderation; of exports, we could not do. On domestic, there was a weakness in the apparent consumption. Both together, we had to invest in the inventories here. So that amount was INR7,870 crores. Foreign exchange translation increased the debt by INR1,400 crores, so balance these capital expenditure-related increase. So this INR10,500 crores, a significant portion, we will be able to bring back the cash flow on unwinding of inventory in the balance three quarters.

With that, our debt-to-equity was 0.98. Our debt-to-EBITDA was 2.03. Our capital expenditure, cash flow spent was INR3,702 crores in the last quarter. Our revenue acceptances were $2.7 billion. Our capital expenditure acceptances were $13 million.

So as per our projects are concerned, we have reviewed the project. We have given the guidance of INR20,000 crore capex initially. We have not slashed any of the capex on the expansion projects of 7.5 million tonnes at Vijayanagar, and also the expansion with Bhushan Power and Steel to 5 million tonnes. Those are untouched. Any other capital expenditure, special projects or any discretionary capex that we have reviewed, we thought we should bring down the discretionary and special project capex until situation improves. So we have moderated our capex by INR5,000 crores in this year from INR20,000 crores to INR50,000 crores.

So with that, we will take questions if anything is there. Thank you.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Amit Dixit with Edelweiss. Please go ahead.

Amit Dixit — Edelweiss — Analyst

Yeah. Hi, good evening, everyone. Thanks for the opportunity, sir. I have got two questions. The first one is essentially on your BPSL realization. So, if I compare BPSL realization with the stand-alone realization, there is a lot of difference between the two. In fact, the blended realization for BPSL is up like INR20,000 per tonne in this quarter. So just wanted to understand the key drivers of the same?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

The BPSL, there is bigger [Phonetic] sale. So the profit on the [Indecipherable], which was existed in the INR698 crores and then calculate the EBITDA pertaining to steel operation, it comes down to INR11,000 per tonne. So this INR11,000 versus INR8,300 stand-alone basis of the JSW Steel if you compare, the iron ore is cheaper in the case of BPSL compared to JSW Steel. There’s the two main reasons why we find apparently the EBITDA of BPSL is higher.

Amit Dixit — Edelweiss — Analyst

Okay. The second question is essentially on the cost guidance for this quarter, Q2. What kind of coking coal reduction and iron ore reduction per tonne of steel do you see?

Jayant Acharya — Deputy Managing Director

So coking coal, we are likely to see a reduction in the range of $50 to $60 per tonne going from quarter one to quarter two. Iron ore, the reductions, which have happened in the market, have not been reflected fully. So part of that reflection will come in the quarter two. And we — given the fact that international prices are moderating further in iron ore, we do expect some moderation going ahead in this quarter.

Amit Dixit — Edelweiss — Analyst

Is it possible to quantify the iron ore reduction as you have done for coking coal?

Jayant Acharya — Deputy Managing Director

Iron ore, different areas, different locations, we will have a different number because based on Fe, so it’s difficult to quantify a number.

Amit Dixit — Edelweiss — Analyst

Okay. Thanks, and all the best.

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

Thank you.

Operator

Thank you. Our next question comes from the line of Pinakin Parekh with JPMorgan. Please go ahead.

Pinakin Parekh — JPMorgan — Analyst

Yeah. Thank you very much, sir. So my first question is, I’m trying to understand export. At this point of time given where the export duty is and given where the export realizations are, would the company be exporting any steel at this point of time?

Jayant Acharya — Deputy Managing Director

Yes, we are exporting steel basically to certain locations and certain products, but the export volumes are far lower than our normal volumes, naturally given the fact that the export duty makes it totally unviable and secondly, the general moderation in the global demand as well.

Amit Dixit — Edelweiss — Analyst

Sure. Sir, my second question is given — if the export duty is not removed in the course of the year, would it be fair to say that the volume guidance on sales given for FY ’23 would be — would see downside this.

Jayant Acharya — Deputy Managing Director

So, we do not expect the export duty to continue for long. This was a measure — temporary measure to contain inflation. We have seen — in inflation numbers, if you see the — while it is not fully translated yet, the component of steel price in inflation has fast gone down. So we do expect moderation going forward or removal going forward. So we see this as purely temporary and maybe in H2, the opportunity to export will come back.

Amit Dixit — Edelweiss — Analyst

Understood. Thank you very much.

Operator

Thank you. Our next question comes from the line of Vishal Chandak with Motilal Oswal Financial Services. Please go ahead.

Vishal Chandak — Motilal Oswal Financial Services — Analyst

Yeah. Thank you very much for the opportunity. Sir, just following up on the iron ore, iron ore generally the lag in purchase and consumption is about 15 days compared to about two months for coking coal. So I would presume that there would be a fair amount of visibility on the iron ore pricing, given the fact that almost everything is localized. So could you just give us a sense of how much lower — was it any in Q1 versus Q4? And what kind of ballpark number it would be probably in the next quarter?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

Vishal, here, in the case of iron ore is concerned, we have captive supply and also we buy in the market. We buy in the market, I agree with you. But in the case of our captive supply, 52% of the total consumption of iron ore is now from captive in the quarter one. So in this case what is happening is the premium, which we have to pay on the auction mines to the government is based on last declared IBM price. IBM, there is a lag of two months in declaring the price.

Number two, if you compare the IBM prices, Vishal, with the market prices, IBM prices are not getting adjusted in line with the market prices. There is an anomaly. That is why we are hesitant to give a view on what would be the iron ore price because as on date, IBM declared for April; May/June price not yet declared. So there is already 2.5 months lag as on date. So whatever we can do, whatever we dispatch in this month, we have to pay premium based on April. And whether — as and when IBM declares the price, whether premium will get adjusted like royalty, there is ambiguity in north. So therefore, a dispute, which is going on even on that. That is why IBM, the iron ore price, we are hesitant to give, how much it could be the impact.

Vishal Chandak — Motilal Oswal Financial Services — Analyst

So that is absolutely clear, and thank you very much for this elaborate answer. So my second question was with respect to the overseas operations, do we foresee in the near term to close down European operations at least given the fact that there have been quite a number of challenges since we have acquired them?

Jayant Acharya — Deputy Managing Director

No. So in the last quarter, if you’ve seen the European operations yielded positive EBITDA. The rail orders from RFI, which the pricing also got clarified, so therefore, we were able to get a positive EBITDA there. Going forward, we are expecting that the rail orders from the Italian rail will be forthcoming. With that, we expect to maintain a positive kind of an EBITDA going forward. While we are looking, we may continue to look for opportunities maybe to partly divest the assets in case there is a possibility or economic sensible possibility to do so, but we may continue to hold the rail mill in the asset.

Vishal Chandak — Motilal Oswal Financial Services — Analyst

Thank you very much sir. I have questions. I’ll join the queue. Thank you.

Operator

Thank you. Our next question comes from the line of Indrajit with CLSA. Please go ahead.

Indrajit Agarwal — CLSA — Analyst

Hi, thank you for the opportunity. I just have one question. So as you also highlighted downward pressure on global iron ore prices. So — and we have seen global steel prices now hovering around INR600 plus per tonne. Chinese coking coal prices are now much lower than maybe Australian or coking coal prices have softened as well. So with that light, how do you see global prices as we head into seasonal weakness in China? And do you see, as a result, we could start seeing some bit of imports coming back into the Indian market?

Jayant Acharya — Deputy Managing Director

Yes, we have seen some import into India from Russian sources, not as much from the Chinese yet, although their exports have been elevated. But the Russian ruble being now far stronger, we see a reluctance from the Russians to offer that kind of a competitive pricing going forward.

The — on the Chinese side, while we export volume because of COVID restrictions in China, the exports have also increased, but their costs are elevated. The $600, which you are talking about, are spot deals, which are being done by traders, which are offloading stocks to derisk their working capital. It is not something, which is being offered by primary mills since the cost doesn’t support this price.

So my sense is that given the current cost structure, there is not much room for prices to fall further. The prices are likely to be range bound. There is a feeling that by and large situation has bottomed out and therefore, we do see some buying coming back. On top of that in certain global markets, as you may have read the print as well, there are shutdown of blast furnaces and moderation in production, particularly Europe, and that also is leading to a slightly better sentiment with respect to global buying.

Indrajit Agarwal — CLSA — Analyst

Sure. Thank you. With that note, how are the current NSRs in India versus first quarter average? And any outlook you can provide for the following two quarters and — in India operation?

Jayant Acharya — Deputy Managing Director

So I would say that prices are by and large exit of June, I would say the price of July would be range bound. We don’t see much variation going forward because the cost structure remains on a higher plane because of the raw material holdings, which most steel producers have. So prices range bound, but cost going forward will reduce. So therefore, by October, all the inventory of high cost raw material will get consumed. And we see margin improvement from quarter three onwards.

Indrajit Agarwal — CLSA — Analyst

Sure. Thank you so much.

Operator

Thank you. Our next question comes from the line of Abhijit Mitra with ICICI Securities. Please go ahead.

Abhijit Mitra — ICICI Securities — Analyst

Yeah. Thanks for taking my question. I have two questions. First of all on the realization, the QoQ data that we are seeing, how much of it is timing of sales — how much of it is auto contract derivative increases, if you can sort of help us understand? And second is on the power cost. So I think in the call yesterday of JSW Energy, they were saying that because of Russian coal imports, their costs have been pretty much controlled. So just want to understand that same structure would have flown into our power cost as well, right? So just to sort of clarify on this too. Thanks.

Jayant Acharya — Deputy Managing Director

The second question first, no, I think we have clarified this last time probably as well that we have been buying coal from Russian sources, particularly certain metallurgical coals, which qualitatively have been required and continue to be required in our operations. So we continue to source similar kind of coals because it’s not possible to overnight replace those. That having said, I think the general price of coal if you have noticed except for thermal generally on a software trajectory, it’s correcting downwards. That will reflect going forward in our books as well.

The questions on NSR, which you asked, I can only say that yes, auto contracts partly are closed. Some of the long product contracts have just been closed. So that gives an increase in quarter one, but the — it’s getting divided into two parts. So there is an increase in quarter one, and there is a decrease in quarter two. So just to give an example for long products, not that it holds for all producers as yet, but some of the major producers have given an increase of INR9,000 in quarter one and a drop of INR4,000 in quarter two, which is in July-September. And quarter one pertains to April-June. So we are still in discussion with some of the auto majors to close this number; some are already closed; some are in the process of getting closed.

Abhijit Mitra — ICICI Securities — Analyst

Okay. My question on the coal side was more on power cost, I think on the thermal coal price. So the increase in power cost that we have seen, will it sort of stabilize here or come off, how do you see it?

Jayant Acharya — Deputy Managing Director

It will moderate because we are using a mix of different coals as well. So the power cost will also moderate.

Abhijit Mitra — ICICI Securities — Analyst

Okay. Okay. Thanks. Thanks. That’s all from my side. Thank you.

Operator

Thank you. Our next question comes from the line of Satyadeep Jain with Ambit Capital. Please go ahead.

Satyadeep Jain — Ambit Capital — Analyst

Hi, good evening. Thank you for the opportunity. First question is on capex. I think recently you indicated increase in capex in Vijayanagar. With the recent moderation in commodity inflation and stuff, is there a possibility of that being revised down or have you already has an equipment order? And how do the [Technical Issues] budget for the next three years, how would you look at the capex for the next two years after INR15,000 crores of capex this year? That’s the first question.

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

So we look at maybe medium term committing capital expenditure as part of strategic plan. So India, we are very optimistic with regard to the overall building infrastructure and also other sectors of the economy either you take auto, you take packaging industry, maybe the renewable industry, appliances, they are all having a lot of risk potential, whereas a very few players in India, who are capable of creating new capacity. So that is why we are not changing our plans on the capex for expanding our capacity by 7.5 million tonne at Vijayanagar, nor expanding capacity at Bhushan Power & Steel to 5 million tonne. So they are on track. We already placed orders. Project work is in full swing at the site. Only what we have reduced the capital expenditure is relating to special projects, other discretionary projects. So our view on the outlook over growth in steel demand in India, it remains intact.

Satyadeep Jain — Ambit Capital — Analyst

So, what would be the capex after — so you’re looking at INR15,000 crore this year. Are you still maintaining that INR48,000 crores of capex guidance as we sit here today for the next three years?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

Only the INR5,000 crores we have put it on hold. So INR48,000 crores remains for the next few years. So as and when situation improves, this INR5,000 crores will take a call.

Satyadeep Jain — Ambit Capital — Analyst

Okay, sir. Secondly, on the entire decarbonization capex, you indicated, I think, INR10,000 crore of capex, including — that including you won the order for renewable energy. What is the remaining capex that you would expect to be incurred in that INR10,000 crores? And is there opportunity to add more WHRS to the existing units? I think in the upcoming plant, you are looking at WHRS. Is there potential to capture more of waste heat from CDQ and stuff in the existing plants that you have?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

We have already have two plants moving the coking coal gas and the other eight at Dolvi. That is 175 megawatt 1 unit, just commissioned a few days back. There is another 60 — another 75…

Jayant Acharya — Deputy Managing Director

60 megawatt.

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

60 megawatt, there is one more plant, which will get commissioned by September. It is 170 megawatt plus 60 megawatt is 230 megawatt at Dolvi, is basically to use the heat and gas that would come in the process. So the way we are working as a part of decarbonization is reducing carbon emissions to replace our entire coal-based power plants with renewables. We are in that direction. This 958 megawatt site with JSW Energy, 225 megawatt already started. Balance will start in this financial year. Over and above that, we are also looking at seriously to commit for more renewable power in future and replace the existing fossil fuel-based power in addition to catching the fuel — the heat and the gasses that are there in the process to generate power.

Satyadeep Jain — Ambit Capital — Analyst

Okay. Thank you.

Operator

Thank you. Our next question comes from the line of Prashant Kumar, Dolat Capital. Please go ahead.

Prashanth Kumar — Dolat Capital — Analyst

So thanks for the opportunity and congrats for good results in a very, very challenging quarter. Adjusted for one-off with, the results are clearly not that bad. And sir, my question, it will — Jayant sir has just touched upon the topic of export duty and it may be removed, etc. But then, there are some unanswered questions, sir, now that have been lingering in our minds. With two months that the export duty was imposed on — and the restrictions are imposed on our sector, sir. But if you just look at the rationale and the logic, there are four, five areas, which are really contrasting to the actual logic — it is not logic — it’s not logical, actually. So the first one is, sir, steel industry as a whole is very, very challenging industry and that’s why the market as a whole also considers very low valuation. For example, if you see — if you unblock [Phonetic] the market cap, we get 1x versus various other sectors, it’s 10x, 15x, 20x. So that is a very challenging state and market is wise.

The second one is sir, there are many sectors and many of — hundreds of smaller and larger companies also, which they sell branded products and where there — when raw material prices increase, they increase the prices of the end product, but when the raw material prices decrease, they don’t come commensurately decrease the prices, sir. The prices linger for a significant amount of timeline, and it features the retail, sir.

And third one, sir. And there is some impressive management influences like their management that probably other sectors are able to do well, and we are not able to manage probably, because you see recently when the — on the oil and gas sector when there was cess, etc., imposed, many market participants, veterans came out and said this is a bad move. It will spoil the impression of the country, etc. But when it came to steel, when the duties were imposed, everyone said, yes, it’s a good move, it’s a good move, prices will decrease. So even we’re a private sector to an enterprise with private capital. So why this entire anomaly. And in just 15 days when crude prices fell from 5%, 10%, the cess was over. Yes, agreed export duty and this cess are not similar in nature; one is based on production, one is based on just a restriction.

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

Prashant, sorry to disturb. Can you please come to your question please?

Prashanth Kumar — Dolat Capital — Analyst

Sure. Yes. Yes, sir. I’m finishing that. Sir, hence — what do you see is, my view is that the prism lens used to evaluate the steel sector is not uniform and is not comparable to what is being used for other sectors sir. So with huge respect in regard to the honorable FM, etc., [Phonetic] and the government, why this step-motherly treatment with steel, sir?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

No, it’s — Prashant, thank you very much for pointing out this. And as an industry, what is that we can do is to bring the facts to the attention of the government and see their intervention to ensure that fairness is there. So we as an industry through Indian Steel Association represented to the government. We appreciate the step of the government to impose export duty not only on steel and some other items are put some restrictions. It’s our global objective of rainy inflation. So last time, 2008 also they have done and they removed the duty within a short period of time. So our view is, it is very short-term measure. Government of India is watching. And they will take a positive call on this very shortly, that is what we feel. We have made enough representations to the government.

Prashanth Kumar — Dolat Capital — Analyst

Okay, sir. Understood, sir. Thank you, sir. Sir, my second question is to Mr. Jayant Acharya. Sir, assuming the steel prices hold where they are, the domestic HRC, rebar and the export HRC, etc., and for the rest of the couple of months in the quarter. The realization dip QoQ, what is best to expect, sir? Does it comes to about INR12,000 crores, INR13,000 crores or more or less, sir?

Jayant Acharya — Deputy Managing Director

The realization, sorry, come again?

Prashanth Kumar — Dolat Capital — Analyst

The realization dip for the — between Q2 and Q1 assuming the steel prices hold at this level, now what — where they are now, for example, INR58,000, INR59,000 HRC, rebar and $650 [Phonetic] export, the realization decline QoQ is INR13,000 — INR12,000, INR13,000 are decent number to work with, sir?

Jayant Acharya — Deputy Managing Director

It could be difficult for us to quantify that. But I think directionally, the quarter one to quarter two, the prices will be lower because the price drops have happened between April to May, May to June. And as I said, June to July, it’s only marginal change. So therefore, yes, quarter two average will be certainly lower than quarter one. But I will not be able to give you a number as to how much that will be because it will also depend on the mix of things.

Operator

Thank you. Our next question comes from the line of Sumangal Nevatia with Kotak Securities. Please go ahead.

Sumangal Nevatia — Kotak Securities — Analyst

Yeah. Thanks. Sir, just one clarification. So you said July NSR is very similar to June. Is it possible to share how a July NSR with respect to 1Q as an average?

Jayant Acharya — Deputy Managing Director

It will be difficult for us to — we don’t usually give NSR numbers. So difficult to give you a number right now because today there are various moving parts. What we are trying to do, I can tell you is that we are trying to increase our domestic in the interim. So what you will see is more of domestic volume and less of export in the short term. Our focus is to see that our value-added steel focus continues, our value-added sales continue to be promoted. We continue to look at our branded portfolio and concentrate on sales of that. So that to some extent will reflect.

We also see good movement in the automotive. As we said, the automotive demand is quite positive. We see a good traction in underlying demand in most of the products and most of the sectors. So demand perspective, I think we are cautiously optimistic for this quarter. So therefore, the domestic part in the channel inventory is very low. The domestic component of the sale will be able to make up some part of the loss in exports. And since the export prices are also internationally, as we discussed, have gone down, therefore, to some extent, it will offset, on a mix basis, some of the drop, which has been there between quarter one and quarter two. But I would be more cautious to say that yes, volume part, we are more optimistic; margin part, I would say that the situation improvement we will see once the cost comes down from October onwards.

Sumangal Nevatia — Kotak Securities — Analyst

Understood. Sir, my second question is with respect to the coated business. Now, the margin there has been quite volatile in the last many quarters from — up from INR10,000 to now a loss and I believe this quarter, there will be some one-offs in that business as well. So, I mean from a value addition and from a long term given the amount of value addition we have and the downstream units we have, I mean, what sort of mid-cycle margin one should assume in this division?

Jayant Acharya — Deputy Managing Director

The EBITDA impact on coated, which you see, is primarily on account of NRV provision, which is basically on higher cost of inventory, which they are holding, which basically is a mark to market, which has been done. So we feel that going forward, coated margins also will improve, not to the levels, which we have seen last year because of higher level international price, but it would go back to maybe earlier numbers, which have been prevalent in the coated space.

Sumangal Nevatia — Kotak Securities — Analyst

Understood. And one just last clarification. I mean, what sort of inventory days do we have for the coking coal. And Mr. Rao explained that two months lag on the IBM price for iron ore premium. Is it a provisional payment where once the, say, for example, May, June, IBM prices updated, the payment is reversed or adjusted for future payments, or is it a permanent payment and there is a permanent two-month lag?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

In our coking coal, we have around 60 [Phonetic] days inventory. Then coming back to IBM question, in the case of royalty payments, the procedure is same. As and when dispatches happen, royalty is placing depending upon last declared IBM price. As and when IBM declares a price for the month of dispatch, there is a provision in the mining rules that it will get adjusted either upwards or downwards. Similar rule is not there in the case of premium. So therefore, there is a gray area where some clarifications are being sort from the government. Hope they will clarify and things will be put to rest.

Sumangal Nevatia — Kotak Securities — Analyst

Understood. Okay. Thank you so much and all the best.

Operator

Thank you. Our next question comes from the line of Ritesh Shah with Investec Capital. Please go ahead.

Ritesh Shah — Investec Capital — Analyst

Hi, sir. Thanks for the opportunity. So two questions [Technical Issues] exports have actually increased on a monthly basis, on a quarter-on-quarter. Sir, how do we see the trends over here? That’s one. And secondly, any hopes of further stimulus or policy action from China, which can actually improve the sentiment?

Jayant Acharya — Deputy Managing Director

We were not able to hear the first question very clearly. The second question, I’ll answer first, maybe you can repeat the first question. Second question, yeah China is providing — the government is providing stimulus to drive the economic activity efforts, especially post the real estate challenges, which they are facing and the COVID lockdowns, which continue to be a challenge. So we do see that some impact of that stimulus will be seen in the short term. As far as your first question is concerned, if you could kindly repeat that.

Ritesh Shah — Investec Capital — Analyst

Sir, I referred to the Chinese steel export volumes, which have actually bumped up. How do you see the trend over here? And also, if you can give some flavor that you indicated that global steel trade patterns have actually changed?

Jayant Acharya — Deputy Managing Director

Yeah. So, Chinese exports have moved up to close to 7.7 million tonnes in the last two months. But that is also primarily impact of the COVID lockdowns and therefore, impact the consumption in the domestic market, manufacturing as well as real estate, which consumed a lot of the amount of steel. But going forward, if the COVID restrictions ease and this stimulus takes effect, we feel that the exports may moderate somewhat. But we’ll have to watch that space because China remains unpredictable. So we will have to watch and see how that thing moves.

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

Just to add to the point, if I just take the Chinese apparent consumption in the Q2, it was higher by 13% over Q1. In spite of that, their exports went up. That means they produce more. 96 million tonnes they produced in the month of May. But there is a moderation in June, already came down to 90 million. So the expectation is, one is stimulus increasing the domestic demand. Number two is adjusting the steel production in line with the local demand instead of relying on exports. These two things together, I feel exports will get moderated from China.

Jayant Acharya — Deputy Managing Director

And they’ve also declared that they would like to maintain their production at the level of last year.

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

Correct.

Jayant Acharya — Deputy Managing Director

So if you see that and the run rate required, it seems that the production will get moderated to 2.75 million per day from the 3 million plus levels, which are going on today.

Ritesh Shah — Investec Capital — Analyst

Sure. That’s very helpful. Sir, my second question is we called out for spread expansion potentially into Q3. We also indicated the coking coal cost decline, which can happen in the next quarter. Sir, my question is basically, how should we look at local pricing by playing one as import-parity math and secondly, would it be even fair to look at it on export-parity basis? Just trying to get some sense given we have called up for coking coal what is — how should one understand the local pricing?

Jayant Acharya — Deputy Managing Director

So export-parity pricing, no, that usually doesn’t get. The norm is basically based on import. But import — the depreciation of the rupee and the volatility in the general import is also — now is making many customers hesitate to go too much into the international market. So I would say import, you will have to use your numbers based on import plus a certain premium, which the domestic customers will be willing to pay.

Ritesh Shah — Investec Capital — Analyst

Sure. Thank you so much.

Operator

Thank you. [Operator Instructions] Our next question comes from the line of Alexandra Symeonidi with William Blair. Please go ahead.

Alexandra Symeonidi — William Blair — Analyst

Hi, thank you for the opportunity to ask questions. I wanted to understand how you think of dividends this year given that you’re facing higher costs and a bit of margin contraction as well? Thank you.

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

We have already communicated our dividend policy. It is 15% to 20% of the consolidated net profit. As the company has done extremely well last year, the Board has taken their decision for the approval of the shareholders, which got approved that in upper end of the range, we declared last year 20%. This we have been consistently following. In the future, we will follow a similar policy, 15% to 20% of consolidated net profit.

Alexandra Symeonidi — William Blair — Analyst

Okay. So this year, you plan to pay about 20% as well. Is this correct?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

No, I’m not saying 20%, this are range. 15% minimum, 20% is outer limit. Within that range, Board and shareholders will take a call. In the last year, it was 20%, but this year based on the profitability and the cash flow requirement, Board again will take a call in this range, 15% minimum, 20% is the highest.

Alexandra Symeonidi — William Blair — Analyst

Okay. Thank you.

Operator

Thank you. Our next question comes from the line of Bhavin Chheda with Enam Holdings. Please go ahead.

Bhavin Chheda — Enam Holdings — Analyst

Yeah. Good evening, sir. So first question on this overseas operation, this plate mill and pipe is seeing very good traction of EBITDA. Is that sustainable going forward?

Jayant Acharya — Deputy Managing Director

So the US operations, the plate mill in Baytown is doing quite well. The demand pattern on the plate side is positive. While on the coil side, you may have seen that the prices have corrected. And there has also been a destocking, which has happened in the US as well. Going forward, the gap between coil and plate, which exist today may correct. It may not remain at this level. Currently, the plate prices are at $1,800 plus per short ton, whereas coil prices are in the range of 50% of that. So there would be some correction on the plate, but the demand on the plate side, we feel, is going to be positive, especially the transition to renewables calls for a lot of plate, especially the wind sector, then the barge requirements, the infrastructure requirements also are consuming plates. And given the fact that Russia and Ukraine where plate exporters and that is out of the market, we feel a demand perspective plate will continue to be better than the coil in the US operations.

Bhavin Chheda — Enam Holdings — Analyst

Yeah. So second on the, particularly the power and fuel cost, which has seen sharp escalation. So I’m assuming the majority of this is also an impact of the gas consumption cost at Dolvi operations because that I think gets accounted in power and fuel, because I believe coking coal gets covered in the raw material head. So this power and fuels part, is it driven by gas consumption cost?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

Yes. That’s correct.

Bhavin Chheda — Enam Holdings — Analyst

And obviously, that’s the formula based. So that is not coming down in the immediate term till the crude prices go down sharply.

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

Yeah, it depends upon index — gas index. There are — two to three gas indexes are there. So we have contracts, some are linked to JKM and the balance are linked to Henry Hub. So based on that, it goes on changing.

Bhavin Chheda — Enam Holdings — Analyst

Right. And one last question, sir…

Operator

Mr. Chheda, this is the operator. For any follow-up questions…

Bhavin Chheda — Enam Holdings — Analyst

Okay. I’ll come back. I’ll come back. Thank you.

Operator

Thank you. Our next question comes from the line of Love Sharma from Lombard Odier Investment Managers. Please go ahead.

Love Sharma — Lombard Odier Investment Managers — Analyst

Hi. Thanks for the call. Just wanted to understand a few things. So from the — given that the margins are likely to remain subdued currently for this quarter and the next quarter, in terms of the deleveraging, given the debt buildup has been quite significant due to the capex and the growth the company has seen over the last few years. Could you share any thoughts around the — how the cash flows could be managed to ensure there is some deleveraging, which you could see going forward?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

If you see the total increase in debt, I tried to give the breakup, the reasons for increasing the debt. Out of INR10,500 crore increase in the debt, INR6,800 crore is only on account of inventory accretion. So this is possible to bring back the cash flow into the business and reduce the debt during the financial year. INR1,400 crores is only on account of the exchange rate translation, then INR1,200 crores against INR3,700 crores of capex we have incurred is an incremental debt, which has come in as a part of this INR10,500 crores. If you take that into account and considering this financial year’s balance, nine months’ performance, we don’t expect the debt to go up. By end of this financial year, it will be lower than what we’re seeing for this quarter.

Love Sharma — Lombard Odier Investment Managers — Analyst

Understood. Okay. Should we expect, it should be stable to FY ’22 number?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

Our effort is not to increase FY ’22. But this is an aberration, which has come in the last quarter. Our effort is to bring down the debt to FY ’22 level.

Love Sharma — Lombard Odier Investment Managers — Analyst

Okay. And can you tell me the acceptances — how much of the acceptances outstanding currently?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

I think I have given the number already, anyhow, $2.7 billion acceptances on revenue account and $13 million on capex.

Love Sharma — Lombard Odier Investment Managers — Analyst

Okay. Understood. Thank you.

Operator

Mr. Sharma, for any follow-up questions, please come back in the queue afresh.

Love Sharma — Lombard Odier Investment Managers — Analyst

Sure. Sure. Thank you.

Operator

Our next question comes from the line of Amit Murarka with Axis Capital. Please go ahead.

Amit Murarka — Axis Capital — Analyst

Yeah. Hi, thanks for the opportunity. So first question is on exports, like my understanding is that there is about 1.5, two months lag in executing the export orders. So is it fair to say that on the export side, whatever you do in Q2 at least this is where the hit will come of lower prices and Q1 has not seen the hit of lower prices on exports?

Jayant Acharya — Deputy Managing Director

The export orders, which have been there carry forward from April, May, I think have all got executed. Whatever orders are now being taken are orders taken in month of June, let’s say for execution in July. So you will see — whatever volumes you will see of exports now will be current order based.

Amit Murarka — Axis Capital — Analyst

Yeah. And also, just on the duties you mentioned that is unviable now to export, which is understandable, but semis are exempt from duties. So like does it now make sense to try to do some semis exposed to the extent you can?

Jayant Acharya — Deputy Managing Director

Yes. We are doing. We are doing some semis export in this quarter; some in the special grades and some of the semi exports to our facility in Italy as well.

Amit Murarka — Axis Capital — Analyst

Right. And what happens with the Duferco order under the long-term contract?

Operator

Mr. Murarka, sorry to interrupt. This is the operator. For any follow-up questions, please join the queue afresh.

Amit Murarka — Axis Capital — Analyst

Okay. Sure. Thanks.

Operator

We move on to our next question. The next question comes from the line of Kamlesh Bagmar with Prabhudas Lilladher Limited. Please go ahead.

Kamlesh Bagmar — Prabhudas Lilladher Pvt. Ltd — Analyst

Yeah. Thanks for the opportunity and good performance, sir, in this quarter. Sir, one question on the part of your one-offs, like how much was the — like export duty NRV provision and FX ratio, more fluctuations in stand-alone and subsidiary [Technical Issues]?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

NRV provision in the stand-alone is INR787 crores and in the consolidated, INR813 crores. Forex fluctuation in the stand-alone account is INR598 crores and the consolidation, it is INR747 crores. Export duty in this stand-alone is INR136 crores and the consolidated, it’s INR242 crores.

Kamlesh Bagmar — Prabhudas Lilladher Pvt. Ltd — Analyst

Okay. Thanks. And second question on the part of steel prices like say, the way the coking coal prices have fallen. So is the government want — does government want any assurances on the card that over a period of time as cost has come down, so the prices or the steel prices should also be at a level significantly lower than the current what they are trading at or rolling at?

Jayant Acharya — Deputy Managing Director

I think the way you have to see is that the steel prices have come down by more than 20% from the levels, which it was, let’s say, beginning April. Number two is that the prices currently of steel prices, which you see, are lower than what it was one year back. So therefore, we are saying that given the fact that the coking coal prices still are higher even after dropping vis-a-vis the last year, we feel that by and large steel prices will remain a range bound. There is not too much scope for prices to further correct.

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

But the steel prices are delist and I don’t think it will be controlled. What Government of India has done, as I mentioned in my opening remarks, is only to contain inflation to offer temporarily the duty. The duty will go away. I don’t think Government will ask the companies how to fix the steel price.

Kamlesh Bagmar — Prabhudas Lilladher Pvt. Ltd — Analyst

Got it, sir. Thanks a lot.

Operator

Thank you. Our next question comes from the line of Anuj Singla with Bank of America. Please go ahead.

Anuj Singla — Bank of America — Analyst

Yeah. Thank you very much for the opportunity, sir. Sir, just one question on the mix between domestic and exports given the export duty. What are we targeting for second quarter and what can we look forward to — in case the export duty is removed in the second half, which you are expecting, what can we see the whole mix for the full year?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

The export proportion, if you see, it varied in our company from 12% to 30% [Phonetic]; that is the range. So, last quarter, it was 20%. So depending upon the pickup in the domestic market, which we expect, it will revive in this quarter, we will be in that range, 12% to 30% [Phonetic]. So we are — we will not able to say today, okay, we will do definitely 20%. It will not go down below 12%.

Anuj Singla — Bank of America — Analyst

Okay. So 12% is a minimum benchmark there?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

Yes.

Anuj Singla — Bank of America — Analyst

Okay. Okay. And the second question, sir, with regards to the maintenance shutdowns, which you have taken at the various facilities, given that second quarter is typically a seasonally weak quarter, do you think reversal of that is quite likely in this quarter or that can extend into the second half as well?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

The JWS has passed the joint venture company. There, it is continuing as on date, but the cost structure is still high. The — in the case of Bhushan Power & Steel, in fact, the expansion to 3.5 million tonne is getting completed in this quarter. Then at Vijayanagar and Dolvi, we will just watch the market and if something can be preponed, part of it we will see if market is going to recover. Otherwise, there is no plan to prepone anything. We would like to continue the production as we had planned.

Anuj Singla — Bank of America — Analyst

Okay. Okay. Thank you very much, sir.

Operator

Thank you. Our next question comes from the line of Abhiram Iyer with Deutsche Bank AG. Please go ahead.

Abhiram Iyer — Deutsche Bank AG — Analyst

Yes, sir. Thank you for taking my questions. My first — the first question that I had was on the revenue acceptances. Sir, this has increased significantly into Q1. Any particular reasons for this? And is this expected to correct because these are treated as sort of debt-like instruments by your rating agencies, right — your external rating agencies.

And the second question, just as a follow-up is, in case, you’re seeing forex sort of blew up, especially considering a significant portion of the debt is in US denominated bonds. Is there any plan for the company to sort of repurchase or buy back some of these bonds in the market?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

As per acceptance increases — increase is concerned is really attributable for increase in coal price. Coal prices, which used to be $100, we bought at $650 per tonne. So therefore, the acceptances have gone up, but now the coal price has got corrected, this will also come down in the next six months’ time. As regards to buying a bond is concerned, we continue to watch the situation and then, take a call on that. As on date, we will work within the RBI guidelines. If you want to buy back the new loan, which we’re raising, it should be lower than what you had earlier reached that is getting retired and the new loan should be — should have a maturity longer than the loan getting retired. So it will be very difficult to compare with these two conditions. Therefore, we have to watch the situation and then take a call.

Abhiram Iyer — Deutsche Bank AG — Analyst

Got it, sir. And just — sorry, just as a follow-up on that revenue acceptances and you mentioned it, this will correct down as you mentioned within the next six months as coking coal goes from $650 to less than $400 that it is right now?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

That’s correct. Today, $230, is not $400.

Abhiram Iyer — Deutsche Bank AG — Analyst

Got it, sir. Thank you very much.

Operator

Thank you. Our next question comes from the line of Ashish Kejriwal with Centrum Broking. Please go ahead.

Ashish Kejriwal — Centrum Broking Limited — Analyst

Yeah. Hi, thanks for the opportunity. Sir, two questions. One is about coking coal average price to be lower by $50 to $60 in Q2. Is it possible to share how much is the spot coking coal price versus quarter one average? How much lower?

Jayant Acharya — Deputy Managing Director

Coking coal, so the quarter one average, as we said, is about $421…

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

CMF.

Jayant Acharya — Deputy Managing Director

CMF India. The spot as Mr. Rao has just told you is today as we speak is $230 for PLV FOB Australia.

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

For $421 and $230, different [Speech Overlap].

Jayant Acharya — Deputy Managing Director

Are not comparable, yeah.

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

Because we continue to buy [Speech Overlap].

Ashish Kejriwal — Centrum Broking Limited — Analyst

Yes, I need the comparable numbers. Is it possible to share?

Jayant Acharya — Deputy Managing Director

Sorry.

Ashish Kejriwal — Centrum Broking Limited — Analyst

The comparable numbers to $421.

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

It is already given. If I say $50 will be reduced, $421 minus $50.

Jayant Acharya — Deputy Managing Director

Yeah. Correct. You take $50 from $421.

Ashish Kejriwal — Centrum Broking Limited — Analyst

No. No. $50 you have talked about for second quarter average because of our [Technical Issues] holding under spot one versus first quarter. How can — how much it can be lower? Can it be lowered by more than $150 or how it is?

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

Just to clarify what we have said just whatever has gone into consumption in the Q1 was $421 pre-index.

Ashish Kejriwal — Centrum Broking Limited — Analyst

Yeah.

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

Whereas in the Q2, we are guiding that this cost will come down by $50, that means $421 minus $50. What are we are buying now or in the next two months, that average cost will come as a consumption in the following quarter. The next time when we have the call, we will tell you that, because it is very difficult for us in the next two months how the coking coal prices will move.

Ashish Kejriwal — Centrum Broking Limited — Analyst

Okay. No issues. The second question is what we have been hearing is that lots of cheap imports from Russia is coming and which is going to arrive at our port in September, which is around INR150 [Phonetic] to INR2,000 per tonne. So considering that our export duty is levied and it’s not profitable to export and cheap Russian imports are coming at much lower than what the current prices, what are our thought process for going forward for our domestic steel prices in September?

Jayant Acharya — Deputy Managing Director

Actually, the way you have to see the Russian cargoes is that there are five cargoes, which were booked in India from Russia. They range from INR60,000, INR61,000 down to maybe INR51,000 what you said, but that’s not the average. The duty also will be applicable on imports of Russian arrivals. So on an average basis, if you were to look at INR55,000 and on top of that duty, you will not be too far from the domestic numbers.

Ashish Kejriwal — Centrum Broking Limited — Analyst

Okay. Fair enough. Thank you for that clarification.

Operator

Thank you. Ladies and gentlemen, that was the last question for today. And now I hand the conference back over to the management for closing comments.

Seshagiri Rao M.V.S. — Joint Managing Director & Group Chief Financial Officer

See what we can say at the end is that in the quarter two, we feel that the domestic demand will recover. Already, we are seeing increase in inquiries from various end-users. So domestic volumes will be robust relative to what we have seen in the Q1. Number two, these input prices are coming down either the coking coal or the iron ore. So that benefit also will come. The third point is whatever guidance we have given of 25 million tonnes of total steel production and 24 million tonnes of total steel on a consolidated basis, notwithstanding a slightly lower sales in the Q1, we will be able to achieve this guidance. So with that, thank you very much.

Ashwin Bajaj — Group Head of Investor Relations

Thanks for joining us. Please feel free to reach us if you have any further questions. Thank you.

Operator

[Operator Closing Remarks]

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