Lloyds Metals And Energy Ltd (NSE: LLOYDSME) Q3 2025 Earnings Call dated Jan. 29, 2025
Corporate Participants:
Rajesh Gupta — Managing Director
Riyaz Shaikh — Chief Financial Officer
Analysts:
Prateek Singh — Analyst
Parthiv Jhonsa — Analyst
Vikash Singh — Analyst
Rahul Agarwal — Analyst
Unidentified Participant
Prince Choudhary — Analyst
Siddharth Gadekar — Analyst
Abhishek Mehra — Analyst
Dhananjai Bagrodia — Analyst
Kartik Khandelwal — Analyst
Presentation:
Operator
Hello, ladies and gentlemen, good day, and welcome to Leloyds Metal and Energy Limited Q3 FY ’25 Earnings Conference Call, hosted by DAM Capital. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Pratik Singh from DAM Capital. Thank you, and over to you, sir.
Prateek Singh — Analyst
Thanks, Manav. Thanks. Good evening, everybody, and thank you for joining us today. We at DAM Capital are pleased to host Middles and Energy’s 3rd-quarter and Nine-Month FY ’25 Results Conference Call. We have with us today from the management, Mr Rajesh Gupta, Managing Director; Mr Sheth, CFO. Without further ado, now I would like to invite Mr Rajesh Gupta to initiate the proceedings for the call. Thanks, and over to you, sir.
Rajesh Gupta — Managing Director
Good evening, everyone, and thanks, Pratik, for taking this call. Thank you all for taking time to join our conference call here. Currently with the investor community and sharing updates on our business is always a great pleasure. I will first give a brief update on our operations and the status of our ongoing projects. After that,, our CFO, will take you through the financials.
Let us begin with our nine months FY ’25 performance overview, which has been quite — and more than satisfactory, I would say. Our spawns iron division recorded highest-ever production during the nine-month period at both the plants and are operating at optimum capacity utilization. In regard to our iron-ore segment, the nine-month dispatches stood at 7.8 million tonnes. And for Q — Q3, it was 2.4 million tonnes. We are fully mobilized to mine and dispatch 25 million tonnes with the expectation that the EC shall be received in time by the end of this current quarter.
Now let me give you some other project updates. Execution has been one of our biggest strengths having demonstrated this with the pipeline which is completed 85 kilometers are awaiting the parent plant and the DRI plant completed last year in around 13, 14 months after the EC. The current ongoing projects are the DRI at and the 4 million ton parent plant, both are nearing completion and should — but component-wise commissioning and testing has started and should be commissioned latest by this quarter-end or maybe early — very, very early next quarter — next quarter.
On our 1.2 million tonne steel plant, the designing at Chandrapur, the designing is complete, the layouts are ready and the orders for the major equipment has been given. The EC has been applied for and the land has been acquired. But for the BSU beneficiation plant, the pilot plant has been ready for the last eight months and has consistently delivered FE content of 66% and beyond and a yield of 37% to 40%. This is beyond our original expectation. Primary engineering is complete and the equipment of procurement is currently in-progress.
The land and other legal formalities required to take it fully forward is underway. In summary, our project execution is progressing smoothly and we remain confident of completing it well in time of our original schedules. I would like to mention specifically that we believe in loyal metal being cost-competitive. This has come as an imperative in the current market scenario. We have implemented several measures to ensure that our cost of seammaking remain under check and our profits stay sustainable in the long-run.
Our investments in the remaining MDA business is a strategic move to this in this direction that will significantly aid us over the years. Once fully consolidated, it is expected to result in meaningful earnings accretion on a consolidated basis.
Now I would like to hand over to Riyas, who will explain the financials in more detail. Over to you,.
Riyaz Shaikh — Chief Financial Officer
Thank you, Rajik. Good evening, everyone. It’s a pleasure to be here today to share our financial and operational performance for nine months FY ’25 and quarter three FY ’25. Despite a dynamic and challenging market environment, we are pleased to report that we have delivered strong growth across key segments, driven by higher volumes in iron-ore and sponge iron. Our ability to navigate market fluctuations, optimize resources and maintain cost-efficiency has helped us achieve a resilient performance this quarter.
Let us delve into the financial performance for nine months FY ’25. Our revenue grew by 11% year-on-year, supported by robust iron-ore and spawn iron volume. What’s particularly encouraging is that our iron-ore segment saw higher sales and improved realization. Spawned iron volumes also remained on an upward trajectory, further strengthening our revenue base. On the EBITDA front, we witnessed a robust 31% year-on-year growth, mirroring our revenue performance. This strong momentum was primarily led by iron-ore and spawn iron. While market conditions for spawn iron continue to be volatile, our operational efficiency and captive raw-material source have provided a strong cushion against price fluctuations.
Now we’ll get into the specifics with segment-wise highlights. Iron-ore. The iron-ore business continued to be a key driver of our overall — overall growth. Realizations per ton improved by 8% year-on-year in-quarter three FY ’25 to INR5,894 and by 10% year-on-year for nine months FY ’25 to INR5718, 5,780. Our EBITDA per tonne for quarter three FY ’25 was INR2,021, marking a 21% year-on-year increase, while for nine months FY ’25, it stood at INR1,860, reflecting the same 21% growth.
Going to DRI and power, in the DRI segment, we recorded 78,000 tonnes in-quarter three FY ’25 and 2,39,000 tonnes in nine months FY ’25. While realizations were muted in-quarter three FY ’25, our captive iron-ore supplies played a crucial role in protecting margins, ensuring stable profitability even in the fluctuation — fluctuating market. In the power segment, volumes remained flat year-on-year and muted power prices in-quarter three FY ’25 had an impact on the EBITDA. However, we continue to optimize efficiencies in this space to counter market challenges. On the capex front, the company has spent INR2,700 crores in the nine months FY ’25 and a total of INR4,400 crores till laid.
Looking ahead, despite some volatility in pricing, our integrated operations and strategic planning have ensured a stable and resilient performance. As we move forward, we will continue to focus on cost efficiencies, value maximization and strengthening our market positioning. Pratik, now we can open the floor for the question-and-answer session.
Questions and Answers:
Operator
Thank you, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use headset only while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assemble. We have our first question from the line of from Anand Rathi. Please go-ahead.
Parthiv Jhonsa
Hi, thank you, sir. Thank you for the opportunity. So I have got actually a couple of questions. Sir, the first question pertains to the mine EC. I believe there was a public hearing which was there yesterday on 28. Is it possible to know the status and what is the progress on it? And by when can we expect the EC to come in? And once the EC comes in, how long it takes for the you know, for the expansion to actually kick-in. That’s my first question
Rajesh Gupta
The public hearing year was held yesterday in under the AGs of the government of Maharashtra, the, etc and it went off well. The usual questions were asked. Some queries were there relating to environment and employment, et-cetera, which were expected and they have been addressed. And now we await the outcome from the district administration, which will go to the center from there, there’ll be a final EC committee, etc., and that will probably take the whole process, I would say within 60 to 70 days. It is a normal process that should take place.
Parthiv Jhonsa
So in 60 to 70 days, you mean the ECE should come in or it is another couple of months after that?
Rajesh Gupta
Yeah, how was his expectation?
Parthiv Jhonsa
Okay. Okay. Thank you, sir. Sir, my second question was that you have done, I think about 7.8 million, 7.9 million ton kind of a sales of iron-ore in the first-nine months, right? So can you give the guidance for remaining part, like it will be — it will be completely 10 million ton, so about 2.2 million ton in 4th-quarter. Is my reading correct?
Rajesh Gupta
Yeah, that’s pretty correct.
Parthiv Jhonsa
Okay. And sir, and one place in the presentation you had mentioned that once the MDO business is the entire structure is completed, there’ll be almost what $400 to $500 — sorry, INR400 to INR500 of cost-savings in the iron-ore side of the business. So can you throw some light on it that when can this come and when can this savings play-out? What is the timeline for the same?
Riyaz Shaikh
And see the NCLT process is going on, the company has to first go on through the NCD for the demerger. So the business, as we have already — as mentioned that the business would be coming in from 1st of April. So this — all these effects would be coming in from 1st of April 2025 post the NCLT order is received. So the entire business — that business comes into this company from 1st April 2025, so it will be for the next financial year.
Parthiv Jhonsa
Okay. So basically my question was will this benefit taken from the day-one itself.
Riyaz Shaikh
Yes. Since it will be under the same number, it was a consolidated figure, so it will be kicking-in as from the immediate basis.
Parthiv Jhonsa
Okay. Okay. Thank you.
Riyaz Shaikh
With the increased EC limits.
Rajesh Gupta
With the effective rate being 1st of April 2025.
Parthiv Jhonsa
Yes. Thank you so much, sir. Thank you.
Operator
Thank you. We have our next question from the line of Vikas Singh from PhillipCapital. Please go-ahead.
Vikash Singh
Good evening, sir, and thank you for the opportunity. Sir, just wanted to understand once the EC is in-place, how long will it take to ramp it up to the previously desired guidance levels of that, 15 million 20 million or even 25 million tonnes. So if you could give us some timeline over there.
Rajesh Gupta
So there are two aspects to the physical execution. One is the physical mining and excavation and one is the evacuation. As far as mining is concerned, we have machinery in-place through the Triveni to do the mining and at peak time we have done 1.8 million tons also in a month. So 2.2 million tons say roughly because the first — in the first one and a half, two years, we would be not going-in for any beneficiation. It will be current process of direct sales zone. So that 2 million tons of excavation and loading onto trucks doesn’t seem very difficult.
Regarding the evacuation, like I mentioned earlier, our pipeline of 10 million tons is in-place. By the time the grinding plant and the plant is ready, the 5 million tons will be transported through that and 20 — and 15 million 20 million tons would be dispatched through the normal route. So we would have therefore a big support of the pipeline in helping us in evacuation. And therefore, we would feel that the there will be not major worries in achieving the evacuation hiders. So the day the EC happens and the other legal formities happen, we hope to be ready with the mining from if not day-one within the first 30 days?
Vikash Singh
Understood. And sir, just one clarification, until the beneficiation project comes in, we can actually go up to 25 million ton in the ore or we will cap our high-grade ore at a certain capacity and that 25 million ton like you previously said is a mix of 15 million ton of low-grade beneficiated and 10 million ton of high-grade. But then mix until that comes, which is 27,
Rajesh Gupta
Yeah, in that year ’28 — FY ’28, the mix would be 10 million tons of DSO and 15 million tons of beneficiary ore. Prior to that step-by-step, we would be achieving 25 total. So in the first year, it will be 25 of DSO directly.
Vikash Singh
Understood. But then my second question comes to that DSO, the results seems to be a pretty limited. So once if we utilize that 15 million and 25 million ton, if I’m not current, we will be left with only with 45 million 50 million tonne of DFO, which is not sufficient more than four to five years of high-grade oil. So just wanted to understand about the — how we should look at the mine life of DSO versus the low-grade going-forward.
Rajesh Gupta
So the results of DSO are 157 million 160 million tons as per the TATA report, which has been certified by. So I don’t know where you have observed the figure of 70 million tons. It’s 157 million tons of DSO and around 700 million tons of BHQ. So by — by the third year, we will go down to 10 million tons of DSO to preserve the ratio for the next 35 years.
Vikash Singh
Understood, sir. And sir, just one last question basically on the this environmental clearance. Once we get the clearance from state, we need only the content to operate, right? There’s not much formality on the state-level.
Rajesh Gupta
Yeah, I believe that’s the only formality that we balance. There are other formities, obviously. Like I mentioned, the public health under the ages of the state. The state has always been very supportive and continues to be supportive. And so all those regular formities will be completed well in time.
Vikash Singh
And sir, just sorry to quick squeeze in one more question. In terms of parity, how does we stand versus Karnataka or the Urissa material and imported material wise? How is the prices are ranging in Maharashtra or rather if Karnataka because recently there ordinance Karnataka government is trying to pass a new mining bill. So in case if Karnataka mining goes a little bit low and we could supply there also since we have a — we are going to have a very large capacity. How does the sits including the logistic cost? Is that opportunity is also available with us?
Rajesh Gupta
So currently, some of our model is already going to Karnataka to various customers and we’ll continue doing so irrespective of the fact of the taxation announced by the Karnataka government. And that taxation is actually a cost, not related to the selling price. So the cost might go up, but the selling price would be ruled by the market. And since we are already competitive in that market currently, we hope to be competitive later also. As such, today, we are supplying our materials in literally all four corners of the country and we continue to hope to be doing so through various logistics mean like rate, truck and now pipeline as well.
Vikash Singh
So on the interested parity, Karnataka versus Mumbai, the would be, if you could give me this that figure
Rajesh Gupta
I could not understand your figure.
Vikash Singh
So basically Karnataka material price versus Mumbai material price ex of logistics to what would be the gap
Rajesh Gupta
So there are some price differentiation between various destination ex the mine, there would be some differentiation and those are commercial information, which I cannot easily pass-on. But let me put it this way that’s why we are doing a door-to-door delivery, which you might have seen in our presentation and many places we are giving X siding, X, our siding where the customer takes care of the transport.
And I mean, it’s a logistic oriented business and that is part of the reason why we tried to have a understanding of equity with Triveni so that all that income also remains in-house. But having said that, parity is — interesting parity changes from time-to-time location to location and product-to-product. Very difficult to define it as a precise figure.
Vikash Singh
Understood, sir. That’s all from my side. Thank you and all the best for future.
Operator
Thank you. We have our next question from the line of Rahul Agarwal from Aventus Capital. Please go-ahead.
Rahul Agarwal
Hello.
Operator
Yes, sir, please go-ahead with your question.
Rahul Agarwal
Yeah. Thanks for the opportunity. So I just had a couple of questions. Sir, I wanted to firstly understand we acquired the MDO business of Treveni but they also dabble in the pellet trading business, which Lloyds is also going to continue going-forward. So I just wanted to understand if there’s any plans to acquire the pellet trading side of it as well or are we just going to stick to the MDO business?
Rajesh Gupta
Has with MDO business. Has — what we have taken over is the MDO business.
Rahul Agarwal
Right, sir.
Rajesh Gupta
The other businesses like they have equity in BRPL and in MRPL. And so that is BRPL remains — does not come to us at all. And we are supplying raw-material and we have an understanding with Mandovi for supplying to them, iron with them and think of taking some pellets from them.
Rahul Agarwal
Okay, sir. So that partnership is going to continue as
Riyaz Shaikh
We are starting off with our own pellet plant. So the question of trading does not allow that.
Rahul Agarwal
So sir, the partnership with isn’t going to-end once that pellet plant starts?
Rajesh Gupta
No, it’s a 10-year agreement.
Rahul Agarwal
Okay, sir. Thank you. And then, sir, I just wanted to ask, so Intra Limited, the new entity that is being owned it to have around INR5,500 crores of revenue in FY ’25. Could you just tell us — could you just aggregate that in terms of what Lloyds will be contributing and what will be coming from all the other mining projects that you will be able to acquire, which has I think and other companies whose mines are also controlled by the
Rajesh Gupta
Current — currently they’re doing around 71 million tonnes of capacity. They are operating 71 million tons, which should be increased to 125 million tons with our increase, the Lloyd Metals see increased. The revenue is from INR55 — it’s around INR5,500 crores. It should increase to around INR8,000 crores in the next — in the next financial year with the increase in the EC, that is so from Lloyd Metals, it should be around INR2,500 odd crores.
Rahul Agarwal
All right, sir. And finally, just one more thing. So sir, we were actually trying to look for the financials of for the financial year ’24, but we were unable to find that. If you could just give me any guidance on how you could go about doing that
Rajesh Gupta
Be available with the ROC sites and if you need it, you can cut in touch with us. We will be able to provide.
Rahul Agarwal
All right, sir, anybody I can contact in particular?
Rajesh Gupta
MR Mr Chintan Mehta.
Rahul Agarwal
Sure, sir. Thanks a lot and all the best.
Rajesh Gupta
Thank you.
Operator
Thank you. We have our next question. A reminder to all participants, you may press star and one to ask questions. The next question is from the line of Devy Agarwal from Family Office. Please go-ahead.
Unidentified Participant
Hi, sir. Thanks for taking my question speak on family office. Sir, sir, my first question is on the — so one of our customers recently signed an MOU with the Maharashtra Government of investing around INR3 lakh crores in district. So I wanted to understand will there be an impact on Lloyd’s Metal of this investment.
Rajesh Gupta
The — if you’re talking about the
Unidentified Participant
Yes, sir.
Rajesh Gupta
So we are not fully private to what the MOU is about. We know that in the past they have signed composite license with the Indian government for one of the mines in. The exact details of what MOU they have signed, we are not aware. Not only one I think other MOEs have also been signed. Viraj has been signed and one more has been signed three or four MOEs are there now three or four ones are in like the Prime Minister and the CMS said that it is the next steel city and we are proud to have laid the foundation to that city.
And with the iron-ore results being very huge, I’m sure that a lot of seed companies will come and the infrastructure overall would be developed in a better way once more companies come in, more taxes and royalties are received by the government, so they would invest more money in the district. So we feel positive about all this.
Unidentified Participant
And just a follow-up on that, do we have better cost structure in those mines?
Rajesh Gupta
I was calling
Unidentified Participant
Those mines. Just a follow-up on that. Do we have better cost structure as compared to those mines which these guys are having?
Rajesh Gupta
We would not be aware of their physical cost structure. But as far as I’m aware that the six mines have been auctioned at — auctioned at a premium of around 110% of the revenue. So that of the average sales price of the state. So if I’m selling at around INR4,000 average, the cost should be around INR4,000 into INR1.1 extra over and above mine, which I do not have to pay.
Unidentified Participant
Right, fair enough. Got it, sir. And secondly, on the gross margin front, sir, our overall sales volume which you see in-quarter three FY ’25 was like slightly higher and the raw-material cost as a percentage of sales was 21% in Q3 FY ’24 versus it is 8% in Q3 FY ’25. So can you throw some light on that? Why is it so low in Q3 FY ’25,
Riyaz Shaikh
In the second-quarter, we had some — there were two, three factors because of which the cost structure was on a higher side because there was more related to our spawn plant that was — as it is this quarter, it has been lower, the production has been lower or there was a physical verification of the stocks, so there was some mismatch in that. So we had to provide for that as well as there was a change in the consumption norms of coal what we have done in this year, we reduced the imported coal there. So that all these things have resulted in this mismatch in the numbers.
Unidentified Participant
Okay. So can we expect similar range going-forward?
Riyaz Shaikh
Yes, yes.
Rajesh Gupta
What, like and I have mentioned earlier, we are always cognizant of the market. Once the market of the spawn and the steel share little softer, we have — instead of focusing on volume alone in the DRI sector, we are focused on cost and by using local coal cost comes down, a little production has come down because of that and that’s the advantage that we are seeing.
Unidentified Participant
Right. Got it. And the next question on the DRI segment. So if you see the sales is very little in this quarter as compared to the last quarter. While the volume is like — volume has fallen by 8%, but the sales, if you see in absolute terms, it’s down by like 48% quarter-on-quarter. So what is the reason for that?
Rajesh Gupta
Okay. In terms of quantity?
Unidentified Participant
No, the volume is down by 8%, but if you see the total DRS sales is down by 48% and you said in the investor presentation, the realization is like
Rajesh Gupta
Last in the last quarter, we have the idea. In the last quarter, there was an industrial promotion subsidy what we received. So that has — that because of that the — if you see that the volumes and the difference in the volume is coming in at around INR70 crore is what we received in as per — in the form of IPS last quarter for the full-year quarter.
Unidentified Participant
Yeah, got it. On the IPS, did we receive anything in this quarter?
Rajesh Gupta
That will continue now. That is — sorry, this was a one-time. The IPs was the onetime for the prior-period. Now we will start — once the pellet plant starts, we will apply and get for the new project. For the new project that is both the DRA and the new pellet plant will start getting after some time. That income is not recognized in this quarter.
Unidentified Participant
Sure. And just last question. Question. Do we — in the last con-call, you said we’ll be selling around 3 million tons of BHQ, but are we plan to sell it in this financial year or will it be in the next financial year?
Riyaz Shaikh
No, we won’t sell 3 million ton of BHQ. Sorry, sorry if that is a message you got. The maximum BHO what we will be doing is 15 million tons of output and that will be in a stepped-up manner, we start with DSO and then we keep on reducing the DSO as well as and when the BHQ — the capacities get added.
Rajesh Gupta
The BHG is not a — BHG is not a tradable product.
Unidentified Participant
Right. Got it. Got it, sir. Thank you and all the best.
Rajesh Gupta
Thank you.
Operator
The next question is from the line of Prince Chaudhary from Pink Wealth. Please go-ahead.
Prince Choudhary
Hello. Hello.
Rajesh Gupta
Yes.
Prince Choudhary
Yeah. Hi, sir. Can you provide me the timeline for the — our benefication plant like when the Phase-1 will be operational then Phase-2 and Phase-3?
Rajesh Gupta
The plant, the — there are — before we come into the physical phases, we have the technical phases and the approval phases. The technical phase of clearing the process route is final and our pilot plant is pilot plant. Sorry, our pilot plant is up and running and we are now in the phase of testing that output, number-one. Number two, the permissions required, including getting the land, etc., are already in-place and I mean already applied for and in-place. And physically, we feel ’27 would be the first phase would be complete in the next 12 months.
Prince Choudhary
So by ’27, only first phase will be operational, right?
Riyaz Shaikh
We’re doing it in three modules, 15 million, 15 million tons per module. So the first module of 15 million tons will be done in May.
Prince Choudhary
Okay. And other two phases,
Riyaz Shaikh
Other two would be in the next year.
Rajesh Gupta
Every year, every financial year-after that.
Prince Choudhary
Okay. And what will be the royalty for that?
Rajesh Gupta
So the royalty currently is less than 55 is not recognized as iron-ore by the country. The royalty for that is around INR65 rupees for Maharashtra and for India therefore for this product, which is what we — worst-case scenario is what we would be paying.
Prince Choudhary
Okay, like INR65 per ton, right,
Rajesh Gupta
INR65 per ton of BHQ.
Prince Choudhary
Okay. And like if we sell it for other like third-party, like if I’m like doing identification of the iron-ore and selling it to third-party, is there any other charges on that or is it only the royalty which we have to pay?
Rajesh Gupta
No. Like I mentioned earlier, there is no buyer for BHQ and we have no plan to sell any BHQ. There are no other costs except the mining cost obviously and the royalty.
Prince Choudhary
Okay. Okay. And the mining cost could be more than the — what we do for the DSO, I don’t if I’m not right then. But it will be the same.
Rajesh Gupta
It will be lesser per ton of BSQ, but when we beneficiate it, we have to use 2.5 times the material, 3 times the material. So from that angle, the ratio to be a little higher. But again,
Prince Choudhary
Yeah, from that concept, only like I have to mind, for example, 2.903 times is required for one ton of DSO. So for that, in percentage terms, our cost would be more right
Rajesh Gupta
If you asked me a question of if I sell BHQ. So for BHQ, the mining cost is lower. For after that beneficiary the BHQ, the iron-ore mining — the mined the finished iron-ore cost would be around 2.5 times of the BHQ mining, which is much lower than iron-ore mining and 2.5 times of the royalty. So that answers your question.
Prince Choudhary
Yes, sir, yes, sir. Understood.
Rajesh Gupta
Assuming around 40% yield.
Prince Choudhary
Okay, sir. Yeah. Thank you. Thank you, sir.
Operator
Thank you. We have our next question from the line of Josna from Anand Rathi. Please go-ahead.
Parthiv Jhonsa
Yeah, hi. Thank you for the opportunity again. Sir, in the opening remarks, you mentioned the capex is it possible to repeat the same for Q3 and nine months?
Riyaz Shaikh
I didn’t get you. Can you just
Parthiv Jhonsa
Yeah, the capex, the capex for Q3 and nine months, sir. Is it possible to get the number?
Riyaz Shaikh
Yeah.
Parthiv Jhonsa
You had said in the opening remarks,
Riyaz Shaikh
Crores, close to INR20. In the nine months, it is INR2,700 crores and we’ve done totally around INR4,400 crores till now.
Parthiv Jhonsa
Okay, okay. Sir, also just one question to harp on the X mine costing compared to, say, someone who is a merchant piler, right, considering we have a lot in-mine and what will be the cost differential there? For example, if someone is mining, considering the MDO cost and everything, what would be the cost differential with us compared to a merchant miner as on?
Rajesh Gupta
I’m not driving to other miners in, a, there are no mining going on right now. I’m not private to the physical costs on the premium cost, I already mentioned that I think it’s in the range of 110%. So that is around INR4,400 higher approximately.
Parthiv Jhonsa
No, I believe so there are no other merchant miners are mine. I just wanted to understand with miners say from Karnataka or Odesa if they are doing on MDO, what would be the cost differential just to get a comparison
Rajesh Gupta
I think I don’t track my competitors so closely. I think the easiest way to track it would be is a pure mining play or maybe Tata, I’ll have to have a look at it. We believe we are quite competitive in the overall mining cost. And with the advent of coming into our fold, it’d be much lower in — because the profit of the MDO would be consolidated in our books as well.
Parthiv Jhonsa
Okay, sir. Sir, and just on the BSQ,
Rajesh Gupta
And one more point is that being newly established in. In only two years compared to NMBC being 20 years and-or 30 years and Steel being 100 years plus, their cost may be different. I would have to ask and I’ll ask my IR people to work-out the costing and give me a better understanding as well. Thank you for.
Parthiv Jhonsa
No problem, sir. No problems. I’ll get-in touch without this. Absolutely right. Sir, the last question is, is it possible to — because the pilot has given some very good yield on BHQ, possible to give a hence-up on what would be the pattern kind of a conversion cost there or it’s too preliminary right now?
Rajesh Gupta
We have the cost with us. We believe that the overall cost ex mine or X beneficial plant would not be very different from the current DSO cost given the lower royalty at INR65. We are trying to understand the laws a little bit more of whether 65 can be reduced or not. And so it will be in the same range, maybe a little bit plus/minus, but the grade is better. The silica alumina is much, much lesser. So the — for the end-users there is a much, much bigger benefit. Whether we make pellets or we sell — make steel or my consumers make steel, it will be much better benefit. The out of that product are around $45 to $50 premium in that for that grade.
Parthiv Jhonsa
Okay. Okay. Thank you so much, sir. Thank you.
Operator
Thank you. We have our next question from the line of Gadikar from Equirus. Please go-ahead.
Siddharth Gadekar
Hi, sir, good evening. So first, just on the EC approval, broadly that we are expected to get the EC approval in the next 60 to 90 days. FY ’26 should look at a — it should be a year where we have the full EC and we should be mining 25 million tons?
Rajesh Gupta
Yes, it.
Siddharth Gadekar
Okay. Sir, secondly, on our DHQ, have we started ordering the equipment or what is the status on that?
Rajesh Gupta
The engineering is all-in full swing. Some of the very long-lead items, I think we have just order or about to order. Our teams have gone to Australia and to China to inspect new — better technologies also. I think we’ll be in the position to order those equipment in the next — I mean the next 10 days or so, we’ll be placing the biggest orders for the — we have got the big grinder in-place, which the pressure, which would be getting installed shortly.
Siddharth Gadekar
So secondly, then broadly, we should be on our original timeline in terms of commissioning the, the first BHQ plant, is that fair understanding?
Rajesh Gupta
We continue to maintain that would be maintained.
Siddharth Gadekar
Okay. Sir, secondly, on the second pipeline when do we expect that to commission
Rajesh Gupta
So we scheduled the way we have done our scheduling, which I mentioned to you earlier, is we are asking the cash flows to take care of that. And so once the two parent plants are ready and the first BHU plant is ready, then we’ll work on the second BHG plant and this pipeline and the pellet plant.
Siddharth Gadekar
Okay, got it. But broad
Rajesh Gupta
Pellet plant in general booking.
Siddharth Gadekar
So broadly by FY ’28 end, we should have two edification plants and at least 8 million ton of telet which would be online, right?
Rajesh Gupta
Yes. And 1.2 million is of steel at?
Siddharth Gadekar
Yes. Okay. Okay, sir. Got it. Thank you.
Operator
Thank you. We have our next question from the line of Abhishek Mehra from DAM Capital Advisors. Please go-ahead.
Abhishek Mehra
Hello, sir, good evening. I just had one question. I just wanted to ask what is the closing iron-ore inventory volume figure as on Q3.
Rajesh Gupta
We’ll come back — we’ll just come back-in a minute for that.
Abhishek Mehra
Okay.
Rajesh Gupta
Any other questions?
Abhishek Mehra
Question okay. Thank you
Riyaz Shaikh
The closing inventory is 0.4 million tons.
Rajesh Gupta
Hello line.
Operator
I think the line got disconnected.
Rajesh Gupta
Yeah. So the answer is 0.4 million tons.
Operator
Thank you, sir. We’ll move on to the next question from the line of Dhanan. Investments. Please go-ahead.
Dhananjai Bagrodia
Hi, sir. Congratulations on a good set of numbers. Just wanted to understand what capex are we looking for this entity over the next three years or so? And how are we looking at this entity on a longer-term basis in terms of business plan or how are we seeing that capex?
Riyaz Shaikh
Can you just repeat?
Dhananjai Bagrodia
So just a question is, how are we looking at CapEx over the next three years on a consolidated level across divisions? And how are we looking at this company over the next three to five years in terms of business plan in terms of how we — because we’ve now got the clearances, we are trying new opportunities. So how should one look at it?
Riyaz Shaikh
Yeah. See, as we’ve informed you, we should be getting into this 25 million tonnes of EC and so we should be doing that much of production in the next financial year. So going-forward, it should be 25 million tonnes of iron-ore. In the next two years as Raji just mentioned, we should be done with 4 million tonne of pellet plant of — and we should be around 7 lakh tons of DRI production and 1.2 million tonnes of a wire rod plant that is a steel plant and an equilitter of 125 megawatts of power along with that.
In terms of capex, we should be doing around INR5,000 crore by this year end, that is, we turn-around INR4,400 crore so we should be reaching around INR5,000 crore by this year and going-forward in the next two years, yes, we should be doing more than that at around INR6,000 crore to INR6,500 crores every year of capex to achieve all these projects of us?
Dhananjai Bagrodia
Okay. And just to understand, is our vision to focus on which part of the chain going ahead? Obviously, the first like what you mentioned, but over longer-term, this company wants to be known as a mining company, processing company. What about that? How are we looking at that?
Rajesh Gupta
So our long-term vision is to be a cyclical free steel industry. Yeah. The same time how we will achieve that in A by very, very low debts, if any, number-one, have part of the algo that we mine would be sold as either algor or part of steel. So around out of 25 meters around 10 million be sold — would be converted into steel and selling around 4.5 million tons of steel and balance will be sold or and around 15 million ton will be sold as pellets or iron, mostly pellets.
Dhananjai Bagrodia
Okay okay, fantastic. Congratulations, sir. And any other fundraise we’re going to do after this or is it just going to be now no more fundraise required?
Rajesh Gupta
Will we — all these plans that we mentioned as for Lloyd Metal, we have yet to sit with management of to understand their capex plans and their requirements and overall things. There would be some reason in the annual for both the company, yes.
Dhananjai Bagrodia
Okay. Fantastic. Thank you, sir.
Operator
Thank you. Thank you. We have our next question from the line of Karthik Khandelwal from HEM Securities. Please go-ahead.
Kartik Khandelwal
Yeah, good evening, sir. Few quarters back-in the conference showcased the desire to achieve a revenue of around INR40,000 crores by ’28 to ’29. So the recent acquisition of MDO business we did and the revenue we’ll be earning from this, is it considered in that target or will it be over and above our desired revenue target of INR45,000 crores by FY ’28 or ’29
Rajesh Gupta
I think your question got lost in the mains here though voice was little echoing. Can you repeat the whole question?
Kartik Khandelwal
Yes. So a few quarters back, we showcased a desire to achieve a revenue of around INR40,000 crores by FY ’28 or ’29. So the recent acquisition of MDO business and the revenue we will be earning from this, is it considered in the target itself or will it be over and above the desired revenue of INR40,000 crores?
Rajesh Gupta
Over and above that,
Kartik Khandelwal
Over and above. Okay. Thank you, sir. That must be helpful.
Operator
Thank you. Thank you. We have our next question from the line of Aman from. Please go-ahead.
Unidentified Participant
Yeah, hi, sir. So any price cuts that we have taken in December and January and how do you see it moving in?
Rajesh Gupta
Price cut. The — we haven’t taken the price cut. Most of our metal is sold for this year of 10 million tons. So we don’t see any price cut on the annual.
Unidentified Participant
And sir, the realization for DRI has come off. Any — what would be the reason for that? And can you explain what’s the linkage with, let’s say, iron-ore realization or in terms of — so what’s the flow-through or linkage with iron or?
Rajesh Gupta
The DRI you’re talking about in January or in the —
Unidentified Participant
For the quarter, sir.
Rajesh Gupta
So our realization has come down for the year — for the quarter, not up.
Unidentified Participant
Yes.
Rajesh Gupta
I think it’s the DRI is more linked to the secondary steel market and the scrap market, lesser to the iron-ore market and also as far as the raw-material concerned for two raw materials, iron-ore and coal. So both of those are part of the equation that people have. And ultimately supply-and-demand and we see that has been little soft on the — I won’t say soft on the demand-side. I think oversupply is there. The demand is still 7%, 8%, 9% growth.
Unidentified Participant
Okay. Yeah.
Operator
Thank you. We have our next question from the line of Kishor uddhasi, an Individual Investor. Please go-ahead.
Unidentified Participant
Hello. Hi, sir. I just wanted to ask how much will be the total mining — iron-ore mining for this financial year
Riyaz Shaikh
We are expecting the EC should be by this
Rajesh Gupta
Mining cost
Riyaz Shaikh
Mining. Total mining is mining or mining cost?
Unidentified Participant
No, no, only mining, iron-ore mining. How much million ton?
Rajesh Gupta
10 million ton.
Unidentified Participant
So it won’t be above that, sir. If we get environmental clearance before March,
Riyaz Shaikh
If we get it before March on a pro-rata basis, we can be — that looks difficult, but yes, we can drive a little bit more than 10 million.
Unidentified Participant
Okay, but right now we are calculating only 10 for this financial year.
Riyaz Shaikh
Yes.
Unidentified Participant
Okay. Okay. Thank you, sir.
Operator
Thank you. We have our next question from the line of Vimuk Shah from Labdi Fintech. Please go-ahead.
Unidentified Participant
Yes, sir. Thank you for the opportunity. So actually I joined a little bit late. So if my question is already answered, then please ignore it, I will read the transcript. So my question is like what is the company’s plan for achieving the 100 megawatt of renewable energies for captive consumption?
Rajesh Gupta
So we have tied-up with two companies Hinduja and. We are about to sign the final contracts with them. We’ll be buying power from them and also becoming the equity holder of 26% in those two special subsidies for that power
Unidentified Participant
Okay and my seconding second question is like, could you provide a detailed projection on how this cost-reduction will translate into the pricing competitiveness in the market and enable this company to maintain its profitability.
Rajesh Gupta
So the landed cost of this power is around 4.5, 475 rupees per unit and the landed cost of MHC retail cost is around 8.5 rupees number-one. Number two and of course, this is green power, so that is also very important for us in our business strategy. So with those two benefits, I think it’s understood. It’s very easy to calculate the cost-benefit to the product.
Unidentified Participant
Okay. Okay. Got it. Thank you.
Operator
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for closing comments. Over to you, sir.
Rajesh Gupta
Thank you, sir. As usual, it has been a very informative and helpful discussion. And these questions always help us to think of our management strategy also going-forward. Thank you everybody for the interest in our company.
Operator
Thank you. On behalf of DAM Capital Advisors, that concludes this conference. Thank you for joining us and you may now disconnect your lines.
Rajesh Gupta
Thank you very much.
Riyaz Shaikh
Thank you.