Man Industries (India) Limited (MANINDS) Q4 FY23 Earnings Concall Transcript

Man Industries (India) Limited (NSE:MANINDS) Q4 FY23 Earnings Concall dated May. 19, 2023.

Corporate Participants:

Nikhil Mansukhani — Managing Director

Ramesh Mansukhani — Chairman

Analysts:

Purvangi Jain — Valorem Advisors — Analyst

Niteen Dharmawat — Aurum Capital — Analyst

Ankur Kumar — Alpha Capital — Analyst

Kaushik — VK Investments — Analyst

Bharat — Moneybee Investment Advisors — Analyst

Aman Thadani — Solidarity Investment Managers — Analyst

Ankur Agrawal — RC Wealth Solutions — Analyst

Mukul Jain — Private Investor — Analyst

Manish Gupta — Solidarity Investment Managers — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Q4 FY ’23 Earnings Conference Call of Man Industries Limited. [Operator Instructions]

I now hand the conference over to Mr. Purvangi Jain from Valorem Advisors. Thank you, and over to you, ma’am.

Purvangi Jain — Valorem Advisors — Analyst

Good evening, everyone and a warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Man Industries Limited. On behalf of the company, I would like to thank you all for participating in the company’s earnings conference call for the fourth quarter and financial year ended 2023.

Before we begin, I would like to mention a short cautionary statement. Some of the statements made in today’s con call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management’s beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today’s earnings conference call is purely to educate and bring awareness about the company’s fundamental business and financial quarter under review.

Now I would like to introduce you to the management participating in today’s earnings conference call and give it over to them for their opening remarks. We have with us Mr. Ramesh Mansukhaniji, Chairman, Mr. Nikhil Mansukhaniji, Managing Director; and Mr. Ashok Gupta, Chief Financial Officer, along with Mr. Rahul Rawat, the company’s Secretary.

Without any further delay, I now hand over the call to Mr. Nikhil Mansukhaniji for this opening remarks. Over to you, sir.

Nikhil Mansukhani — Managing Director

Thank you. Thank you, Purvangi. Good evening, everyone, and welcome to the company’s earning conference call for the fourth quarter and financial year ended 2023.

Let me begin by giving you a brief of the consolidated financial performance for the quarter. Our revenue from operations stood at INR598 crores, representing a de-growth of around 2.6% year-on-year, our EBITDA stood at INR41 crores with EBITDA margin reported at 6.86%. Net profit stood at INR26 crores, while PAT margins were 4.37%.

Coming to a consolidated financial performance for the year ended 2023, we reported revenue from operations of INR2,231 crores, which increased by about 4.3% year-on-year. Our EBITDA stood at about INR137 crores with EBITDA margins at 6.15%. We reported a net profit of INR68 crores with a PAT margin of 3.05%. On the operational front, the unexecuted order book as on date stands at around INR2,300 crores to be executed in the next six to eight months. We continue to have outstanding bids for more than INR15,000 crores at various stages of evaluation from several oil/gas water projects in India and abroad, which sets our expectancy for good order book in close. During Q4 ’23, we successfully ventured into the ERW pipes business as planned. We inaugurated our first plant in Anjar Gujarat dedicated to manufacturing ERW API grade line pipes to cater to the hydrocarbon and the CGD sectors. We are witnessing multiple triggers and good inquiries for our projects and are actively participating in the tendering process.

Lastly, to give you a brief on the industry scenario, at present, there are about 17,000 kilometer long natural gas pipeline network, which is operational in the country. In order to make natural gas available across the country, it has been envisaged to develop an additional 15,500 kilometers pipeline to complete the National Gas Grid and same are at various stages of development. City gas distribution network has taken massive strides to offer convenient and affordable fuel from that 66 districts in 2014, the CGD network covers 630 districts in 2023, taking the number of domestic PNG connections from nearly 25.4 lakhs in 2014 to 1 crores currently.

The global onshore oil and gas pipeline market size is estimated to be — estimated to around 4.8 billion million — 4.8 billion in 2023 and it’s forecast to be readjusted to around 5.4 billion by 2028. During the forecast period ’23 to 2028, the global oil and gas market grew from USD6,989 billion [Phonetic] in 2022 to $73.3 billion in 2023 at a compound annual growth of CAGR 4.9%.

With that, I conclude my opening statement, and we can now open the floor for the question-and-answer session.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] First question is from the line of Niteen Dharmawat from Aurum Capital. Please go ahead.

Niteen Dharmawat — Aurum Capital — Analyst

Yeah, thank you for the opportunity. Am I audible?

Nikhil Mansukhani — Managing Director

Yeah, you’re audible.

Niteen Dharmawat — Aurum Capital — Analyst

Yeah. So can you give me the revenue split between public sector and private sector for our last year’s revenue as well as of order book that you are having which we are likely to execute in six to eight months as you mentioned?

Ramesh Mansukhani — Chairman

Yeah, good evening, Mr. Niteen. The exit quantification at this moment is not possible. However, most of the clients are PSU as well as the export and the [Indecipherable] has been not possible. In regards to your second, what is the other position, the order position is roughly INR2,300 crores left out to be produced in next six, seven months to complete it and around INR15,000 crores bid is pending, which we have good hope to materialize in our favor, good quantity to get the — this year growth we’ll be expecting around 50% top line as well as to the great jump will be the bottom line in this current year. For most of the orders, this moment is roughly 80% is export and the 20% roughly is the domestic market.

Niteen Dharmawat — Aurum Capital — Analyst

So this 80% export that you’re talking about is for INR2,300 crores or for that we have potent?

Ramesh Mansukhani — Chairman

We may export further, because we [Technical Issues] 80% would be exports.

Niteen Dharmawat — Aurum Capital — Analyst

No, sorry, your voice was cracking, can you please repeat?

Ramesh Mansukhani — Chairman

Out of the total order book of INR2,300 crores, 80% is exports.

Niteen Dharmawat — Aurum Capital — Analyst

Got it. And the 50% growth that we are talking about in the top line, how much is going to come from export again 80% in the same range or will we have more domestic orders coming in out of that INR15,000 crores bids that we have put in?

Ramesh Mansukhani — Chairman

Current year, our basic [Indecipherable] are on the exports.

Niteen Dharmawat — Aurum Capital — Analyst

Okay. And do we — sorry, go ahead.

Ramesh Mansukhani — Chairman

All the most of the other exports, so this combination will work out the current year, approximately 70% to 80% exports and 25% to 30% will be domestic further composition. This composition may change in future also, but because we had a good bid book position in domestic market, annualized to international market. Those market will be there, mostly the exports during this year.

Operator

Thank you. [Operator Instructions] The next question is from the line of Ankur Kumar from Alpha Capital. Please go ahead.

Ankur Kumar — Alpha Capital — Analyst

Hello, sir, thank you for taking my questions. Sir first question is in the — on this order book INR1,300 crores, is it like evenly distributed like we will be doing close to say INR300 crores per month or it is some one month, maybe very higher, how should we look at this?

Nikhil Mansukhani — Managing Director

[Indecipherable]

Ankur Kumar — Alpha Capital — Analyst

Sorry, I didn’t hear you.

Nikhil Mansukhani — Managing Director

This order book of INR2,300 crores is going to be executed in next six to eight months time. Hello?

Ankur Kumar — Alpha Capital — Analyst

Hello?

Nikhil Mansukhani — Managing Director

Ankur, can you hear us?

Ankur Kumar — Alpha Capital — Analyst

Yes, yes sir.

Nikhil Mansukhani — Managing Director

Yeah, we said this particular order book which is enhanced should be executed in the next six to eight months.

Ankur Kumar — Alpha Capital — Analyst

[Foreign Speech]

Nikhil Mansukhani — Managing Director

[Foreign Speech] but more or less it should be distributed over the next six to eight months.

Ankur Kumar — Alpha Capital — Analyst

So like April, May, we had close to that INR300 crore pipes.

Nikhil Mansukhani — Managing Director

[Foreign Speech] So then the production start and then it goes on average for the next six months, you will get a pretty much consistent output.

Ankur Kumar — Alpha Capital — Analyst

Got it. And sir [Foreign Speech] why has inventory reduced so much in the balance sheet?

Nikhil Mansukhani — Managing Director

See, all the new orders we received in the back end of the financial year. We — our new orders were flowing in the month of March. So by the time — by the time we close our year, we have placed the orders for raw material in the current financial year, so that will be reflected in the current financial year.

Operator

[Operator Instructions] The next question is from the line of Kaushik [Phonetic] from VK Investments. Please go ahead.

Kaushik — VK Investments — Analyst

Hi sir, good evening. I have couple of questions. First is related to the borrowings. I see the reason being shot up in the short-term and the long-term. Could you speak about this? Is it related to [Indecipherable] capex.

Nikhil Mansukhani — Managing Director

No long-term — this long-term capex has happened for our ERW project which has already been commissioned in the month of March of 2023. And short-term borrowings, the basically the working — utilization of working capital limits. As regarding short-term working capital, it is around INR170 crores. We can see the corresponding cash balance available in our books in the form of cash margin given where utilization of annual billing is.

Kaushik — VK Investments — Analyst

Okay. So long-term capital — long-term borrowings, we have taken, right, but we have commissioned. So why we have taken away?

Nikhil Mansukhani — Managing Director

See, this loan has been taken for ERW project. Now the project is now commissioned, once it will be repaid as per the repayment schedule once the project gets start benefiting revenues.

Kaushik — VK Investments — Analyst

Okay, okay. And I see there is a sharp reduction in the trade payables, it is roughly around INR350 odd crores, so —

Nikhil Mansukhani — Managing Director

It’s LNG facility, our receivables has reduced, our inventory has reduced, simultaneously on [Indecipherable] side, our payables also reduced.

Kaushik — VK Investments — Analyst

Okay, okay. But there recently have the order book. We generally see that it should be shot up in payables, right?

Nikhil Mansukhani — Managing Director

Come again.

Kaushik — VK Investments — Analyst

If we have like INR2,300 crores of order book that has to be executed in six to eight months while there has not been short up in the payables then?

Nikhil Mansukhani — Managing Director

See, now the orders has just been received and we have not yet started within the supply. But once the material, we have open the letter of credits and materials are under — in the process of receiving. So you can see the jump — you may see the jump in this first quarter end in the inventory levels.

Operator

Thank you. [Operator Instructions] The next question is from the line of Bharat [Phonetic] from Moneybee Investment Advisors. Please go ahead.

Bharat — Moneybee Investment Advisors — Analyst

Hi, am I audible?

Nikhil Mansukhani — Managing Director

Yeah, yeah.

Bharat — Moneybee Investment Advisors — Analyst

Yeah. So my first question is, this will have some kind of target in terms of gross margin, this will get into some contracts.

Nikhil Mansukhani — Managing Director

These are the export orders and mostly [Indecipherable] orders and the marginal profit because this is some value-added — some value-added products. So our EBITDA will be much better than the last year, which we closed recently. And that order book, good EBDITA softening of the — our raw material which is going to greatly help to the company. So we expected to have a good growth in the top line as well as the bottom line.

Bharat — Moneybee Investment Advisors — Analyst

So sir, what is the EBITDA per ton that do you get as of now? If you could just —

Nikhil Mansukhani — Managing Director

Not per ton, but EBITDA between around roughly should be between 10% to 11% whatever losses while there because of the foreign action with last year. So this year we will get some much better results. The debt is going to invest the bottom-line in the budget view and the budgetary manner.

Bharat — Moneybee Investment Advisors — Analyst

Okay. What is the current capacity utilization in LSAW, HSAW on ERW — ERW would be less, but then in terms of LSAW and HSAW?

Nikhil Mansukhani — Managing Director

So LSAW and HSAW, right now is around 50% to 60%.

Bharat — Moneybee Investment Advisors — Analyst

And LSAW, HSAW both 50%, 60% — 50% to 60%?

Nikhil Mansukhani — Managing Director

Yeah. All put together 50% to 60%.

Bharat — Moneybee Investment Advisors — Analyst

So would be able to cater to the existing order book with this current capacity utilization or would you have to increase the capacity?

Nikhil Mansukhani — Managing Director

We are capable to do more, so we are already bidding for some orders, within existing lines.

Ramesh Mansukhani — Chairman

Capacity utilization of 50%, 60% we are aiming our existing order book to complete by December.

Bharat — Moneybee Investment Advisors — Analyst

Okay, so how much time does it take to ramp up the capacity and at optimum utilization, what is the revenue that you see?

Nikhil Mansukhani — Managing Director

We can go up to between INR4,000 crores to INR4,500 crores at 70%, 75% efficiency.

Ramesh Mansukhani — Chairman

In our industry this 60% to 70% utilization is a very great capacity utilization. Because of the good order book position, we will be much more going to achieve greater achievement as well as more orders, there will be good capacity utilization in this year as well as the coming time.

Bharat — Moneybee Investment Advisors — Analyst

So one more question, the bid pipeline that you said which is INR15,000 crores, so can you just tell me what is the success ratio or the conversion ratio that you see?

Nikhil Mansukhani — Managing Director

It is between, Bharat, so basically the bids we normally tend to get between 15% and 20% conversion.

Bharat — Moneybee Investment Advisors — Analyst

Okay. So INR15,000 crores bid pipeline is through — over two to three years or what is the timeline of these bids?

Nikhil Mansukhani — Managing Director

Basically it’s between next 18 months.

Bharat — Moneybee Investment Advisors — Analyst

Okay.

Nikhil Mansukhani — Managing Director

If everything goes well, a lot of the bids come, but then it get postponed, postponed, postponed, it takes more time, but most of the bids, the genuine and the series bids which get done between 12 to 15 to 16 months maximum.

Bharat — Moneybee Investment Advisors — Analyst

Okay.

Operator

[Operator Instructions] We’ll take the next question from the line of Aman Thadani from Solidarity Investment Managers. Please go ahead. Mr. Thadani, your line is in talk mode, please go ahead with your question. Mr. Thadani, please unmute your line from your side is muted. Mr. Thadani, please unmute your line.

Aman Thadani — Solidarity Investment Managers — Analyst

Hello.

Operator

Yes sir, please go ahead with your question.

Aman Thadani — Solidarity Investment Managers — Analyst

Hello.

Nikhil Mansukhani — Managing Director

Yeah, Aman, we can hear you.

Aman Thadani — Solidarity Investment Managers — Analyst

Sir, thank you for taking my question. Sir, my first question is on Merino Shelters, sir, what is the settlement status with Piramal and what is the total amount that is pending from our end?

Nikhil Mansukhani — Managing Director

Aman, the Merino Shelters has already been settled. Piramal is already been paid and we’ve already released all the charge of the property everything. So it is now free of charge everything belongs 100%.

Aman Thadani — Solidarity Investment Managers — Analyst

Okay. And sir this amount was this paid through Merino’s book or was it paid through Man’s standalone books?

Nikhil Mansukhani — Managing Director

From the management of our own books.

Aman Thadani — Solidarity Investment Managers — Analyst

Okay. And sir my follow-up question is, sir, what do we plan to do with this land?

Nikhil Mansukhani — Managing Director

We are already in talks to sell it and hopefully, we are not going to develop it and we’ve already got bids for selling it. So hopefully very soon we will do an agreement and do an outright sale of the land.

Aman Thadani — Solidarity Investment Managers — Analyst

Okay. Sir, my second question is on the SEBI forensic audit. So in the last con call, you said that we have filed a settlement with SEBI, and they’ll reach out to us in like two, three months. So have they gotten back to us?

Nikhil Mansukhani — Managing Director

No, it’s still pending. We have filed it, it is still pending —

Ramesh Mansukhani — Chairman

See, settlement application is already being filed. We are also waiting for that final outcome of the settlement.

Aman Thadani — Solidarity Investment Managers — Analyst

Okay. And sir my next question is on the performance sir, in the fourth quarter of FY ’23, we saw the other expense increase by 15%. So what were the key line items because of which we saw such a drastic increase in the other expenses?

Nikhil Mansukhani — Managing Director

See, during the quarter, basically, we got some order for this [Indecipherable] orders we have received. And whatever the charges got paid about INR20 crores that got debited to the other expenses.

Aman Thadani — Solidarity Investment Managers — Analyst

Okay. So sir then, how should we look at the EBITDA margins, because the EBITDA at in Q4 were around 7%, so and when we guide for some 10% to 11% EBITDA margin in the saw business. So how should we look at the EBITDA margins going ahead?

Ramesh Mansukhani — Chairman

Mr. Thadani, as I already indicated, last year EBITDA gone down, but because of the foreign exchange one quarter loss you are aware. Now the EBITDA we are anticipating much higher this year, 10% to 11%, because we got some value-added products, other things and all will be done at our campus and the better value addition, better value EBITDA, better top-line and bottom-line. So it is going to improve drastically in next three, four quarters.

Operator

Thank you. [Operator Instructions] We’ll take the next question from the line of Ankur Agrawal from RC Wealth Solutions. Please go ahead.

Ankur Agrawal — RC Wealth Solutions — Analyst

Hello.

Nikhil Mansukhani — Managing Director

Yes, Ankur.

Ankur Agrawal — RC Wealth Solutions — Analyst

Hello. Yeah, am I audible?

Nikhil Mansukhani — Managing Director

Yeah.

Ankur Agrawal — RC Wealth Solutions — Analyst

Sir, what are your projections for next two, three years like how much we sell and profits?

Nikhil Mansukhani — Managing Director

So yes, we are looking at top line between growth of at least 20% to 30%, like our Chairman said this year is exceptionally good. We are doing almost 50% growth, but on a consistent rate, we are looking at a growth of almost 15% to 20% growth for the next five years.

Ankur Agrawal — RC Wealth Solutions — Analyst

And margin will be at 11% — 10% to 11% or so low 6%, 7%?

Ramesh Mansukhani — Chairman

We are targeting 10%, 11% and actual EBITDA margins depends on the when the — we take the orders depends on our — the availability of the manufacturing facility. If we have spare capacity, then we make it now, we may go somewhat on a lower margin, but if the plant is already overloaded with the execution of orders, then we may get more aggressive on the saving front.

Ankur Agrawal — RC Wealth Solutions — Analyst

Raw material down may cause some margin pressure or is still be hedged by unsold [Phonetic] asset?

Ramesh Mansukhani — Chairman

We generally put, yes, cover our raw material requirement 80% requirement that too once we repeat the order, we placed the order for raw material.

Ankur Agrawal — RC Wealth Solutions — Analyst

So, how much the cost of the real estate of Merino Shelters, what you think?

Ramesh Mansukhani — Chairman

INR150 crores to INR170 crores.

Ankur Agrawal — RC Wealth Solutions — Analyst

Okay, thank you. That’s all from my side.

Operator

Thank you. The next question is from the line of Mukul Jain [Phonetic] an individual investor. Please go ahead.

Mukul Jain — Private Investor — Analyst

Hello, sir, just wanted to [Technical Issues] so this —

Operator

Mr. Jain, your audio is breaking. Please check sir.

Mukul Jain — Private Investor — Analyst

Am I audible now? Hello.

Nikhil Mansukhani — Managing Director

Yeah, you are.

Mukul Jain — Private Investor — Analyst

Yeah, sir. I wanted to know about ERW, so already you’re still the plant, so what order you have received yet from the current order, is there any order in which you have received?

Nikhil Mansukhani — Managing Director

Mr. Mukul, we’ve just started the ERW. We are still working on the certifications of API and everything, which takes a little bit of time, it’s already been filed. But we’ve got some small orders of 2,000, 3,000 tons which we are already doing. And I think the certification will come in the next couple of months, then the quantity and the business of ERW will pick up.

Mukul Jain — Private Investor — Analyst

Okay. So expect from Q2 to be completely utilized, what extension you have utilization going forward?

Nikhil Mansukhani — Managing Director

Yeah, Q3 and Q4 should be better and will get more and more stabilized because it has just started, so Q3, Q4, we are not very optimistic, but we are working towards doing the best currently, because it’s a brand new plant. And we will keep you all posted every quarter on how it’s progressing, but we are very hopeful that from next year there are lot of orders in pipeline, so we will be able to get certain portion of the pie for us.

Mukul Jain — Private Investor — Analyst

Okay, sir. And just last question, any guidance on [Technical Issues] because what I believe you have lesser margin —

Operator

Mr. Jain, sorry to interrupt you, the audio is breaking from your line, sir, please repeat your question.

Mukul Jain — Private Investor — Analyst

Sir, can you speak on EBITDA margin from the ERW business?

Nikhil Mansukhani — Managing Director

EBITDA margins will be on the similar levels of 10% to 11% and we are looking at a top line of ERW this year would be between INR200 crores to INR300 crores.

Mukul Jain — Private Investor — Analyst

Okay sir, that’s it from my side. Thank you.

Nikhil Mansukhani — Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Niteen Dharmawat from Aurum Capital. Please go ahead.

Niteen Dharmawat — Aurum Capital — Analyst

Yeah, thank you for taking my question one more time. So sir what is the raw material trend that we see? Is there any pressure on raw material now or has it come down?

Nikhil Mansukhani — Managing Director

It has come down now in the last couple of months, the trend is of steel is, it’s coming down, it’s softening up.

Niteen Dharmawat — Aurum Capital — Analyst

Okay, okay. Got it, sir. Yeah, thank you, and wishing you best.

Nikhil Mansukhani — Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Kaushik from VK Investment. Please go ahead.

Kaushik — VK Investments — Analyst

Yeah, thank you taking my questions. Sir I have question on the ERW business. Could you talk about more the business, because I see there has been fluctuating margin in the ERW pipe. So what kind of plan do we have, can you explain how it will be stable margins 10% to 12% I want to understand more on that?

Nikhil Mansukhani — Managing Director

So, ERW API business normally tends to — the business is on the same lines of the pie. And the margins and the customers are also similar with your GAIL, HPCL, IOCL, BPCL and the CBG clients. The EBITDA margin with I think most of the [Indecipherable] is between 9% to 11%. Yeah, there is another line of business which is other than API, which is the highest grade ever, which is a little bit lesser margin, but more on the turnover basis. But as we’ve installed this as the API line premium 18 meter API lines, so we will be focusing more on this and exports to get better margins.

Kaushik — VK Investments — Analyst

Okay, on the stainless steel side, that we are incurring next year and how much capex, it could be and will we start this — it will be coming in next year or the work has been started on the capex?

Nikhil Mansukhani — Managing Director

On the stainless steel?

Kaushik — VK Investments — Analyst

Yeah, yeah.

Nikhil Mansukhani — Managing Director

At the stainless steel, the investment is around INR550 crores. The work has already started and we should be in operation by December 2024.

Kaushik — VK Investments — Analyst

December 2024, that is the — and the order book, how do we — did we clearly get the orders or it will be like same year that we commissioned then we’ll expect the order book to pile up?

Nikhil Mansukhani — Managing Director

Commissioning is by September/October, so we should be in a position to start getting orders by December 2024.

Kaushik — VK Investments — Analyst

Okay, okay. Okay sir, thank you, all the best.

Operator

Thank you. The next question is from the line of Ankur Kumar from Alpha Capital. Please go ahead.

Ankur Kumar — Alpha Capital — Analyst

Sir, question on the total debt. So what — our total debt is — how much is the total amount right now and what will our peak debt be?

Ramesh Mansukhani — Chairman

See, during the current financial — for FY ’22, ’23, my long-term debt is around INR135 crores, long-term borrowing is INR170 crores. And taking into this implementation of our extended debt is in progress. The peak, long-term debt in the book would be around INR400 crores by ’24-’25.

Ankur Kumar — Alpha Capital — Analyst

Okay. And working capital would increase in similar average?

Ramesh Mansukhani — Chairman

Yes.

Ankur Kumar — Alpha Capital — Analyst

Okay. And sir on margin side, you are saying 10% to 11%, but have we booked raw material and you are also saying that we have booked, we generally book 80% of raw material. So on this INR2,300 crore order book, have we already booked our raw materials that we are confident of this double-digit margins?

Ramesh Mansukhani — Chairman

Yes, 80% — more than 80% of the raw material has already been booked.

Ankur Kumar — Alpha Capital — Analyst

Got it. And sir, on depreciation, what kind of depreciation number we expect in terms of increasing because we are increasing on new capacity?

Nikhil Mansukhani — Managing Director

This year would be around INR60 crores — INR60 crores to INR65 crores and going forward around and after the assets expansion done would be around INR100 crores.

Ankur Kumar — Alpha Capital — Analyst

Okay sir. And our interest rate would be?

Ramesh Mansukhani — Chairman

That is a different company, we should not — don’t get them with mix, please.

Nikhil Mansukhani — Managing Director

In the consolidated depreciation.

Ramesh Mansukhani — Chairman

No, consolidated debt [Indecipherable]

Nikhil Mansukhani — Managing Director

Consolidated depreciation will be ramping. Mr Ankur, what was your question?

Ankur Kumar — Alpha Capital — Analyst

I was asking about the interest rate, which we’ll be paying.

Nikhil Mansukhani — Managing Director

Interest is between 9% to 10%.

Ankur Kumar — Alpha Capital — Analyst

Got it, sir. Thank you.

Operator

Thank you. The next question is from the line of Aman Thadani from Solidarity Investment Managers. Please go ahead.

Aman Thadani — Solidarity Investment Managers — Analyst

Yeah, Aman.

Operator

Mr. Thadani, we are not able to hear you, sir, please unmute your mic if muted. As there is no response from the current participant, we’ll move on to the next question from the line of Bharat from Moneybee Investment Advisors. Please go ahead.

Bharat — Moneybee Investment Advisors — Analyst

Hi, am I audible?

Ramesh Mansukhani — Chairman

Yeah.

Bharat — Moneybee Investment Advisors — Analyst

So this INR2,000 crore order book that we have. So can you just tell me how much it in volume terms?

Ramesh Mansukhani — Chairman

Around 25 million tons.

Bharat — Moneybee Investment Advisors — Analyst

25 million. So my another question is, I guess we import 70% of the raw material, so how much to — I’m sorry if I’m repeating the question.

Ramesh Mansukhani — Chairman

Age?

Bharat — Moneybee Investment Advisors — Analyst

Yeah.

Ramesh Mansukhani — Chairman

As I told you, we generally book still back to back, replacing at least 80% to 90% still we book back on that basis.

Bharat — Moneybee Investment Advisors — Analyst

Okay, okay. Yeah, that’s it from me, sir.

Operator

Thank you. The next question is from the line of Manish Gupta from Solidarity. Please go ahead.

Manish Gupta — Solidarity Investment Managers — Analyst

Thank you for the opportunity. I have five questions. My first question is that in this — in Q3, we had the adverse impact of the FX loss. In Q4 the EBITDA is 6%, while we tend to guide for 10% to 11% steady-state EBITDA. So why would the EBITDA margin in Q4 6% and not close to 10%? That’s the first question.

Nikhil Mansukhani — Managing Director

So Manish, major of the orders done in Q4 were of oil and gas. And also one more thing in Q4, the market trend of the uncovered steel also of the 10%, 15%, the market of steel ran up from January and went through the peak again in March and then it started coming down. So that also had a certain impact on us on the last quarter. So that is the reason — one of the reasons that our EBITDA during the quarter and the overall EBITDA also was down. The EBITDA hit in the quarter was around 1% due to all these things. And the overall hit in EBITDA from last year was around 2%, which we were on track, that 2% was because of our forex loss.

Manish Gupta — Solidarity Investment Managers — Analyst

Sorry, Nikhil, just to follow-up on this one. I’m saying it we had a 1% impact because of the unhedged steel running up and showing the EBITDA have been somewhere in the range of 9%, what explains the difference between 9% and 6%, because my understanding is the FX loss —

Nikhil Mansukhani — Managing Director

No, [Indecipherable] is 7.5%. If you see the EBITDA quarter is 7.5% and we were on track, like we said we had some orders of that particular quarter, we were executing for water as well. So water generally runs into a lower EBITDA. So that is why, but also the impact of the steel certainly running up also impacted around 0.5% to 1%, so that is why we would not get a 9%, 9.5%, which was expected on the quarter. And for the year, like we said the reason for the 2%, 2.5% loss was on the EBITDA was because of our forex loss.

Manish Gupta — Solidarity Investment Managers — Analyst

Okay, great. My second question is that now for this INR2,300 crore order book, a lot of this is export order, are you hedging your — you import steel, but these are export orders. So what’s the decision on — have you decided to hedge the export, how are we preventing the repeat of Q3 because of the FX mismatch?

Nikhil Mansukhani — Managing Director

The repeat of Q3 was because last year we did not have, we had only 10% export orders. So we did not have a natural hedge position compared to this year, we already have 80% of exports. So we have naturally hedged. Whatever the portion of the export, we have already hedged all of it, so that what happened last year will definitely not happening this year again.

Manish Gupta — Solidarity Investment Managers — Analyst

Okay, great. My third question is Nikhil, that you’re saying it’s INR2,300 crore order book, it’s export-oriented, you have a natural hedge. You are saying six to eight months for execution. So, if — I’m just taking a broad number, if we take say about INR2,000 crores execution in the next six months, you’re guiding for about I think roughly you said 50% growth, broadly INR3,200 crores for the year. Do you think we could do — are you therefore saying that we could do almost INR320 crores to INR350 crores EBITDA for the full-year FY ’24?

Nikhil Mansukhani — Managing Director

Yes, so our target is EBITDA of around INR300 crores and we should be exiting the target this year.

Manish Gupta — Solidarity Investment Managers — Analyst

Okay.

Nikhil Mansukhani — Managing Director

With the current order book and the bid which we are — had L1 positions. Our estimation is to hit exactly INR300 crores of EBITDA in this year.

Manish Gupta — Solidarity Investment Managers — Analyst

Okay. My fourth question was on Merino. I think you made a very clear statement on the call that you’re not going to develop the project, you intend to sell it, by when do you target sale in cash in the company?

Nikhil Mansukhani — Managing Director

We’ve already got couple of offers and approximately timeline would be total timeline because anyone who is coming is the payment terms are between three to six months, but I think we will close this transaction in the next three months and the first tranche of payment should be within the next three months as well.

Manish Gupta — Solidarity Investment Managers — Analyst

So by June end, we should get some money in your side?

Nikhil Mansukhani — Managing Director

We are in May, around July.

Manish Gupta — Solidarity Investment Managers — Analyst

Okay, great. My last question, sorry, two more questions. Second last question is I thought I heard you say between 15% to 20% CAGR. Now that’s a very, very aggressive guidance that you are giving. I mean, can you talk a little bit about it in a bit more granularity about what gives you the confidence for such an aggressive guidance, because you know the company is actually not grown for the — for almost a decade now.

Nikhil Mansukhani — Managing Director

Yes, correct. Absolutely. So why that guideline is that because currently we are at around INR2,100 crores. If we are saying that 20% growth into five years, that mean, we should be at INR4,200 crore top line in the next five years. Now why I’m confident in saying that is the reason is that today we are already from the existing lines, we are expecting to touch between INR2,800 crores to INR3,000 crores of top line which we can think we can consistently do that. Other than that, we are expecting between INR700 crores to INR1,000 crore top line from ERW, which is just — it’s at a nascent state of production, but it will kick in from next year. Actually two quarters down the line it will start really moving and then probably next year it will start kicking in more-and more into the top line.

So even if I’m saying INR500 crores top line coming in from ERW suppose next year and then our assets and value-added products, which is pending are connectors and other businesses. So we are very confident that we’ll be able to go to approximately INR4,200 crores. Because our assets, we are assuming December ’24 as the starting of the production full [Indecipherable] and getting orders and that can go up to between INR800 crores to INR1,000 crores of top line as well. So in the next four years, we should be comfortably at a INR4,000 crores to INR2,002 crore top-line, which is from now from the current existing which is finished at 20% CAGR. That’s why.

Manish Gupta — Solidarity Investment Managers — Analyst

So because what can go wrong here because you know the implicit assumption is that we can sell all this capacity.

Nikhil Mansukhani — Managing Director

So, I’ll tell you Manish, the point in this is, we are not assuming any of the production at a 100% even at the ERW like I said, we are only targeting INR200 crores for this year, INR350 crores for next year, whereas it can go up to INR1,000 crores. So we are expecting 30% production as we have — 30% sales of the top line what it can achieve, is because it’s a newer business, we are just getting into it, we will slowly develop the business same goes for our assets. It’s a new line of business, though we have studied it and we’re getting into it, but it will take time. But even keeping that in mind, and like I said, I’m only counting 20%, 30% and 40% ramping up of those new business in the next three years, still my existing business, which is Man Industries is a good business of INR2,500 crores to INR3,000 crores even more on a good year. So keeping that as a constant and keeping the new businesses which are coming in, I do not see any issues in achieving the 20% growth for the company.

Operator

[Operator Instructions] We’ll take the next question from the line of Ankur Agrawal from RC Wealth Solutions. Please go ahead.

Ankur Agrawal — RC Wealth Solutions — Analyst

So the question is this [Foreign Speech]

Ramesh Mansukhani — Chairman

[Foreign Speech] we are going to take it from there only and giving us a conservative number even if you say only 20% growth from here on, we are going to do around 100% growth return in five years is on the conservative line which we can 100% achieve through our — all our other businesses, which we are expanding in.

Ankur Agrawal — RC Wealth Solutions — Analyst

[Foreign Speech] Hello?

Ramesh Mansukhani — Chairman

Dividend is subject. The mode of that we will take the decision.

Ankur Agrawal — RC Wealth Solutions — Analyst

[Foreign Speech]

Ramesh Mansukhani — Chairman

[Foreign Speech] we are saying we are very bullish and you will get some news, let the time come the next board of directors will take the decision about the built in distribution, we are not saying no.

Ankur Agrawal — RC Wealth Solutions — Analyst

[Foreign Speech]

Ramesh Mansukhani — Chairman

[Foreign Speech] but we are in the exploration, you will get some good news, on the expansion, that capex the later programs going on and the dividend also one of the agenda, we will put in the next Board Meeting and let them take the decision then informing.

Ankur Agrawal — RC Wealth Solutions — Analyst

Thank you.

Operator

Thank you. [Operator Instructions] As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Ramesh Mansukhani — Chairman

Yes, thank you all the participating in this earnings call. I hope we were able to answer your question with respect [Technical Issues] Yeah, if you have any further question or would like to know more about the company, indeed reach out either our company Secretary or our Investor Relations Manager Mr at Valorem Advisors. Thank you, Mr. [Indecipherable] Thanks a lot sir for your presentation.

Operator

[Operator Closing Remarks]