Ratnamani Metals & Tubes Limited (NSE:RATNAMANI) Q4 FY23 Earnings Concall dated May. 11, 2023.
Corporate Participants:
Manoj Sanghvi — Business Unit Head
Vimal Katta — Chief Financial Officer
Unidentified Speaker —
Analysts:
Sahil Sanghvi — Monarch Networth Capital — Analyst
Noel Vaz — Union Mutual Fund — Analyst
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
Pujan Shah — Congruence Advisers — Analyst
Kunal Shah — Carnelian Capital — Analyst
Radha Agarwalla — B&K Securities — Analyst
Riya Mehta — Aequitas Capital — Analyst
Dhananjai Bagrodia — ASK Group — Analyst
Vikas Singh — PhillipCapital — Analyst
Pallav Agarwal — Antique Stock Broking Limited — Analyst
Aman Thadani — Solidarity Investment Managers — Analyst
Ashutosh Tiwari — Equirus Securities — Analyst
f Hirenkumar Thakorlal Desai — Private Investor — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4 FY23 Earnings Conference Call of Ratnamani Metals and Tubes Limited, hosted by Monarch Networth 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. [Operator Instructions]. Please note that this conference is being recorded.
I now hand the conference over to Mr. Sahil Sanghvi from Monarch Networth Capital. Thank you and over to you.
Sahil Sanghvi — Monarch Networth Capital — Analyst
Yeah. Thank you Rashi ji. Good evening to all. On behalf of Monarch Networth Capital we welcome you all for the Ratnamani Metal and Tubes’s Earnings Calls, we are delighted to host the management of Ratnamani today and from their side we have, The business — Company’s Steel Business Head and Mr. Manoj Sanghvi, and CFO, Mr. Vimal Katta. So without taking any much time. I will hand over the call to Mr. Manoj Sanghvi, for the opening remarks. Thank you and over to you sir.
Manoj Sanghvi — Business Unit Head
Yeah. Thank you. Thank you, Sahil. Good afternoon to all the participants. I welcome you all to this call and hope everyone is doing good. Our results for Q4 and full year of FY23 have been uploaded on the exchange, and I believe you all had the opportunity to work with the same. If we see on a standalone basis, our company cloaked it’s best-ever performance in FY23, with the top-line and profitability at historic high-end. Both crossing INR4,400 crores and INR4,500[Phonetic] crores respectively. The operating margins were broadly in-line of our guidance provided last year. [Indecipherable] a bit towards the higher side of the valuie to the product mix and similar input prices. As you all know past few months, prices of steel has been broadly stable. resulting in to the insurgence of tall projects leading to good demand across all segments in the previous year. Expansion across sectors [Indecipherable] mainly in refineries. process industry and coal sector, which may augur well for the infrastructure demand and more traction may be expect in-demand of both PS and SS pipes across the globe. However, on a visibility in oil and gas, transmission lines looks muted in India which service water. But the bigger section in the other segments and SS pipes tubes continues to remain quite encouraging.
Now. I would like to straight away touch up on the quarterly financial numbers and the business update in brief, and then we can have questions from your side. Our operating revenue has increased 47% year-on-year. And up by 36% on a sequential basis. Mainly attributable to higher dispatching during the quarter. For the full year, our revenue growth has been 39% with EBITDA of INR793 crores and margin expansion of 130 basis-points. Profitability has been around INR300 crores at opening level for the quarter compared to INR200 crores during the Q3 of FY23. This is mainly because of the product mix, better utilization and operating efficiency. We are projecting the topline of INR5,000 crores plus-minus 5% and the margin is expected to remain in-line as that of current year with the variation of 2%. here and there,
The present macro is no condition for maintaining our long-term growth and margin growth. So, as we begin this financial year, our orders on hand, as on 1st April was roughly INR2,600 crores. Further I would like to brief on a few major developments, we wish to inform that we have successfully commissioned, the [Indecipherable] solar project of 15 MW in the month of March. And we expect the same to result into further reduction of carbon emission which earlier our power cost showcasing our orientation towards ESG and sustainability. Our projects in CSM assets are progressing well, [Indecipherable] delays that happened due to land acquisition and longer weekend [Phonetic] of machineries. During FY23, we have continued with our strategy to investing more per month and improving efficiency with focus on technological and infrastructure. Our [Indecipherable] and judicious capital allocation and CapEx and all investment resulting in very sound balance sheet to the next level. Now regarding our subsidiary, Ravi Technoforge Private Limited. It’s just logged a total revenue of INR245 crores with EBITDA margins of 10.8% and the net profit of INR4.5 crores for FY23. [Indecipherable] has been underway for capacity and process expansion, automation cost reduction, captive renewable power and same is expected to be completed by the end of September-October 2023. We are projecting top-line growth of 15% to 20% with margin expansion of 200 basis-points for FY24.
That’s all from my side at the moment. Now, if there are any questions. I will be happy to answer. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions]. Ladies and gentlemen we will wait for a moment while the question queue assembles. We have our first question from the line of Noel Vaz from Union Mutual Fund. Please go ahead.
Noel Vaz — Union Mutual Fund — Analyst
Hello, good afternoon, everyone.
Operator
Sir, please use your handset.
Noel Vaz — Union Mutual Fund — Analyst
This is a better now.
Operator
Yes, please go-ahead.
Noel Vaz — Union Mutual Fund — Analyst
Yes. So I just — so regarding the fourth quarter, what exactly were the sales for the quarter and is this particular run-rate can — will be sustained annualized for FY24. Yeah, that was the question.
Manoj Sanghvi — Business Unit Head
I could all listen the first part of your question, could you repeat it please.
Noel Vaz — Union Mutual Fund — Analyst
Yes, what are the sales volumes for the fourth quarter and can the number be annualized for FY24? Thank you.
Manoj Sanghvi — Business Unit Head
Yeah, so the total revenue for the first quarter was 14 — approximately INR1450 crores. And yes, we have the capacity to do it but the sustainable over the long-run, quarter-to-quarter basis, it is very difficult since we are in a project-related business. So we might see INR1,500 crores in one quarter, another quarter can be INR1,000 crores, again, it can go to INR1,500 but say a INR1,000 plus crores is what is our target. With one quarter going to the INR1,500 crores – INR1,600 crores.
Vimal Katta — Chief Financial Officer
I like to answer one thing. See total volumes in Q4 were close to 106,000 ton for all our products and as Manoj ji has shared, see in our case, margins are totally dependent on nature of product, product mix. timing, so many factors are there, it is very difficult to say performance in a particular quarter can be extrapolated because we are in direct business order deal on activity. So. we always stay between 16% to 18% is the range at EBITDA level, it seems to be sustainable over a longer period, plus – minus 1% here and there may happen in a particular reporting period. And that should be there going forward also.
Noel Vaz — Union Mutual Fund — Analyst
Okay, yes. All right. Thank you. That is all from.
Operator
Thank you. We have our next question from the line of Pritesh Chheda from Lucky Investment Managers. Please go ahead.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
Sir, can you give the volumes for FY23 and what would be the capacity utilization on this blended capacity utilization?
Vimal Katta — Chief Financial Officer
See, total finished we did close to tender 304,000 ton for both the product during FY23. And on capacity utilization of Manoj Ji, will share. Because see, in our case it for stainless would be singles it would have been optimum. In some instances if you validate, would have been close to 60% – 65%. Near capacity this time [Indecipherable] singles would be closer to 35%. And on Carbon Steel we are doing as in optimum levels, LSAW has been optimum and LSAW process wise older capacity has been optimum and newer capacity will be maybe around 30% -35% sort of thing. [Speech Overlap]
Manoj Sanghvi — Business Unit Head
I will end there, segment to segment it will vary but most of these segments, other then newly added capacity, utilization was between 60% and 80% only stainless steel extrusion and LSAW, both were close to 30% utilization.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
You said that SS seamless is 35 and SS welded is 100.
Vimal Katta — Chief Financial Officer
No. No. I said seamless is optimum, Coal finishing. Okay, Optimum is still close to 80% – 90% sort of thing.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
Variety of the — sorry, go head.
Vimal Katta — Chief Financial Officer
Coal finishing will be around 8,000 – 9,000 ton sort of thing and welded is maybe around 60% – 65% sort of thing. Newer capacity has been roughly maybe around 20% only for hot extrusion.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
SS hot is 20%, only.
Vimal Katta — Chief Financial Officer
Yeah.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
So basically, on a 20,000 ton capacity that you added in FY23,
Vimal Katta — Chief Financial Officer
Yeah.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
The capacity utilization is 30%.
Vimal Katta — Chief Financial Officer
Yes.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
And SS seamless which is your cold is full capacity.
Vimal Katta — Chief Financial Officer
Yes, yes.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
Okay, so basically in the 48,000 tons, we would have SS seamless of 8% SS welded of 20% and SS hot of 20%.
Vimal Katta — Chief Financial Officer
See SS whatever we produced from our seamless, some part has gone for cold finishing also that we use it. So. If you look at the saleable capacity that will be little lower, because whatever captively we are using that will become part of the overall capacity only, it will not be available for sales.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
Okay, is it possible to share in the 304,000 tonnes, how much is exact
Vimal Katta — Chief Financial Officer
See earlier we used to share, but since last few quarters we have taken a conscious call not to share, but then.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
No problem. No problem sir.
Vimal Katta — Chief Financial Officer
Yeah, Yes. Personally we can discuss. Yes, yes.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
No Problem. What is the progress on the capacity expansion that you had planned about INR180 crores in SS and another INR170 crore in carbon steel?
Manoj Sanghvi — Business Unit Head
Yes, so stainless steel expansion of coal finishing [Indecipherable] will be over my December of this calendar year or maximum January of next calendar year. For carbon steel land acquisition and development has already started, and we expect that to happen in first-quarter of next financial year.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
Okay, and my last question is, sir. There is this anti-dumping, which has come on hollow pipe — SS hollow pipe. So how and also SS pipe I think we — the anti-dumping duties have been increased. So how does it benefit also in terms of the capacity utilization, if you could share that? And the industry at large?
Manoj Sanghvi — Business Unit Head
Yes. So anti-dumping on stainless steel seamless pipe has come somewhere in November-December of last year. And since then we we are seeing demand increasing but lot of Asian being imported in India was re exported and there are two, that demand — there the anti-dumping does not play any major role. It is still being imported. But we have some demand increases was in greenfield because of this anti-dumping.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
Okay, and do we have our — are we 100% backward integrated hollow pipe?
Manoj Sanghvi — Business Unit Head
Yes. We have our own mother hollows, but not from high issue finish at the moment.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
Not from?
Manoj Sanghvi — Business Unit Head
Not from dies for melting then cutting and
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
That’s okay, sir. [Speech Overlap]. So you basically must be buying a bar right and you make your own hollow pipe
Manoj Sanghvi — Business Unit Head
Yes.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
A fillet and you must be making your own hollow pipe.
Manoj Sanghvi — Business Unit Head
Yes. Yeah.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
Okay, thank you. I’ll come back in the queue.
Manoj Sanghvi — Business Unit Head
Thanks.
Operator
Thank you. We have our next question from the line of Pujan Shah from Congruence Advisers. Please go ahead.
Pujan Shah — Congruence Advisers — Analyst
Yeah, hi, sir, on a previous con-call, we have seen a hydro demand on that part. So, currently wanted to know that part as well. What are the situation currently, we are facing from the hydro side and how we are looking at the industry trend for that?
Manoj Sanghvi — Business Unit Head
Hydrogen not Hydro.
Pujan Shah — Congruence Advisers — Analyst
Yeah, yeah, Hydro — I’m talking hydrogen — hydro power plants.
Manoj Sanghvi — Business Unit Head
Hydro plants, no major demand. For hydrogen, still very nascent to comment, what kind of pipe will be used and whether stainless, carbon steel — the process, maybe stainless steel for transmission, maybe carbon steel that we will come to know once — going-forward, because a lot of research — for the steel is also going on and in the process, whether it can be welded, seamless, so those research are still going on.
Pujan Shah — Congruence Advisers — Analyst
Okay and sir, our expectation is that we are speaking about INR5,000 crores top-line in next financial year, currently we are at around INR4,500, so and we have grown around 43% for this financial year. So why we are high[Phonetic] — like are we being conservative or we are seeing some subdue demand in any sector-specific?
Manoj Sanghvi — Business Unit Head
So, two reasons. This the kind of grown we had for the last financial year. It’s like one of a kind, because the projects were there, demand were there, capacity came in at the same time, so we could capitalize on that. But yes. In this financial year, we see some drop-in carbon steel line wise demand. So — still because of better utilization of other products, we will be able to maintain 10% growth rate.
Pujan Shah — Congruence Advisers — Analyst
Okay, got it. Thank you so much.
Operator
Thank you. We have our next question from the line of Kunal Shah from Carnelian Capital. Please go ahead.
Kunal Shah — Carnelian Capital — Analyst
Hi. Congratulations in the first-place for fantastic set of number sir. I just wanted to understand the volume growth guideline set in the January to March scenario, right. Also at the same time I’m wanting to to understand, that we talked about [Technical Issues].
Operator
I’m sorry sir, you are not very clear.
Kunal Shah — Carnelian Capital — Analyst
Is it better now.
Manoj Sanghvi — Business Unit Head
No.
Kunal Shah — Carnelian Capital — Analyst
Please remove your handset mode.
Manoj Sanghvi — Business Unit Head
Hanset is echoing.
Kunal Shah — Carnelian Capital — Analyst
Is it better now.
Operator
Can you speak please.
Kunal Shah — Carnelian Capital — Analyst
Yeah, is it better now.
Operator
Sir, are you able to hear him?
Manoj Sanghvi — Business Unit Head
Yeah, there’s a — I can hear him but there is an echo on the sound
Kunal Shah — Carnelian Capital — Analyst
Sir, I just, — I hope, this is better now. Few questions from my side. In the first-place. Congratulations for such fantastic set of numbers. I wanted to get a sense on the volume growth for the next year And also, we did about 106,000 tonnes execution in the current quarter in comparison to about 66,000 – 67,000 tonnes in the previous quarter. So, wanting to understand what led to the superb execution in the current quarter and also if you could help understand volume growth guidance for the next year.
Manoj Sanghvi — Business Unit Head
As commented previously and in my opening remarks, the volume growth, we finished this year at INR4,400 crore — closed to INR4450 crores. Next year our expectation is or what we are budgeted is close to INR5,000 crores. It can be a plus-minus 5%. And to answer your second question there is still — what led to such numbers in the quarter. So the utilization for all the segments and all the products during the last quarter was at it’s optimum. This led to this number. Now if, in case if there is demand and for all the products, all the segments, then yes, this number is achievable and as in my previous call, I’ve already said that we have capacity today to reach a turnover of INR6,000 crores. Got it, got it, got it, got it, got it. And also we have this enabling resolution that we have taken for about INR500 odd crores. So you would want to light, I mean, how should one look at that?
Vimal Katta — Chief Financial Officer
See, basically it is an enabling resolution, so because we are working on our next good plan also, so if required we may go for tying up the — that and in case of that as you know, now regulations require a portion of that has to be raised through bands and Instruments. So it is an enabling resolution. Right now, nothing has been planned as far as capex is concerned but team is working on that. So just — it will save time, nothing else.
Kunal Shah — Carnelian Capital — Analyst
Got it, got it and just wanted to understand on this bearings [Indecipherable] you got about INR104 crores revenues in the current year coming from Ravi, right. So when you say INR5,000 crore, how should one look at the bearings business in this INR5,000 crores.
Vimal Katta — Chief Financial Officer
INR5000 crore is on standalone basis, whatever the INR300 crores, we are targeting for the really is addition. So on consolidated basis, we can have a number of INR5300 crores with plus-minus of 5%.
Kunal Shah — Carnelian Capital — Analyst
Yeah. I’ve got it, got it. Just one last question from say on the general demand scenario, if you will, share how is the water projects going on, the CDG project is going on and you did mention something slowdown [Technical Issues].
Operator
Mr. Kunal shah, is dropped from the queue, sir. We’ll go onto the next question from the line of Radha Agarwalla from B&K Securities. Please go ahead.
Radha Agarwalla — B&K Securities — Analyst
Hi sir. Congratulations on good performance.
Manoj Sanghvi — Business Unit Head
Hi.
Radha Agarwalla — B&K Securities — Analyst
Sir, my first question was that, sir, two years back, we had this seamless stainless steel capacity of 8,000. Now that is 28,000, so at that point of time two years back via hot extrusion the capacity was 6,500. So now that the stainless steel seamless capacity is 28,000, so, what is the hot extrusion capacity?
Manoj Sanghvi — Business Unit Head
8,000 finishing coal finishing capacity and today, the hot extrusion capacity is 20,000 tons for the new press. and old press is 6,000 [Technical Issues]
Unidentified Speaker —
10,000 production,
Manoj Sanghvi — Business Unit Head
10,000 yes.
Vimal Katta — Chief Financial Officer
So hot, extrusion is 30,000 ton and coal finishing is right now close to 10,000 tonne.
Radha Agarwalla — B&K Securities — Analyst
Okay, great. And sir what will it be in the next one or two years?
Manoj Sanghvi — Business Unit Head
See the marginal increase in coal finishing will be there, because we are setting up this facility for higher-value added products which will become operational by year end. But overall capacity in stainless will continue to remain at 30,000 tonnes. Combined together with hot finish and cold finish because whatever we are going to produce through hot finish, part of it is going to be used captively. which will be cold finish. So sellable capacity will be 30,000 tonnes of stainless, 20,000 tonnes of welded. So total 50,000 tonnes of capacity.
Radha Agarwalla — B&K Securities — Analyst
Okay, sir. And, sir, next question is in stainless steel. So Company is planning to do this coiled tubing business, so just wanted to understand for this business. will this be in a separate manufacturing line or in the same line? And also with regards to this, also wanted to understand what is the product about how is the market size and what is the scope of business and competitors in this business?
Manoj Sanghvi — Business Unit Head
I don’t know where you have this information from our coiled tubing, but today it’s still under implementation. And data, we would not like to divulge them.
Radha Agarwalla — B&K Securities — Analyst
Okay, sir. Sir, thirdly. This Ravi Technoforge in FY22, we did a revenue of INR280 crores. Now in the second half of FY23. Revenue is INR104 crores. So if you extrapolate it comes to around. INR200 crores for full year. So is there a de-growth in this business in FY23.
Manoj Sanghvi — Business Unit Head
Yes, FY23, so first seven months, they clocked revenue of INR130 crores, and the last five months our being — acquiring the stake they did a revenue INR105 crores. So this year set a new de-grow one during the first seven months, they had some financial stress, so they could not actually utilize the capacity and converged the demand into orders. And secondly, after because of slowdown in U.K. — because of the war in Europe, there is a little slowdown from European manufacturers making — which led to this de-growth, but going forward we see that the demand has started coming back, and this year we will be able to clock, close to INR300 crores.
Radha Agarwalla — B&K Securities — Analyst
And sir, what about the debt in this business. I think in FY23, we have around INR75 crores of total debt? So how do you see this in coming years?
Manoj Sanghvi — Business Unit Head
Every year, I think there is a repayment of between INR15 crore to INR20 crore, which has happened in last month.
Radha Agarwalla — B&K Securities — Analyst
Okay sir, and sir, lastly this — in LSAW carbon steel, this mobile manufacturing — mobile plant of 60,000 tonnes — around 60,000 tonnes that plant is it fully depreciated?
Manoj Sanghvi — Business Unit Head
Plant, [Indecipherable] I don’t know depreciation fully, no I think there will be something left. It would not be fully depreciated —
Radha Agarwalla — B&K Securities — Analyst
Okay sir, and sir. Lastly, what is the capex guidance for next two years,
Manoj Sanghvi — Business Unit Head
Next two year, we are working on a lot of things at the moment still on the drawing board. So maybe in another six months, we will be able to throw some light on that.
Radha Agarwalla — B&K Securities — Analyst
Okay, sir. Okay. That’s it. Thank you so much.
Manoj Sanghvi — Business Unit Head
Thank you.
Radha Agarwalla — B&K Securities — Analyst
Thank you. We have a next question from the line of Riya Mehta from Aequitas Capital. Please go ahead.
Riya Mehta — Aequitas Capital — Analyst
Hello. Thank you, giving me an opportunity and congratulations for good set of results. My first question would be on based — Hello. Yeah,
Manoj Sanghvi — Business Unit Head
Yes.
Riya Mehta — Aequitas Capital — Analyst
With the order book there is a of both stainless steel and carbon steel. So I would want to know where this is coming from exactly, almost. And which sectors and segments?
Manoj Sanghvi — Business Unit Head
For the last quarter.
Riya Mehta — Aequitas Capital — Analyst
Yes, order book for the last quarter [Indecipherable].
Manoj Sanghvi — Business Unit Head
No can you please repeat your question.
Vimal Katta — Chief Financial Officer
I’ll — I’ll answer. See, mainly the orders are coming from oil and gas sector and process industries for [Indecipherable] and certain orders from power sector also. And plus other between are there. Okay. And in case of Carbon steel, it is a mix of, oil and gas sector and water.
Riya Mehta — Aequitas Capital — Analyst
Okay. And my next question is in regards to margin. So what worked in favor for us this quarter.
Vimal Katta — Chief Financial Officer
See. One thing is, we got the benefit of economies of this scale, because the production dispatches both were higher. Second thing, product mix also, means. higher-value added products volumes were also higher and in Carbon Steel also major orders were related to [Indecipherable] sector where margins are typically better. So everything worked in favor of better margins.
Riya Mehta — Aequitas Capital — Analyst
Okay and actually. I missed out, could you tell me the capacity utilization again, if you don’t mind?
Manoj Sanghvi — Business Unit Head
See [Speech Overlap] go ahead —
Vimal Katta — Chief Financial Officer
Manoj ji, please.
Manoj Sanghvi — Business Unit Head
So. You see most of the segments stainless steel welded, stainless steel seamless, Carbon steel ERW, Spiral, LSAW, the induction bends and coating it is all –. all products the utilization is between 60% to 80% except for two capacity expansion like one hot extrusion for stainless steel seamless ordering in and another capacity expansion in Carbon C1 and LSAW pipe. These two were on 30% utilization, if utilization being the first year of actual commercial production And rest all were between 60% to 80%.
Riya Mehta — Aequitas Capital — Analyst
[Indecipherable] And in terms of the pipeline of orders, what is the kind of pipeline are we seeing for the next year coming forward?
Manoj Sanghvi — Business Unit Head
We started this year INR2,600 crores, we’ve been booking orders for stainless seamless, welded across industries and for carbon steel LSAW pipes, However, some softness in [Indecipherable] building segment and line pipe segment. So — but we are working — [Speech Overlap] The line pipe, spiral line pipe — oil and gas segment, but we are hopeful, we are seeing good demand in water segment. So there of course, we’ll cover-up on-the-water segment.
Riya Mehta — Aequitas Capital — Analyst
Okay. Thank you. That’s it from my side. Thank you so much.
Operator
Thank you. We have our next question from the line of Dhananjai Bagrodia from ASK. Please go ahead.
Dhananjai Bagrodia — ASK Group — Analyst
Hi, sir. I just wanted to understand our increase in margins, maybe I missed this, Is [Indecipherable] margins is because we have some contracts earlier and that’s how we got the benefit of lower inventory and B which end-user industry has seen such strong volume growth that we see that sustainably grow, let’s say, next year and the following year after that?
Manoj Sanghvi — Business Unit Head
Part of it. Yes, maybe correct that you have some orders which are of — the start of last financial year when there was — when the war had started commodity prices was kind of a synergy [Indecipherable] on it but most of it, as you know and as we always say, like most of our orders are on back-to-back basis. So we have — so maybe 10% benefit we would have derived from such — total orders — out of total orders 10%. But not a major part, because of the commodity prices.
Dhananjai Bagrodia — ASK Group — Analyst
So then sir, this [Speech Overlap] margin is sustainable because our GM and pretty much is a sustainable [Speech Overlap].
Manoj Sanghvi — Business Unit Head
[Speech Overlap] margin is between 16% to 18% because see, last year if you see — if I break down the product mix industry-wise more we did for oil and gas, right. Now that is not going to remain same year-on-year. May be this year if I say that oil and gas might go down a little and water is added, so if you water is added the margins might — but still we keep our focus on — to maintain to say between. seem that 16% to 18%.
Dhananjai Bagrodia — ASK Group — Analyst
So, sir, just following-up with your question, what is the difference in margin between oil and gas and auto?
Manoj Sanghvi — Business Unit Head
Normally, oil and gas is a little more value-added than water, maybe 1% or 2% more, but it is totally — it totally depends on-demand and supply.
Dhananjai Bagrodia — ASK Group — Analyst
Okay fine. one sec –which margin, okay, sure. Sure. Thank you.
Operator
Thank you. We have our next question from the line of Vikash Singh from PhillipCapital. Please go ahead.
Vikas Singh — PhillipCapital — Analyst
Good evening, sir, and congratulation on very good set of numbers.
Manoj Sanghvi — Business Unit Head
Thank you.
Vikas Singh — PhillipCapital — Analyst
Sir. I wanted to understand, since we are guiding for almost double of the top-line versus our current order book, but we are at the same time telling that the oil and gas segment demand has been — is a bit slow. So are we expecting incremental demand to come from water segment or exports or — because CS is segment is the one which drives our topline. So just wanted a little bit clarity on the thing?
Manoj Sanghvi — Business Unit Head
Yes, So see — we started the order book at INR2,600 crores. So we are already adding say six months backlog in pipeline to the INR5,000 crores of revenue.. And we are seeing few water projects, specifically, if I talk about Carbon Steel, we are seeing few water projects which we will — in the first or second quarter, which will be dispatched in third and fourth quarter. So, to answer your question, yes. INR2,000 crores is very much possible considering you are already having orders of INR2,600.
Vikas Singh — PhillipCapital — Analyst
[Speech Overlap] So the domestic water segment is what we are — we think that the fraction would be there going forward.
Manoj Sanghvi — Business Unit Head
That is demand for domestic water segment, there is demand for International Water segment also. Few projects we’re under discussion,
Vikas Singh — PhillipCapital — Analyst
Understood sir. Sir, second question pertains to SS segment — the export products basically after many quarters I’ve seen that our export order book in SS has been on higher. So is it a short-term phenomenon you see or do you see that this kind of the trend would be sustainable and a lot of order can be exported from India in SS segment especially?
Manoj Sanghvi — Business Unit Head
Going-forward in stainless steel, yes, this kind of export is sustainable. More-and-more end-customer are accepting our product and once – we’ve been seeing repeated order, we don’t see any until unless, that is anti-dumping or anything, we don’t see any reason for this to go down.
Vimal Katta — Chief Financial Officer
And because basically, traditionally, also we have been getting almost 50% of turnover in stainless steel from physical exports direct. And around 20% from indirect exports. So that way, some of this thing, In stainless steel product, we are already there in a reasonable way in international markets. So and — with the increased capacity our focus, is going to be both on imports substitution, and international market also.
Vikas Singh — PhillipCapital — Analyst
Understood, sir. Sir, just one last question on the capex. So at least, can you tell us the FY24 capex targets with — considering current plants?
Vimal Katta — Chief Financial Officer
Maybe INR100 crores — INR150 cores INR200 cores might be there. But see something for the next growth plan, will also be happening by the time we close the year. So major outlook will not be happening for that. So simply, we can say INR150 crore – INR200 crore likely the range.
Vikas Singh — PhillipCapital — Analyst
Sir, we already had INR350 crore kind of the capex plan, which was announced at the start of the year, [Speech Overlap] additional but out of this..?
Vimal Katta — Chief Financial Officer
But for Orissa project — Orissa project it can take some time.
Vikas Singh — PhillipCapital — Analyst
Okay, so as of now, how much we have spent from that INR180 crores of access cold-rolling facility and this Orissa project, how much we have spent on these individual projects?
Vimal Katta — Chief Financial Officer
In the present scenario, very significant, some amount for lease rent and other things have been paid, We will also we will be asking for rent will be annually- lease rent only will be going, capex will take some time. Some civil activities maybe pending, am I right, Manoj Ji.
Manoj Sanghvi — Business Unit Head
Yes, impact will take some time. Maybe we will see something starting from the second quarter of this year.
Vikas Singh — PhillipCapital — Analyst
So if…
Vimal Katta — Chief Financial Officer
In the standard systems, we might have been spent INR60 crores –. maybe INR80 crores — INR90 crores sort of thing. Major outgoing is — I think once these deliveries of critical plant and machinery will start.
Vikas Singh — PhillipCapital — Analyst
So, this year again minimum we will see our [Indecipherable] cash balances going up, right? Because this money would be getting accumulated our?
Vimal Katta — Chief Financial Officer
Yes, yeah, yeah. And we — as I have shared there are plans to continue this growth beyond FY25 also, so something other than whatever we have planned that may also be planned and we’d like it to start working on that opportunity also.
Vikas Singh — PhillipCapital — Analyst
Sir, what is our net cash balance as of now?
Vimal Katta — Chief Financial Officer
See. Net cash in terms of trading. So as on 31st March we on-net side we were close to INR20 crores plus, today it might be again INR20 crore, IN30 crore plus or minus. Again, total long-term long-term debt will be maybe around INR150 crores for the thing.
Vikas Singh — PhillipCapital — Analyst
Okay and that would be our peak net-debt level INR150 crores
Vimal Katta — Chief Financial Officer
Net-net — yes. Yeah, because there are no short-term borrowings only long-term borrowings roughly INR150 crores are there as on-date.
Vikas Singh — PhillipCapital — Analyst
Okay, thank you sir for answering question and all the best.
Manoj Sanghvi — Business Unit Head
Thank you.
Operator
We have a next question from the line of Pallav Agarwal from Antique Stock Broking. Please go ahead.
Pallav Agarwal — Antique Stock Broking Limited — Analyst
Yeah, good evening, sir. Sir, I’ve a question on our stainless steel manufacturing — the hollow pipe process. So is there some difference between the hot extrusion process, cold drawing or pilger process? Is the process that we follow is superior to the other processes.
Manoj Sanghvi — Business Unit Head
Hot extrusion, pilgering, drawing those are all different processes. Hot extruded material input for the pilger [Technical Issues]. But yes, there is similar process to hot extrusion which is piercing and piercing is normally used for Carbon Steel seamless pipe, whereas China. adopted a technology of using for stainless steel pipe and then the Indian manufacturer is also started. So yes, there is vast different because one is used for carbon steel and another is used for stainless steel. The product mix comes out is also different.
Pallav Agarwal — Antique Stock Broking Limited — Analyst
So sir, there are certain high-end applications where probably that product was not accepted, is that the case.
Manoj Sanghvi — Business Unit Head
If you see – for example, Saudi Aramco specification, they don’t accept PS material. Or if you see for example, Reliances’ specification they don’t accept the PS material. There is a reason, lot of study has gone-in, there are various papers available online also which explains the difference between both. But there are some industry where, criticality is not so much and they are okay to use PS steel.
Pallav Agarwal — Antique Stock Broking Limited — Analyst
Sure sir. Okay. And also just on the question on exports, so what are the proportion of exports in total revenues, I mean, the order book [Speech Overlap] 20%. Total export sales close to 20%. And order book also — current order book of INR2,500 crores [Speech Overlap]
Manoj Sanghvi — Business Unit Head
Order book. I don’t have the breakup of extrusion.
Vimal Katta — Chief Financial Officer
I just share. I just share, just one minute.
Pallav Agarwal — Antique Stock Broking Limited — Analyst
Yes.
Vimal Katta — Chief Financial Officer
See out of this — as on 1st May, we were having close to 550 tonne crores{phonetic] of export orders out of INR2,450 crores of total order book. Okay, sir. Sure. Yeah, thank you sir, that’s just from my end.
Manoj Sanghvi — Business Unit Head
Thank you.
Operator
Thank you. We have our next question from the line of Aman Thadani from Solidarity Investment Managers. Please go ahead.
Aman Thadani — Solidarity Investment Managers — Analyst
Thank you sir for taking my question. Sir my first question is one of our peers have recently entered the ERW space. So I just wanted to understand that what sort of margin does a new rake in this space and the overall opportunity in this space?
Manoj Sanghvi — Business Unit Head
What sort of margins. In this space is difficult to say at the moment. Because see, the last three years, four years. our ERW was running at say almost 90% capacity utilization. But this year, I think that there is — the demand is not as high as it was. So and with a new player coming in, of course, we will take some time for approvals and everything. But margin is again, difficult to say because it varies from 12% to 16% – 18%. Depending on number of projects available in-market. See, what has happened CGD demand has also gone down obviously.
Aman Thadani — Solidarity Investment Managers — Analyst
Okay. And sir, how much time will it take for new organization to ramp-up, how many years does it take?
Manoj Sanghvi — Business Unit Head
For new company to ramp-up. 12 months to 18 months.
Aman Thadani — Solidarity Investment Managers — Analyst
Okay. And sir, second question is certain asset is a key business for our economy. So what is it about this product or this segment that a lot of players have just not got it right?
Manoj Sanghvi — Business Unit Head
Time. Amount of time what we have given, right from ’83 – ’84 and slowly consistently growing that is the only thing I would say which is different.
Aman Thadani — Solidarity Investment Managers — Analyst
Sir. so time in terms of what, is it in terms of the complexity that is there in like to understand the complexity or is it in terms of something that….?
Manoj Sanghvi — Business Unit Head
It is a different mind set is that I would say — it is — it is not like a normal tube pipe business. Carbon steel is totally different if I compare with stainless steel.
Aman Thadani — Solidarity Investment Managers — Analyst
Okay. And sir, even if someone is able to get the product right. We to maybe break for the projects what other criteria that one there would need?
Manoj Sanghvi — Business Unit Head
It’s more around the competition, rather than just so many here. I don’t know what you want to here what you want to understand from the answering.
Aman Thadani — Solidarity Investment Managers — Analyst
Sir, just one genuine question sir. In the past, we have guided for this 15% to 17% long-term margin band. But this quarter we are seeing that going ahead, it would be more of a 16% to 18% range. So what has changed?
Manoj Sanghvi — Business Unit Head
And the product mix, because it has — I’ve told you in the carbon steel demand in oil and gas is subdued. So likely from that INR5,000 crores more will be stainless steel, more will be evaluated production carbon steel. So that’s why it is 16% to 18%, but as you start of the year this is our balance, it can be between 15% to 18% also going forward. If few water projects are booked at a little low-margin it can be 15% to 18% also.
Aman Thadani — Solidarity Investment Managers — Analyst
That’s it from my side, sir. Thank you so much.
Manoj Sanghvi — Business Unit Head
Thank you. Thank you. [Operator Instructions]. We have our next question from the line of Ashutosh Tiwari from Equirus Securities. Please go ahead.
Ashutosh Tiwari — Equirus Securities — Analyst
Yeah. Hi sir, congrats on good numbers. Firstly, this cold finishing capacity will go to what level after this expansion gets completed?
Manoj Sanghvi — Business Unit Head
This new capacity expansion is of 1,200 metric tonnes to start with and it will go up to 1,500 metric tonnes.
Ashutosh Tiwari — Equirus Securities — Analyst
1,500 tonnes. So your capacity go to only 11,500 tonnes.
Manoj Sanghvi — Business Unit Head
Yes. the capacity expansion is small in terms of tonnage, but this is for small diameter tubes. In terms of meters it could [Indecipherable].
Ashutosh Tiwari — Equirus Securities — Analyst
Okay. Got it sir.
Operator
[Speech Overlap] Please, go-ahead.
Ashutosh Tiwari — Equirus Securities — Analyst
Yeah, And secondly. We had obviously talked about development of multiple grades of product with this new seamless hot extrusion capacity, so where are we in that process. In last one year, have you developed major products and that is going to drive the growth in export market going — some color on that, how should we look at export SS business over the next two years — three years?
Manoj Sanghvi — Business Unit Head
Yes, so we actually what we had expected to do in the first year, we could have changed the metals and that 30% utilization with the development of grades which we did not expect, because here itself. So going-forward, yes, the utilization will be better than this year. We are targeting between 50% to 60% utilization.
Ashutosh Tiwari — Equirus Securities — Analyst
50% to 60% utilization level.
Manoj Sanghvi — Business Unit Head
Yeah
Ashutosh Tiwari — Equirus Securities — Analyst
And as such given hot extrusion will be higher-margin business like 20% plus.
Manoj Sanghvi — Business Unit Head
Some grades yes, some grades lower, for blended, if I could — together it will be same close to 15% to 18%.
Ashutosh Tiwari — Equirus Securities — Analyst
Okay, and the SS is also in this, how do you see that?
Manoj Sanghvi — Business Unit Head
Yeah, because, see lower end grade it is more like commodity there will — there in the margins are also not so great, but higher-end range are difficult [Indecipherable] — the margins are good, Blended, we always — because we cannot only do high-end grades result or we cannot do only the near below-end of the product mix. So most blended we see the capacity utilization also and margins also.
Ashutosh Tiwari — Equirus Securities — Analyst
Okay and like we had — we used to highlight earlier on the con-calls, can you highlight, like what kind of bidding that we’ve done to the tonnage and all-in oil and gas, water and all is up now?
Manoj Sanghvi — Business Unit Head
Depends, I haven’t prepared this time maybe in the next call which we plan after six months for the semi-annual results, we’ll have more details on what we are doing?
Ashutosh Tiwari — Equirus Securities — Analyst
Okay, but can you highlight some projects which are, like say, the activity going on right now?
Manoj Sanghvi — Business Unit Head
Oil and gas, if we see right now for middle level what we have is one project of Gas Authority of India Limited. There is [Indecipherable] BNP in Phase 2, there is [Indecipherable] Mangalore Bangalore pipeline for project phase 2. So that is under bidding, then three projects for IOCL are under billing, Few in the east for IGGL which Indradhanush Gas Grid Limited is under bidding. One for Vedanta is under bidding and the one or two projects for SGL[Phonetic. SGL[Phonetic] is a subsidiary of BSUL. There are few projects in oil and gas which are under bidding. For water we have few projects in Gujarat, for Surat Municipal Corporation, for Ahmedabad Urban Development Authority then Avni Yojana. So in Gujarat we have some water projects. And we have water projects in Africa, which we dealing.
Ashutosh Tiwari — Equirus Securities — Analyst
Africas, you said Africa. Sir you said Africa.
Manoj Sanghvi — Business Unit Head
Yeah,
Ashutosh Tiwari — Equirus Securities — Analyst
I think, 2018 – 2019 you had done some in Tanzania, right. is it similar kind of [Technical Issues].
Manoj Sanghvi — Business Unit Head
Yeah, [Technical Issues]
Ashutosh Tiwari — Equirus Securities — Analyst
I’m saying that. I think in 2018 – 2019, we had done some project in Tanzania I guess, [Speech Overlap]
Manoj Sanghvi — Business Unit Head
Now this is for Mozambique or [Indecipherable] I’m exactly not sure what — it is for Africa
Vimal Katta — Chief Financial Officer
Okay, okay. Sir, Actually — I suppose last year also we had exported some quantities to Africa, the carbon steel is purely opportunity driven business in import export. So whenever we get the opportunity our team book the orders also and that [Indecipherable] has happened.
Ashutosh Tiwari — Equirus Securities — Analyst
Okay. And our SS side, how’re are like say — how are the orders or maybe inquiries from chemical, pharma and all, is it also a strong or it is softened basically over the year. Fertilizer was also one.
Manoj Sanghvi — Business Unit Head
So if we see the growth — the driving things in the share. Is stainless steel and some products in carbon steel, which we will have [Indecipherable] actually. But line pipe should remain fattish kind of growth. But yes, stainless steel will grow some products in carbon steel will grow which will help us reach [Indecipherable].
Ashutosh Tiwari — Equirus Securities — Analyst
Okay, so is it coming from this Chemicals and Pharma and all fertilizer or there is new area?
Manoj Sanghvi — Business Unit Head
Yeah, it is coming from various industries pharma. chemical, fertilizers, food and dairy, sugar. automobile. Of course, oil and gas still remains the highest
Ashutosh Tiwari — Equirus Securities — Analyst
Okay, thank you. That’s all from my side.
Manoj Sanghvi — Business Unit Head
Thank you.
Ashutosh Tiwari — Equirus Securities — Analyst
Thank you. We have our next question from the line of f Hirenkumar Thakorlal Desai, an Individual Investor. Please go ahead.
f Hirenkumar Thakorlal Desai — Private Investor — Analyst
Yeah, sir, so. I have two questions. One is on the export side. So as you mentioned this year the visibility seems to be a little bit muted. Do we have a medium-term thinking in terms of increasing the export share so that this little bit of cyclicality can be further mitigated.
Manoj Sanghvi — Business Unit Head
Yes, we have our focus on exports. [Indecipherable] plant has just started. So we are — it is slowly getting approved in various countries where the geography. So our focus is there on exports, but this is a project [Indecipherable] So if there is a project. Yes and definitely then if it is within our reach, reach meaning, there is no anti-dumping in that county or in-country value to be pointed definitely for the project we are there.
f Hirenkumar Thakorlal Desai — Private Investor — Analyst
Sir, do we target some some percentage medium-term or we can’t really say something like that?
Manoj Sanghvi — Business Unit Head
When there is even one projection change the total dynamics made tubers and exports. And then the on [Indecipherable] product project, it is homecarbon steel it is difficult to say, Because it’s not like many projects, you are supplying to and small quantum. It is one project, which is INR500 crores INR600 crores even INR700 crores. So our dynamic on the export percentage changes.
f Hirenkumar Thakorlal Desai — Private Investor — Analyst
Okay. The second question. I think my second question has been answered yeah. That’s all from me. Thank you.
Manoj Sanghvi — Business Unit Head
Okay. Thanks a lot.
Operator
Thank you. We have our next question from the line of Riya Mehta from Aequitas Capital. Please go ahead.
Riya Mehta — Aequitas Capital — Analyst
Hello, thank you for giving me the opportunity for a follow-up question. My question was in regards to since we are seeing that water segment has seen some good traction, apart from water, where do we see the demand coming in from, if we are seeing lower or demand for oil and gas and considering that the realization will also drop for the next year, given the lower commodity prices? Where do we see when confidence for the revenue visibility?
Manoj Sanghvi — Business Unit Head
So, as I answered the previous question. See oil and gas Line-pipe is low, but oil and gas process-wise is still on the higher side. Both for stainless steel and carbon steel. So that any one sector where we see the growth. Then stainless steel utilization of capacities in extrusion and some metal utilization that is from new vendor.
Riya Mehta — Aequitas Capital — Analyst
Okay. Thank you so much.
Operator
Thank you. We have our next question from the line of Pritesh Chheda from Lucky Investment Managers. Please go ahead.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
Sir just two follow-ups. One, what is the utilization that you would expect in expanded hot finish SS, which was at 30%, you mentioned in FY23. This, how much will you scale-up too?.
Manoj Sanghvi — Business Unit Head
50% to 60%.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
50% to 60% And my second question is, sir. On these expansion of SS, which you mentioned will add 1,500 tonnes, via that INR171 crore INR80 crore of capex and it’s a lower diameter what substantial lend. Is it the auto tubes, basically?
Manoj Sanghvi — Business Unit Head
No-no. These are not not auto tubes.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
Then, any reason why, for a 180 crore is just 1,500 tonnes, or if you could tell us what would be the asset turn-on this INR180 crores.
Manoj Sanghvi — Business Unit Head
1:1 or may be a little less.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
So what is this product actually.
Manoj Sanghvi — Business Unit Head
This is very [Indecipherable].
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
Sorry. Stainless steel cold finished 2. And what is the dia side, it is less than half inch or one inch.
Manoj Sanghvi — Business Unit Head
Less than 3 mm.
Vimal Katta — Chief Financial Officer
Yeah, beginning from 3 mm.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
3 mm okay. [Foreign Speech] and it’s not auto tube, right?
Vimal Katta — Chief Financial Officer
No-no, these are usually defense also in nuclear power plant also, number of applications are there.
Pritesh Chheda — Lucky Investment Managers Pvt Ltd. — Analyst
Okay. Done sir. Thank you very much.
Operator
Thank you. We have a next question from the line of Aman Thadani from Solidarity Investment Managers. Please go ahead.
Aman Thadani — Solidarity Investment Managers — Analyst
Sir, I have just one follow-up question. Sir, since you said that the CGD sector is seeing some pressure, so I just wanted — can you throw some more color on it?
Manoj Sanghvi — Business Unit Head
Color meaning?
Aman Thadani — Solidarity Investment Managers — Analyst
Sir, why is it under pressure since the entire sector is at such a nascent stage.
Manoj Sanghvi — Business Unit Head
Yeah, So want happen because of the war in Europe the gas prices escalated quite a bit. So and the government where — CDG was priority sector sector of gas, in-between changed that sector and they were not given APM, APM is a subsidized gas which. government rules allocate to the CDG companies also. Then they have to buy In the spot market so the risk associated was quite high, so they are — they are going slow not that — they are going slow at the moment, will be careful in their investment.
Aman Thadani — Solidarity Investment Managers — Analyst
Yeah, so it’s just a temporary issue, the long-term story stays intact, right?
Manoj Sanghvi — Business Unit Head
Yes, it seems to be a temporary issue.
Aman Thadani — Solidarity Investment Managers — Analyst
Thank you sir.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Sahil Sanghvi for closing comments. Over to you.
Sahil Sanghvi — Monarch Networth Capital — Analyst
Yeah, and just wanted to thank the Management Board patiently answering all the questions. And on behalf of Monarch Networth. I would also like to thank all the participants. Manoj, sir, would you like to give any closing comments.
Manoj Sanghvi — Business Unit Head
Yeah. Thanks to you, Sahil. Thanks to you, Mona and thank you all the participants. And sorry to be not answering some questions. We want to answer. But then, the situation demands, whatever delay — whatever we as a group have decided not to divulge a few information, but it is not that, we want to hide something it is for the better for the competition to catch-up. With this. Thank you, everyone, and. Sorry, one once again.
Operator
[Operator Closing Remarks]