Rhi Magnesita India Ltd (NSE: RHIM) Q3 2025 Earnings Call dated Feb. 12, 2025
Corporate Participants:
Pramod Sagar — Chairman, Managing Director and Chief Executive Officer
Azim Syed — Chief Financial Officer
Analysts:
Rajesh Majumdar — Analyst
Jinal Sheth — Analyst
Akash Sharma — Analyst
Mayank Bhandari — Analyst
Ravi Purohit — Analyst
Pratim Roy — Analyst
Sahil Rohit Sanghvi — Analyst
Jonas Bhutta — Analyst
Harsh Shah — Analyst
Sanjay Nandi — Analyst
Chetan Doshi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the RHI India Limited Q3 and Nine-Month FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touchstone phone.
I now hand the conference over to Mr Pramod Sagar, Chairman, Managing Director and Chief Executive Officer from RHI India Limited. Thank you, and over to you, sir.
Pramod Sagar — Chairman, Managing Director and Chief Executive Officer
Thank you very much. Good afternoon, everyone, and welcome to RHI Magneceta India’s Q3 and Nine-Month FY ’25 earnings call. Thank you for joining us today. This quarter marks a significant milestone for RHM Ministry India as we crossed INR1,000 crore in quarterly revenue for the first time. This achievement is a testament to our disciplined execution, strong marketing position and continued strategic expansion. We are delighted with our performance, especially it comes amid tough market conditions, volatility in raw-material prices and increased competition from imports as they continue to support challenges. We must also remain cautious cautiously optimistic for the short-term and remain focused on improving operational efficiencies and cost-control to sustain our profitable growth. Next. Before we dive into the details, I would like to briefly touch upon the evolving global and industrial landscape impacting the steel and cement industry at last. Despite a slow start to 2025 due to elections and off-season monsoons, Indian GDP growth is expected at 6%, 7%, driven by infrastructure and industrial expansion.
Cement demand is projected to grow 4%, 5% in financial year ’26. Government planned increase in capex by 10% financial year ’26 on infrastructure spending is expected to boost our demand. India is a net importer of steel, increasing competition for domestic producers. Weaker global demand has led to increased imports of low-cost refractory into India, affecting margins across the industry. Despite this, we have expanded our market-share through investment in pricing. In the cement sector, concerns about cement pricing to the end-customer continue to pose challenges. Profitability should improve with increased demand and operational cost-reduction measures by cement players in the long-term. For RHA Magnesita, these sectors present both challenges and opportunities. As a critical supplier of reflecting to the steel and civil sectors, we are actively addressing raw-material security to advocacy and sourcing diversification.
Our goal of capturing a 40% market-share within the next four years remain on-track, driven by strategic initiatives in addition to investments in-plant modernization and expansion of value-added products. With no additional industry protection in the recent budget, we must remain agile and focus on cost-control and operational efficiencies. Looking-forward, we remain cautiously optimistic about our focus on strategic expansion while maintaining financial discipline, vigilant about market headwinds, including global demand fluctuations and cost pressures, committed to operational efficiency and cost optimization to sustain margins in the coming quarters. Our priorities remain the same. Sustainable growth and better return ratios and our decision-making will be guided by these principles. As we navigate this evolving landscape, we remain committed to safety, innovation, sustainability and steady growth to reinforce our leadership position.
With that, I will now hand over to our Chief Financial Officer, Mr, who will take us through the detailed financial performance of Q3 ’25.
Azim Syed — Chief Financial Officer
Yes,. Thank you for Moji. Let me now walk you through our financial performance for Q3 FY ’25. I’m pleased to report that revenue from operations for Q3 FY ’25 grew 17 percentage quarter-on-quarter, reaching a record INR1,011 crores comparing to INR867 crores in Q2 FY ’25. This strong growth was driven by 20% increase in shipment. We were able to gain momentum in our top-line through reclaiming our market-share, declaring — delivering one-time cement and iron-making projects and resumption of production post customer downtime. Production for Q3 FY ’25 stood at 86 kilotons, maintaining levels consistent with Q2 FY ’25. Capacity utilization remained steady at 67 percentage, ensuring that additional market demand was met through planned inventory releases. We focus on disciplined working capital execution and only produce what we need as per demand. EBITDA for the quarter for us — stood at INR132 crores, reflecting quarter-on-quarter growth of 8 percentage driven by our operational efficiencies.
Despite the margin dilution even with high raw-material cost, our absolute EBITDA growth highlights the strength of our business fundamentals. This was underpinned by our operational efficiencies and expanding market-share. As Pramod ji mentioned, due to increased competition in the cement sector, even with the increased seven percentage of shipments, we saw a dilution in our realization rates. Profit-after-tax increased by 3.5 percentage quarter-on-quarter to INR48 crores. Cost optimization measures are helping mitigate some of the impacts. Our working capital intensity improved to 35 percentage versus last quarter with improvement in DSO, DIO and DPO. With our dividend payment of INR51 crores with ECB loan — loan repayment and with a strong top-line, our net-debt versus EBITDA remains flat.
To summarize, our business fundamentals remain strong. We will continue to strengthen cost controls to manage margin pressure, optimize working capital, maintaining financial discipline, driving profitable growth through strategic market expansion. To reemphasize on what Pramodji said, sustainable growth and better returns ratio will be our guiding principles for our decision-making.
With that, we conclude our financial review and now open the floor for questions from analysts and investors. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question-and-answer session. Anyone who wishes to ask questions may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star hand to participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles to ask questions, please press star and ladies and gentlemen, if you wish to ask a question at this time, please press star and 1 on your touchstone telephone it’s like. The first question is from Rajesh from B&K Securities. Please go-ahead.
Rajesh Majumdar
Yeah. Hi, good afternoon, sir. And congratulations on a decent set of numbers in a difficult quarter, I understand. So I had some questions on the pricing and the margins. So if you see your realizations have been falling constantly in the last two quarters and we’ve seen an increase in the price of raw materials like chromide sand and alumina. So have we got a price increase finally on these products? That was the first question.
Pramod Sagar
Thank you for your question and thanks for your compliment. Yes, the situation, as you rightly said, is very volatile, very challenging atmosphere. As a matter of fact, we have not been able to get price increases from most of the customers. And I am sorry to say that even our peers, our competition, nobody is seriously pushing for price increases. I don’t know why. So we are leading from the front because we are the leader in the market. So we are reaching out to our customers wholeheartedly to get price increases. But every time we are getting the answer, nobody else is asking about price increase. So this put us in a spot, but we will keep on pushing for price increases and I hope we will get some success as well.
Rajesh Majumdar
So as of now, even on alumina refractory, there is no price increase in the 4th-quarter.
Pramod Sagar
As of now, no.
Rajesh Majumdar
But raw-material prices have fallen. So I was asking a question on alumina or any other RM. Do we have inventories because alumina went to $800 and now it’s $500. So how do we look at the price change in alumina reflecting our margins going-forward?
Pramod Sagar
Rajesh ji, you are talking about freed Alvina, okay. So based on that aluminum oxide or white alumina or Almina, that has reached to $1,050 and now it has come back to about $800. But the offer we are getting now, we are already having a high-value inventory about 2.5 to 3 months coverage. And now if then we will place order, it will probably take three, 3.5 months-to reach the material placing order then they will take their manufacturing time see freight, et etc., etc. So there is always a lag of about three, 3.5 months before actually the low-cost or high-cost material start impacting you adversely.
Rajesh Majumdar
So right. And so in terms of margins, sir, we are 12%, 13%, whatever and your long-term is 15%. So will we see it in what next year that margin coming back or it will take more time than that?
Pramod Sagar
Yeah, I said in the morning also with my interaction with PNBC that second-quarter onwards, FY ’26, we should go back to the market guideline which we keep on telling about 15% market prior margins from 2Q onwards, okay.
Rajesh Majumdar
But in the meantime, if you’re able to get a price increase, then probably we will see it faster, right?
Pramod Sagar
Yeah, definitely, there will be upside.
Rajesh Majumdar
Yeah. And sir, on the volumes and my question is on the volume, we are a huge bump-up this quarter. So how should we read into the volume? Is there any onetime in it or what is the stable run-rate like annual run-rate of volume we should take-in shipments for the company?
Pramod Sagar
And I think the thing is this normally December quarter is the strongest quarter for everyone, okay. And the first-quarter of current calendar year, which is now Jan, Feb, March is a bit lean period, why I’m saying so because cement is the leanest for this time, okay? There is no maintenance, no kill and repair, etc., happens in Jan-Feb. They start after 15th of March. So this will have a short-term impact, but it average out in a year. So I would not say we will be able to repeat this INR1,011 crores in this quarter, but it will not be far away also. We will be decently placed.
Rajesh Majumdar
And in terms of margins for this quarter, sir, what we have seen that there is some recovery in 3Q, so you were saying that RM prices will be almost similar. So there won’t be any margin recovery this quarter also.
Pramod Sagar
Yeah, you are right. I think so.
Rajesh Majumdar
And sir, last question, if I can. Interest cost has also gone up a little bit. What is the outlook on that?
Azim Syed
So I can take this. So the interest cost is higher purely because of our hedging on the ECB loans, okay. So this is one of the reasons. This is an ECB term-loan that we have. So this of course we have — although we are exposed to the rupee volatility, at the moment, you know we are hedging with the best financial instruments that we can have. But you can imagine, it’s a three-month hedge normally that we take. And when you look in September versus December, I think we all know-how the rupee had depreciated quite heavily. So yes, we’ll continue to hedge at least to minimize the damage.
Rajesh Majumdar
Okay, but you don’t see this worsening further in terms of the hedging losses.
Azim Syed
No, no, no, I don’t think so, I don’t think so.
Rajesh Majumdar
Yeah. Thank you. Thank you. One data — sorry, sorry, sir, one more question. Plant-wise utilization data you normally give. Can we have the data?
Azim Syed
So normally, as I said, we did 67 percentage total. So that’s what we did. Let’s say, RHIM standalone we did — we were at 72 percentage. DOCL, we were at 63 percentage or the Dalmia IR entity.
Rajesh Majumdar
And what is the utilization at high-tech?
Azim Syed
The high-tech was at — it is at 68 percentage here we see a sharp increase as well.
Rajesh Majumdar
Okay. Thank you, sir. Thank you.
Operator
Thank you. Before we take the next question, a reminder to participants that you may press star and one to join the question queue. The next question is from Chinal from Capital Advisors. Please go-ahead.
Jinal Sheth
Good afternoon, sir. Just wanted an outlook in what you hear from our clients in regards to CapEx, whether they are continuing to do that, is there any slowdown there? What is it that you’re hearing and seeing it will be good to get your views?
Pramod Sagar
Yeah. You are talking about our customer fail and, right?
Jinal Sheth
Yes. Yes, yes, yes.
Pramod Sagar
So it is a mix of failings. You know, one of the largest steel manufacturing group their CEO put on record that if government will not put anti-dumping duty, it will be very difficult to compete in the market because Chinese steel is coming at a very, very subsidized rate. So we need to think twice our further capex. Whatever is in the pipeline, we will do that, but we need to look for, you know, spending the money or not looking at a government policy. So I keep my finger crossed. As of now, whatever the Prajaj in pipeline, they will materialized by all the big groups.
Jinal Sheth
And the remaining — I mean, whatever capex, whatever is in the pipeline that continues, but these are just comments coming out. I mean that could be a form of a strategy, right, saying that, okay, look, we want — they are wanting government to consider the anti-dumping and we do.
Pramod Sagar
Yeah, yeah, absolutely.
Jinal Sheth
But okay, so-far so continue. Okay, great. Thank you.
Operator
Thank you. Participants who wish to ask questions, please press star and one. Next question is from Akash Sharma [Phonetic], who is an Individual Investor. Please go-ahead.
Akash Sharma
Yeah. Hi, sir. Thank you for the opportunity. I have a few questions. My first is related to raw-material. I guess our raw-material costs have increased slightly. So like how do we plan to manage these cost pressures? Like are these transferable yes, you know.
Pramod Sagar
As you rightly said, raw-material cost has increased, particularly aluminous raw-material oil and chromite sand, etc. The prices has gone up and now alumina prices also start declining. We are reaching out to our customers to pass this on, but so-far we are not so successful because no one else is asking for seriously for price increases. We keep on pushing and it has impacted the margins and we have to live with this for another quarter or so before we really push this pass-through or the raw-material prices start coming down. So it is, I would say to be very honest, this quarter will remain a very challenging quarter like the previous one.
Akash Sharma
Okay. So is the increase in raw-material cost one of the reasons for decline in our EBITDA margins.
Pramod Sagar
This is one of the reasons. But you see our absolute EBITDA has gone up by 7%, 8% if you talk about in croress, right? Yeah. So our base is bigger. So those percentage-wise it looks like we have one percentage less EBITDA this quarter. But if you see last quarter to this quarter, our absolute money-wise EBITDA has gone up by 7%.
Azim Syed
And if I may add another one reason, what you see is the mix impact because we have the cement seasonality. So there basically we have — normally the cement during the peak season, the realization rate drops.
Pramod Sagar
Yes. And this is an more unfortunate situation. Some of our peers, our friends are putting up additional capacity and selling the bricks at a margin or cost or even in the loss just enter into the market and the market pricing.
Akash Sharma
Okay, sir. So, sir, on the operational side, like how has our repayment of external commercial borrowings have impacted our leverage and interest cost.
Azim Syed
So this is — so it has not impacted. So normally, this is external commercial borrowing that we have done and it’s because it is — it is with different not Indian currency, it’s in euros that we have taken. So this was purely a rupee depreciation that had happened for it. Normally we do hedging. In fact, we have hedged actually. So this kind of we have minimized the impact of it. But let me also tell you, please look at our finance costs on a Nine-Month basis, it has actually improved because these hedges have actually protected us under rupee volatility, not only in the last quarter, but in the previous two quarters. So if you look at like a Nine-Month to nine-month comparison, our percentage of our finance cost has reduced quite considerably.
Akash Sharma
Okay, sir. And sir, on the inventory side, our inventory levels have slightly decreased or improved, I would say. Like are we taking any strategic actions to optimize inventory management given the volatility in raw materials.
Azim Syed
Yes, see, our — we have a very a sophisticated process where we kind of look at our customer demand quite closely and we produce what we need. So for example, we were building up inventory so that we can deliver these cement projects or our iron-making projects that we were supplying to OEM, now we were able to ship it. So yes, the intention is to continue this close monitoring on all the working capital levers, not just on inventory, but definitely yes. We want to have a better disciplined working capital investment where we need it and how we need it.
Akash Sharma
Okay. So sir, lastly, will this number of days level will be consistent from now or will this improve further, like what should we take it as a sustainable level of days?
Azim Syed
What day — sorry, your voice was not audible.
Akash Sharma
Sir, what should we assume as a sustainable days level in terms of inventory, receivables and payables?
Azim Syed
Okay. So our long-term ambition, which G has highlighted was that we need to operate at 30% of working capital intensity on a long-range basis. So this is what we would want to do because India is a very growing market. We need to ensure that we are able to support this growth. So with this in mind, we believe that on a long-range to always be at 30 percentage consistent, will take some time to get there because Alji, I’m sure you know that in the latest budget also, which is the right thing from the government is to protect the MSMEs, they have increased the coverage of the MSME suppliers. So this should put some pressure on payables. Most of our customers are doing quite a bit of a capex investment as Pramod Jee was saying earlier. That means we need to also have an absolute focus on receivables and we will invest on the inventory where we have growth areas where we see this — where our demand is saying that we need to optimize our capacity utilization, we’ll do it like that.
Pramod Sagar
Yeah. So let me add here one thing. We are working on our working capital discipline, but at the same time, we are also working on Ford Pro or TRM contracts. So we will be adding maybe two, three more TRM contract in the coming weeks and months. So that need an inventory. You are managing the steel plant, you are making inventory, you are handling the inventory. So sometime it is a business need to keep the inventory. So we will need to have a right balance — so it is not that it is a supply base only. We are doing this steel per ton of basis contract — long-term contract with steel plants and two, three are on the table. If it happens, then probably inventory reduction will not be that easy because we have to cater to those customers 100%.
Akash Sharma
Okay, sir. Thank you. Thank you very much, sir.
Operator
Thank you. Next question is from Mayank Bhandari from Asian Market Securities. Please go-ahead.
Mayank Bhandari
Thanks for opportunity. Sir. I just want to understand at what price alumina is inventories is valued at in Q2 and alumina price in Q3, Q3?
Pramod Sagar
Yeah. Yeah. So you know about six months back, we were getting this Almina like scissor vina at about $680 CIF, okay. And it went to $1,050 and now what we are getting offer is about $800. So it is still not going back to the normal level, which was six months back. So it will have not that a significant impact on our costing, but it will have a small impact on costing and we seriously need to pass-on this to our customer, which we keep on pushing.
Mayank Bhandari
Okay, okay. So the sequential drop-in the gross margin is solely responsible due to this alumina thing.
Pramod Sagar
It is one of the components, not solely or raw-material?
Mayank Bhandari
Okay. And sir, we have seen capacity addition by Tata Steel and the in last few quarters. So are we indicating our market-share has increased in those two customers?
Pramod Sagar
Yes, it is very evident from our last quarter the shipments and revenue. Yes, sir, as I said earlier many times, when there is a new project, we are the preferred supplier. Out of say 100 tonne, another 70 tonnes definitely will come to us. So whenever there is a new addition, we are going to have advantage. And we got this advantage last quarter.
Mayank Bhandari
Yeah. And sir, just want to understand one more thing in terms of Nine-Month performance, what would be our domestic growth as well as the breakdown between domestic and export nine months?
Pramod Sagar
Export is roughly 9.5%, 10% only and it is very static from last few quarters and in near-future, it will remain like that because of geopolitical situation globally. And Europe is almost at, 25% 30% and lower steel production and it will further go down in coming days. Okay. So your — Ukraine and is still on so hardly any shipment to those countries. So I don’t see it will be 90%, you can say 10% export and 90% domestic base.
Mayank Bhandari
Okay. And roughly, sir, what would be on total refractory management proportion as of nine months for the full-year?
Pramod Sagar
Refractory management, we are roughly 30% to 32% or —
Azim Syed
35% of our revenue can achieve for your modeling purposes YCD number.
Operator
Thank you. The next question is from Ravi Purohit from Securities Investment Management. Please go-ahead. Go-ahead.
Ravi Purohit
Yeah, hi. Thanks for taking my question. Pramodji, hi. I just wanted to have a more strategic long-term question, right? I mean, we’ve been tracking factories and then RHI for more than 10 years now and have been shareholders for a fairly long period of time, shareholders for a fairly long period of time. So somewhere in ’22, when we did all these acquisitions and all, there has been a significant dilution that we had done and there was also a big increase in our overall capital employment net-worth in the business because of the acquisitions, right. Prior to that for the previous 10, 15 years, our ROCs used to be 45%, 40%, 45% pre-tax ROCs and ROEs were like 20% plus, 25% plus.
Now given the current profit numbers, given the current scale and compared to what capital employed we have in our business, when do we reasonably estimate to achieve even 15% ROE return-on-equity, let’s say our net-worth is INR4,000 crores, 15% of that will be around INR600 crores after tax profit. Is there a visibility or is it — should we assume that this M&A activity that we did in ’22 has permanently kind of impaired our ability to generate high ROEs?
Pramod Sagar
You know, and that’s a very important question. Seriously, we are also looking at 15% ROE. Okay. This is our aim as well. But with the product mix came along the acquisition, particularly, cement plants, et-cetera, it will not be easy. But definitely our target is to reach there and we have lot of discussion internally and we are working on many areas to improve ROE, but assume this subjective talk. So our nowadays, I think from last one, one and a half year, if you remember in any talk with you guys, I always ask now about how much cash we are generating, how much — how much is a return ratio on us. So these are the things we are not only looking at EBITDA, but we are looking at these and we are working towards that. And I’m sure we will improve, but it will take time to reach to 15%. But our aim is to reach there along with you.
Azim Syed
And just to add a couple of pointers, our belief in M&A business case has not changed. We believe that it’s still a good deal because you can see this growth in some of our growth initiatives. For example, in iron-making where we are seeing quite a bit of increased revenue that’s coming through. It is giving the product portfolio, it’s giving the reach and also the validation with the customer. Just to kind of put a couple of examples, some of the largest iron-making deliveries that we did in Q3 were with the OEM suppliers. This — normally OEM people, they would like to go for preferred names because they don’t want to have any failures during startup. So this is also kind of validating our product portfolio that we got with some of our acquisitions as well. So yes, we have a path to go there. It will be a — our long-term internal objective for ROIC is still at about 15 percentage. We are already improving the profitability in the acquired entities. We you are able to see this as well. And also the market dynamics, nothing has changed. So I think it will improve over a period of time.
Ravi Purohit
So are we referring to 15% post-tax ROE or pre-tax ROE? I mean, see, in a sense, our competitors, you know, no matter what we say, have actually not diluted their equity for the capex that they wanted to do, which effectively meant it allowed them to continue reporting reasonably good ROEs, whereas we took the M&A route, right? Now the thing is we have a INR4,000 crore net-worth, right, 15% after-tax ROE would mean INR600 crores PAT, which effectively would mean INR50 — INR150 crore PAT per quarter, right? We are a one-third of that today, right? So when you say we have.
Azim Syed
Yes, just to clarify that, and of course, it comes through operational efficiencies and some of it will also come through plant modernization and realizing our top-line business growth as well. And this will come through some of the initiatives that already highlighted. This is coming through the improvement in steel — steel production domestically. So this kind of will kind of help us to kind of at least 7 percentage growth in the absolute revenue terms, hopefully in the future, which is what the steel producers are currently forecasting.
Ravi Purohit
Okay. Thanks a lot and all the best.
Azim Syed
Thank you.
Pramod Sagar
Thank you.
Operator
Thank you. Next question is Mr Pratim Roy from B&K Securities. Please go-ahead.
Pratim Roy
Yeah, hi, sir. Thanks for opportunity again. In the PPT, you have mentioned that there is one-time profitable warranty provision released in 2Q FY ’25. So if you can keep some light on this, what is the thing?
Azim Syed
Yes. So you are referring to the last quarter provision release. Actually, we had reported this other income last quarter. So these were some of the — in the acquired businesses, we had these warranties that we were able to confidently after the period of time of the warranty is completed, we were able to release it quite comfortably. So this is your product amount, warranty that we had provisioned for earlier post-acquisition. This is basically we had to get the good performance of those product at site wherein we need to get the certification from the customer saying that it has achieved its contractual performance as well. This has happened post-acquisition with does that help?
Pratim Roy
So what is your quantum for that?
Azim Syed
Sorry, your voice is not. Can you repeat?
Pratim Roy
So what is the quantum of that particular provision release?
Azim Syed
Yes, yes, this is a one-time release. This is not repeatable.
Pratim Roy
No, no, I’m just asking what will be the number for that means how much?
Azim Syed
That would be around INR12 crores.
Pratim Roy
INR12 crores. Okay, sir. Thank you. And one more question, sir, that last that you just now mentioned that in 3Q, you have delivered the one of the largest iron-making projects. So is there any such project is in our pipeline in the coming days or what will be the — I mean, it will be the onetime or we can expect a frequent discount of projects in the coming days, if you can throw some light on this?
Pramod Sagar
Yeah, this is not one-time, this will keep defeating and only I think mid of Jan, we got an order of 1,200 TPD in DRI, which is the largest and the confidence of customers now is so much on our products after a 1.5 years performance, we got the biggest order of DRI, biggest TPD, 1,200 TPD, the biggest DRI plant in India. We got that order. Also order which we got last year, one is under execution and other will start in April or so. So this will also be happening in this financial year. So and two, three more projects are in the pipeline. We are very positive about our growth story in iron-making pallet and DRI segment.
Pratim Roy
Yes, sir. Okay. And sir, lastly, just if you get some idea that last quarter or in this quarter in 3Q the utilization level of standalone POCL you have mentioned, but just if you compare what is the improvement over 2Q?
Pramod Sagar
Actually, in 2Q, I think the IR plant, plant it was 61%, now it is 63% and iron plant is almost at the same level, I would say 1% here, there, but I don’t have object number right now me.
Pratim Roy
Okay, sir. And high-tech, sir?
Pramod Sagar
We are keep on adding product and it is improving day-by day. I think 58% or so is — how much is the —
Azim Syed
Capacity utilization assumption for we have improved from 56% to 68 percentage quarter-on-quarter.
Pramod Sagar
56% to 68% quarter-on-quarter.
Pratim Roy
Okay. Thank you, sir.
Operator
Thank you so much for the next question is from Sahil Rohit Sanghvi from Monarch Networth Capital. Please go-ahead.
Sahil Rohit Sanghvi
Hello, am I audible?
Pramod Sagar
You are very.
Sahil Rohit Sanghvi
Sir and Azheim, many congratulations. It was really good to see the INR1,000 crore mark and in such a challenging times here. And this has come with a very good mix of product portfolio also. So really good to see that, sir. Sir, would it be possible to give me the contribution from the INDRI pellet side in our total revenues in say 3Q, a percentage or absolute number, anything possible?
Azim Syed
We basically have of iron-making business close to about 12% of our revenues, 12%.
Sahil Rohit Sanghvi
And any sort of comparable number you would have, what was this last year? Was it really present or this was very negligible, right?
Pramod Sagar
No, no, it is a 1.5 times growth from last year. One and a half business was so small, so it doesn’t have a serious impact, but you know, I remember in million euros and start thinking in euro. So it was 29 million last year and now it will be something like INR45 million or so. So it is 1.5 times growth from last year to this year. So this is really, really good.
Sahil Rohit Sanghvi
So, sir, and in this the products, the realization is usually, is it fair to say it is lower than the utilization — the realization of the steel products, products go into steel-making and flow control, is the pricing lower, then.
Pramod Sagar
Yes. It. It is a very competitive market and you know we have to enter this market where the 2%, 3% even a lower-price than the market price for the entry. So we are not doing like our competition, we are doing in cement 20% lower than our price and try to enter. We are just net-to-net 1%, 2% lower than that. And with our brand image, people are giving us order on that. But having said that, the margins are comparatively lower than stay.
Sahil Rohit Sanghvi
Got it. Got it, sir. And now that you have told us that you have a few orders, which will come on-stream in next few quarters. So this 12% of the top-line, what could that number go in next year, say, FY ’26 or what is your target, where do you want this number to reach?
Pramod Sagar
You know long-term, my statement will remain same 8% to 9% in volume growth.
Sahil Rohit Sanghvi
Okay. Even on.
Pramod Sagar
We are increasing the portfolio. We are increasing the base. So 8% to 9% is a very decent number when the market will be growing maybe 7% or so. So we want to grow a little more than market.
Sahil Rohit Sanghvi
Got it, sir. Secondly, sir, I missed congratulate on you on the TRM side. In FY ’24, we were at 31%, 32% of our revenue. We are at 35% now and you are looking at working — adding four more customers. So does that mean we are approaching 40% levels on the TRM contracts?
Pramod Sagar
I don’t know whether we will reach 40% with these three, four contracts or maybe 38%, but I think your target is to reach 40% in very short-term.
Sahil Rohit Sanghvi
Got it, sir. Got it. Yeah. Got it, sir. And thirdly, sir, are we a preferred supplier for a flu-controlled refractory still to all the large integrated plants or has it changed?
Pramod Sagar
You know the one of our competition and we are preferred supplier, in one or two cases, we outperform also like last quarter I said in GSW SMS 4, we got the first robotic solution and flag detection system and let us route handling through robots. So that was a very big breakthrough and it is substantial business about INR95 crores business in next five years contract. So I don’t think now there is a much gap between our competitor and largely are the only two suppliers are floor control and when it comes to converter lining or furnace lining or RHD gas we are the prefer supplier or.
Sahil Rohit Sanghvi
Got it, sir. Got it. And sir, with when it comes to these new capacities say Tata or JSW, whichever have been commissioned recently. Most of our supplies to these new capacities are with a lead as in before the commissioning happens, all of it is supplied or is there still some supplies that will happen for this new capacity.
Pramod Sagar
You know, initially, yes, we need to build-up our inventory and we put this inventory in those plants and they got delayed for two, three months, we have to leave it back. And then when they start, then we need to replenish these inventories time-to-time. So these are ongoing a process. And I would say every month we will be adding and the inventory into those plants. We are running at a decent level and I assume if China don’t do some spoiler game, we will continue to enjoy this growth.
Sahil Rohit Sanghvi
Got it, sir. And my last question will be, sir, sometime back, I think it’s been time now that we visited your facility, but you were — your R&D center was working on a few new products also like and some bit of advanced nozzles and all of that. And what is our pipeline of new products and what kind of potential do you see in that?
Pramod Sagar
You know we are trying to keep on adding new products or products which we are importing from our parent company to India. And now we are working on two, three products for Rajganpur plants from our global network and transfer of technology is in the pipeline, people are coming, people are talking to my R&D team and probably next two, three months’ time, it will happen and then we will start doing the trial production in those plants and maybe in six months’ time, we will shift everything to India. But having said so, now our local production is about 68% and import is 32%. It will have an incremental impact, it will go to 70-30 or 728. It will not eliminate imports, but gradually we are trying to reduce and bring it to a level of 80%, 85% local value.
Sahil Rohit Sanghvi
Would you be able to main sir these products?
Pramod Sagar
You will not understand this. This is a high-end bricks for cement and RSV gas sir and one or two low control products, which we are not at present making in India.
Sahil Rohit Sanghvi
Right, sir. Got it, sir. Good to hear, sir. Wishing you all the best and many congratulations against.
Pramod Sagar
Thank you. Thank you very much. Yeah.
Operator
Thank you. Next question is from Jonas Bhutta from Birla Mutual Fund. Please go-ahead.
Jonas Bhutta
Good afternoon, sir. I hope I’m audible.
Pramod Sagar
Yes, you asked.
Jonas Bhutta
Firstly, congratulations on a decent show in a very challenging time. A couple of questions and you know I joined the call maybe one or two or maybe repetitive.
Pramod Sagar
But, sir, why is this cracking? Initially it was okay, but now it is totally cracking. We are not able to hear anything properly.
Jonas Bhutta
Is this better now, please?
Pramod Sagar
No, I think either you are very close to the bike or what it is that someone is coming.
Operator
Yeah., if you are on a request you to use the handset.
Jonas Bhutta
Yeah, is this better now?
Pramod Sagar
Yes, much better.
Jonas Bhutta
Yeah. So you know, I joined the call a bit late and one or two questions may be repetitive. But what I heard was that the pricing pressure that we are facing due to the spike in alumina prices in the earlier part of the year, we are finding it difficult to sort of pass it on to the customer. Just wanted to understand because historically the industry had a fair bit of pricing power and you know, from your comments it seems to suggest that you know that has gone down is. Do you believe that this is more a structural phenomenon given that there has been a fair bit of local capacity addition that has come through and the Chinese imports are here to stay. So structurally the pricing power for the industry has sort of reduced.
Pramod Sagar
So, I think what you’re trying to say is because the competition or the industry add capacity, so just to fill-up their plants, they are not asking for price increase because they need to have a production of volumes, right?
Jonas Bhutta
Yes. And it’s just structural in nature.
Pramod Sagar
Yes, this is — this is the same thing I also observe that some of our peers who are trying to enter into this market, they are just don’t have a business requirement to decide the right pricing. So the small player, but you know they are go all-out to sell the product at any price just to be in the market. So we are not into that rate, that rate. We have our own strategy below certain margins, we will not enter into the business and I believe all these four, five big players are also on the similar thought process.
Azim Syed
Exactly. For example, traders, because they buy on a bulk basis, they need to get rid of this because the cash is also expensive. So on the small players, they are also motivated to sell at any cost.
Jonas Bhutta
Yeah. Understood. And given that our sales mix will be sort of going towards iron-making, you mentioned that is 12% today, it was insignificant last year and probably further increase based on the what you have in-progress.
Azim Syed
Jonas, again, the voice, although it’s not chipping, we cannot understand the question.
Jonas Bhutta
The voice is so I think I should go-ahead.
Pramod Sagar
You’ll try again, please.
Operator
Hello. Jonas, sir, you’ll rejoin the queue. We’ll move to the next question. Thank you. The next question is from Harsh from Marcellus. Please go-ahead.
Harsh Shah
Yeah, hello, sir. So from the call, I could figure out that there are various headwinds first being competitive intensity from China, both in our market as well as the end-customer market. The cement and the steel folks are also various with respect to the business and the export piece is also not going to fire off in a material way, at least for the next two, 3/4. So in this context, what gives you like the optimism that we’ll reach again to 15% EBITDA margin mark from Q2 onwards Q2 FY ’26 onwards?
Azim Syed
See, in our business, if you look from a long-term perspective, it’s always been cyclical, right? One basic phenomenon, what you see is that we already see raw-material prices coming down, okay, that’s one pieces that we have. Second, basically is that India will continue to produce and we have this broad product portfolio wherein we also give very-high margin products like flow control and we also get the seasonality of cement wherein our margins will get diluted and we also get projects of like an industrial project as well. So conservative — I mean, if you look at it from a long-term perspective and this is where we strongly advise us not to look on a quarter-on-quarter basis.
If you look at it from a long-term perspective, our portfolio, our long-term contracts and some of our contract structure in terms of how we — how some of our product performed gets paid out. This is — these are the three pillars where we think that we would be able to achieve the 15% margin. Regarding the Chinese import, it’s definitely a prevailing threat for us, but most of these people play in the commodity area of the business, which is again is very cyclical. So here is where we have the threat. We have seen these kind of threats in 2018, even three years back as well. So we believe that the long-term business fundamentals, our product portfolio optimization on our contracts, we think that we should be able to get Q2 ’26 onwards that we should be able to go back to 15 percentage level. And this is where we are also thinking that the market will put down on the raw-material pricing, the expensive inventory will go out, we can have a larger play in terms of what material to use, what to supply and so on and so forth. Hope that answered the question.
Harsh Shah
Yeah. And how much of a total top-line is from this aluminum and chromide based refactories where we are seeing this RM price volatility.
Pramod Sagar
Which is about, 30% 32% of our total portfolio.
Harsh Shah
Okay, so meaningful part of the portfolio. And any other raw-material where we are seeing this sort of volatility apart from aluminum?
Pramod Sagar
Yes, now after Chinese New Year this Magnetia also has gone up by about 40 $45. So it will have an actual material impact after four months or so when the material start coming after ordering to India to everybody, not only us to everybody. So we now have a busy that this is going to come up and how we are going to mitigate that risk of further dilution of margin by circular economy or looking at various project optimization at the same time, reaching out our customers well in advance for price adjustment and all those things. So this is easy one. We can correct it because we know-how that is going to happen. But prices every week was going up like anything.
Harsh Shah
And this $40, $45, how much would be the increase in percentage?
Pramod Sagar
That will be about 3%, 3.5%. Yeah.
Harsh Shah
Okay, got it. Okay. Thank you, sir. That was it from my side.
Pramod Sagar
Thank you.
Operator
Thank you. Before we take the next question, I request to participants to please limit your questions to two per participant so that the management is able to address questions from all participants in the conference. The next question is from Sanjay Nandi from VT Capital. Please go-ahead.
Sanjay Nandi
Hello. Good moon, sir. Thank you for the opportunity. Sir, can you just share the numbers for the flow control in our entire sales mix.
Pramod Sagar
Normally, flow control is about 25% of the total portfolio 70%, 75% is in lining business, 25% is to our control business in an extreme plant. Roughly.
Sanjay Nandi
That’s it. That’s it from my side. Wish you all the best. Thank you.
Operator
Thank you. Thank you. Next question is from Chetan Doshi [Phonetic] who is an individual investor. Please go-ahead.
Chetan Doshi
Yeah, congratulations Pramod and the team for the excellent set of numbers. First time we have reached a milestone of INR1,000 crores. Now the presentation this time doesn’t highlight as to how you’re going to sustain this figure in coming months-to coming quarters. And second question is that from the parent company, we were expecting lot of support in terms of technology transfer, but nothing is there on — this time the presentation, I’m not at all happy with the kind of inputs given.
Pramod Sagar
Thank you very much for highlighting these two issues. One is in previous question, we answered this that we are looking at a similar type of sustainable growth with some seasonality. As I said, cement in Jan-Feb, March is at its lowest level, there is no maintenance, etc. So there will be a dip from that angle, I would say. But yes, we could have put it in our presentation. And parent company, when you’re saying that in every call, we keep on appraising all the investors, the analysts how much product we are shifting even now in this call about two, three questions back, I explained that we are bringing more — more products to Indian plant from parent company and in the past also sleep, forest plug, clay from Brazil. So we keep on bringing those products and we are sharing our call, but we have not put in the presentation, but we are sharing all the information very transparently to all of you and is just to correct. The products are getting well expected in the market.
Azim Syed
Sorry, yeah. Just let me complete,, if you allow me. One basically is that normally we give the exhaustive presentation in the half year and full-year presentation. So I know that you are referring to all the products like laser part and other things that you were mentioning earlier. So this kind of exhaustive presentation we will definitely do in the first-half and second-half full-year presentation, you see a very comprehensive view. To answer your question on these kind of products acceptable, as Pramodji mentioned earlier, we are one of the first companies where we have implemented the robotic solution in the whole of India. So these kind of products are getting accepted, approved, but it also goes through its own validation period from an acceptance perspective, so on and so forth.
Chetan Doshi
Okay. Yeah. Thank you.
Azim Syed
Welcome.
Operator
Thank you very much. That was the last question in queue. I now hand the conference over to Mr Sagar for closing comments.
Pramod Sagar
Yeah. Thank you very much all the investors and analysts for very interactive discussions, very intruding questions also. So it’s very good to have a real interaction and we try to be very transparent, open with all of you as usual and we will keep on transparently sharing all the information with all of you. Thank you very much for your support. As always and looking-forward to your support in the future as well. Thank you very much.
Azim Syed
Thank you.
Operator
[Operator Closing Remarks]