Shyam Metalics and Energy Limited (NSE: SHYAMMETL) Q3 2025 Earnings Call dated Jan. 29, 2025
Corporate Participants:
Pankaj Harlalka — Head, Investor Relations
Brij Bhushan Agarwal — Vice Chairman and Managing Director
Deepak Agarwal — Whole-Time Director and the Chief Financial Officer
Analysts:
Amit Dixit — Analyst
Aryan Sharma — Analyst
Monal Tiwari — Analyst
Shaleen Kumar — Analyst
Rajesh Majumdar — Analyst
Anupam Gupta — Analyst
Tanishi Agarwal — Analyst
Pruthul Shah — Analyst
Sumeet Khaitan — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 FY ’23 Earnings Conference Call of Shyam Metallics and Energy Limited, hosted by Orient Capital. [Operator Instructions]
I now hand the conference over to Mr Pankaj Harlalka, the Head of IR from Metallics. Thank you, and over to you, sir.
Pankaj Harlalka — Head, Investor Relations
Thank you,. Thank you, ladies and gentlemen for joining us in the call. I’m, Head of Investor Relations at Shyam Metallics. Wish you all a very good afternoon, a very happy new investing year and a warm welcome to the 3rd-quarter FY ’25 post-results conference call. Before we delve into discussing the quarterly numbers, I hope you all had an opportunity to review our press release and the attendant investor presentation read along with the safe-harbor statement, which are available under the Investors section of our website and the same are accessible in the BSE and NSE websites. To discuss the 3rd-quarter and Nine-Month results FY ’25.
I’m joined by Mr Brij Bhushan Agarwal, Vice Chairman and Managing Director; Mr Deepak Agarwal, Executive Director, Finance and Compliance; and Mr Sumeet Khaitan from Orient Capital, our Investor Relations Partner.
Now I would like to invite to provide his perspective on the performance of the 3rd-quarter of the current financial year. Thank you, and over to you, sir.
Brij Bhushan Agarwal — Vice Chairman and Managing Director
Hi, very good afternoon to everyone and thank you for joining the call. This quarter, we achieved a very strong operational and financial performance despite facing a challenging macroeconomic environment. Our proactive approach to managing this challenges has enabled us to maintain profitability while staying aligned with our long-term growth objectives. Our diversified business model continues to yield positive result, result further reinforcing our confidence in our strategic vision. This quarter financial performance has validated our innovative approach, reaffirming our expansion effort and steering the company towards sustainable growth and long-term success. Our production, capability and facilities have been remained robust, driven by our commitment to operational excellence, continuous investment in advanced technology.
Though modernization and process enhancement, we have significantly improved both capacities and product quality across our portfolio. During the quarter we successfully commissioned operations at our blast furnace at our plant. This marked a significant milestone in our expansion strategy with the facility already in-production. The plan is expected to enhance our bottom-line by improving the cost-efficiency. As a part of progress, we sold the trial production of liquid steel pig iron from the plant in this quarter which was well-accepted in the market as a product. Additionally we also commissioned our cold-rolling meal complex and we were able to start with a small tonnage of cold-rolling coils during this period. Our focus on value-added product remains as a key driver of growth having achieved a CAGR of 43% over last five years. We as well anticipate continuous expansion in this segment supported by the introduction of new high-value product in the coming year.
Since our IPO is in 2021, we have announced a capex in the multiple phases and out-of-the total capex of INR10,000 crores, close to INR5,873 crores has been incurred in nine months FY ’25, amounting to nearly 59% of the total plan investment. Of this, close to INR4,350 crores have been capitalized by FY ’25 in the Nine-Month quarter. With the successful commissioning of the Oven plant batteries, the power plant, blast furnace, cold meal, a substantial portion of the incurred cost has been capitalized, including a significant amount in the last month. In the aluminum segment particularly, in this specialized foil product, we have emerged as country largest exporter of specialized foil.
Foil and looking ahead, we plan to strengthen our presence in this space by pattern-ish product in the specialized application, which will drive both in the terms of volume, volume profitability in the coming years to come. The trust which has been shared by our investors and as a participation in this institution in the last few years, we had strengthened and identify efficiencies, both vertical and horizontal integration, enabling us for sustainable profitability, diversifying into B2C space, reducing the cost, increasing the efficiency of the existing plant and also enhancing our forte more into the specialized and value-added products and increase our contribution in the terms of revenue and also increase the bottom-line and profitability in the organization. We are pleased with the progress made in this quarter, both in operational execution and strategic advancement.
We remain confident in our ability to deliver long-term values to our shareholders. Our focus on the operational excellence, sustainability, innovation and cost-efficiency will allow us to navigate short-term challenges while positioning us for sustained growth in the year ahead. At Sharm, we leverage our deep expertise in high capex business and methology to drive sustainable growth. By continuous execution on the long-term strategy and improvement on our daily learning and application and implementation of — for the betterment in our business strategy that boost volume and relentlessly optimize the efficiency. We are positioning to achieve a minimum of double-digit CAGR annually. This approach not only fuel our growth strategy, trajectory but also enhance the profitability through the continuous cost-effectiveness and improvement in the performance.
Now with this, I conclude my speech and I would now request our CFO, Director, Mr Deepak Kumar Agarwal to take us through our financial performance. Thank you.
Deepak Agarwal — Whole-Time Director and the Chief Financial Officer
Thank you so much to Deepak. Thank you, sir. A very good afternoon and Happy New Year to all the participants. I thank all of you for taking time-out on this call to discuss the results for the 3rd-quarter of the current financial year ended 2025. The global operating environment remain influenced by geopolitical and ongoing economic slowdown in the major region. Steel export from China averaging 9 million tons per month-in 2024 have contributed to a decline in the steel prices worldwide, including in India. Though we are not directly affected ripple effect in, moreover, for the first time, we have been seeing long product price have been higher than the HRC prices. The macro-environment has been challenging since the start of this year driven by the factor like sluggish retail demand and a slowdown in the government spending. I would like to share a quick review of the reported consolidated financial for the 3rd-quarter under review. There has been an 13.2% revenue growth in-quarter three of the current financial year YC versa quarter three of the last financial year. We have been consistent cash quality with a net cash balance of INR768 crore in the quarter two of the current financial year as against the positive of INR1,099 crore in the quarter two of the current financial year. As you all aware that the power — we have 82% of the power sourcing from our own captive power plant at a price of INR2.4 per unit in-quarter three of the current financial year, while the average power cost, including the grid power, our total power cost including the grid power is INR3.03 per unit.
This bringing a huge delta and also contributed a huge in our total EBITDA. In-quarter three of the current financial year, on a consolidated basis, the company reported the operating revenue of INR3,753 crore, a growth of 13.2% over quarter three of the last financial year. The sales mix constitute a higher percentage of volume from finished steel, which account for 49% of the total revenue. The export is contributing 11% to our total revenue. The company has been able to book an operating EBITDA of INR456 crore, increase of 12% over the quarter three of the last financial year. The EBITDA margin in-quarter three was 12.2%, while the overall EBITDA for the quarter amounting to INR507 crore, that is INR51 crore is generated through interest income from investments made in government security, bond, arbitrage fund, etc. Primarily in order to maintain that trend in EBITDA number, we have been judiciously and cautiously on all our other cost components. Our profit-after-tax for the quarter stand at INR197 crore, an increase of 57% on year-on-year basis.
The PAT margin in this quarter is 5.3%, which is quite sound considering the current market trend and peer comprehesion. The realization of pallets, and have also improved by 7% and 4%, respectively quarter-on-quarter. In-quarter three of the current financial year, we have sold — as you all aware that during this quarter, we are commissioning our blast furnace and cold-rolling mill and we have sold little bit 27,414 tonne of pig iron and 3,741 ton of CR coil from our newly commissioned plant. We are on the consolidation phase-in this segment. As volume will increase, margins should also be increased over a period of time. The Indian steel prices remain under pressure on a higher import and competitively weak export. At Metallic, we have always focused on our capital allocation policy. We reinvested 70% of our total cash generated bank into the business remained 20% as a liquidity surplus and returned 10% to our esteemed shareholder as a dividend.
The policy shall us to be cash-positive even at the peak of our capex cycle. Keeping this policy in mind, the Board has announced an interim dividend of INR2.25 per share, disbursing around INR63 crore in the form of dividend to our valued shareholder out-of-the Nine-Month PAT of INR689 crore. The policy also insures with us a steady other income comprising of interest income from investment made in government bond and ensuring timely capex implementations for our company. As on September 2024, the amount parked in government bonds and other liquidity amounting to INR2,172 crore. As a synopsy of capex and growth plan has been laid out in the investors presentations and we are all well track to execute them as per the expected timeline. We look-forward to maintain this positive momentum and delivering continued success in the upcoming quarter as well.
With this, I now open the forum for question-and-answer session. Thank you. Thank you to everyone.
Questions and Answers:
Operator
Thank you, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Dixit from ICICI Securities. Please go-ahead.
Amit Dixit
Yeah, hi. Good evening, everyone, and thanks for the opportunity. First of all, congratulations for a good set of numbers in a very testing quarter. The — I have couple of questions. The first one is essentially if I look at the EBITDA per ton, which is outlined in Slide number 24. So compared to your peers who have shown a decline of roughly INR500 to INR800 a ton, I mean from the results that have been declared so-far. So your EBITDA per ton in carbon steel has actually gone up by almost INR1,000 a ton. So just wanted to understand the key drivers behind that, whether it was because of more downstream products or cost? Because iron-ore cost I know went up in the quarter but surprisingly your EBITDA also went up. So just wanted to understand the key drivers behind this.
Brij Bhushan Agarwal
First of all, we had been working continuously on the reduction of the cost side. So once we had commissioned the blast furnace, we were able to extract the heat which comes from the blast furnace and we were able to utilize some energy balance of the hot gases into the plant you know in the steel-making process iron-making in the steel rolling process. Number two we had been always focusing on the concentrating on the upgradation on the technology, how to improve the yield efficiency and also all this overall, I would not say that just on some ground of the coal prices we have got the benefit.
But yes, it is a combination of, you know if you see the efficiency of the plant has gone up, the heat balances we have been able to improve. And also continuously, we are accelerating our marketing process on the B2C side with better distribution, sales management a lot. So overall, this is one of the overall basket where we have seen that we had been able to push and accelerate the bottom-line. Thank you.
Deepak Agarwal
And in addition to that, I would also like to say something, if you see the realizations on carbonish steel in the second-quarter was INR43,205. But if you see in the 3rd-quarter, the realization is INR43,684 per ton. That is also impacted in improving our EBITDA in carbon steel.
Amit Dixit
Sure, got it. The second question is on the — on EV. It was the first-quarter where we actually got into the or I would say, flat product where we sold cold-rolled coil. So just wanted to understand the market feedback of the same, how has the response been? Which region if you can share, I mean, where you have targeted this and how is the demand shaping up for this product?
Brij Bhushan Agarwal
See, we have just commissioned the coal rolling mill complex and I would say that we are still at the process of stabilizing our market quality is well-established because you know we had put up the World-class facilities. There is no concern as such majorly on any of the product. But since all these B2C on the cold-rolling meal color coated side and all is all under the annualized marketing quantum strategy so since we are entering into the new year of contracts and all we will be able to do more better and from the quality point-of-view, there is hardly a concern whether we are considered to be one of the good one, if not the best one today. And our major focus right now is on the Eastern market because you know Eastern market is a market where we are able to generate a better delta in the terms of the logistic and the availability of material near to the consumer. And the other part is the Northeast. So these are the major area of marketing. I would say more than 75%, 80% we are concentrating in this belt.
Amit Dixit
Thank you. The last question is on, if I look at the Slide 15 and 16, so while it is very heartening to see the capex being executed well within timeline and we have seen that capacities have come out every quarter and therefore the — that has provided a cushion against — a cushion for the revenue growth. But going ahead, slide 15 and 16 suggest that many of these capex programs outlined are still in the in the initial stages or close to 10%, 15% of capex has been spent. So just wanted to understand over next two, 3/4, where the growth is going to come from? Is it from the — from the ramp-up of cold-rolled mill and maybe external sales of pig iron or is it more contingent on some of the stainless steel plant initiatives?
Brij Bhushan Agarwal
See this coming year, since the blast furnace is being commissioned and it is getting stabilized, we expect that the commissioning of our oxygen plant should take place early March. So where we see that close to around INR2,000 per ton will be able to save our cost because it is a process where you have to stabilize the glast furnace center plant, coke over and then you start feeding the oxygen. So we’ll see a lot of improvement coming up from the margin side from the big iron businesses. Cold-rolling meal as well as the color coated business completely is under the process of stabilization in the market. So the new growth we are going to see in this sector as well.
In the stainless steel business as well, we are — we are able to commission the wire plant, the stainless steel wire and the bright bar unit in the coming year. So we’ll see the enhancement of the value addition and the improvement in the bottom-line is as well going to have a good impact in the product portfolio because we see that we have to target till the end-of-the end-of-the product so that we are able to extract the best-value of our product what we are in from the oil to the steel. So these are the three areas. Apart from that we will be commissioning the power plant in by early next quarter, maybe April, May. So we’ll see a substantial value in the — terms of the benefit from the cost side coming up from the power plant, commissioning because power has been always over 40 on the cost side.
So cumulatively, it’s a mixture of all side, I would say 360 degree where the new innovation on the product is happening. And the new expansion, as you said, rightly, we are concentrating on — we have started the construction work for our aluminum business complete we are putting up the green aluminum facility with the casters and we are adding the foil capacity where we will be making the multiple special grid of foil because metallurgy wise you have to have a control if a specialized product is required. We can’t depend on the other sources to cater to a better market with a higher realization.
And on the steel side also, we have started the construction work on the flat product in Orissa where we see that in the time to come, we’ll be entering into the flat product of stainless steel where you know we are seeing there is lot of potential in the stainless steel pipe side, though we don’t have any such strategy on making the stainless steel pipe right now, but we will be focusing ourselves as one of the producer from the stainless steel side, we will be making the stainless steel from the ore to metal. So this is right now the major domain and some additional facility on the DRI side is being you know happening where we see that in the end-of-the coming year we will be able to commission some portion of the DRI. These are the major expansion, which is going on. And apart from that the benefication plant is also going on where we will see the substantial cost and quality benefit coming up from the iron-ore side because we see there is lot of benefit on the steel-making side if we are able to improvise on the iron-ore benefications. Thank you.
Amit Dixit
Great, sir. Thanks a lot for the elaborate answer. Thank you and all the best.
Operator
Thank you. Participants, please press star N1 to ask a question. The next question is from the line of Aryan Sharma from B&K Securities. Please go-ahead.
Aryan Sharma
Yeah, hi, sir. Thank you for the opportunity. So what I wanted to understand was how much time does it take a new plant to achieve breakeven? So like for example, you recently commissioned a blast furnace unit and then there was the coal rolling new unit. So how much time will these take to achieve breakeven at what capacity utilization these new capacities you will take to achieve breakeven.
Brij Bhushan Agarwal
Generally once you start commissioning your plant it takes close to three to six months-to stabilize completely and I think you know this is a time when we are able to overcome the breakeven as well.
Aryan Sharma
Okay. Sir, one more thing I wanted to understand was what could be the run-rate of depreciation that we — quarterly run-rate of depreciation that we can expect. So for example, this quarter the depreciation has gone up to around — it has gone up to INR200 crores or something so what we see — what we have seen this in the last quarter as well, it had gone a lot and then suddenly it came down in Q4. So can we see similar trends in Q4 this year as well or — and in the coming years as well or will this be the new quarterly run-rate?
Deepak Agarwal
No, depreciation actually is a outcome of the capitalization. Last quarter itself, we did a capitalization of more than INR1,400 crores, yeah, because the glast furnace, the coke oven and the CRM plant aggregating were capitalized all at-once. So that is why you see a higher depreciation. Otherwise, there is no change in policy at all. So whenever — whichever quarter you will see a higher capitalization, you’ll see a higher depreciation. And so now you’ll see the base of this quarter. So next quarter will be a similar base. And if obviously more capitalization happens, which is a continuous process as far as our company is concerned. So you will see a similar kind of depreciation numbers.
Aryan Sharma
Okay, sir. Thank you. That’s it from me, sir.
Operator
Thank you. A reminder to all participants, you may press join one to ask a question. The next question is from the line of Monal Tiwari [Phonetic] an Individual Investor. Please go-ahead.
Monal Tiwari
Hello.
Operator
Yes, please go-ahead.
Monal Tiwari
Yeah, hi. So my question is that what is the margin that we are looking at in the eye and as we have a like so is that I in this recent quarter and what is the visibility for the future for Pegai? And also if you could throw some color on the margin of pellets?
Brij Bhushan Agarwal
See where the pellets are concerned as you see, we are maintaining the same kind of a margin what we have emphasized in the beginning of the first-quarter, which is around INR700 to INR800 a ton. And where the is concerned, it is that we will be able to plug the margin of close to, you know, 2.5 to 3,000 rupees a ton how much 2 and how to 3,000 rupees at all.
Monal Tiwari
Okay.
Deepak Agarwal
Is the initial phase once the capacities increase then we will look at a higher-margin. But right now for the coming year, this is what we are anticipating.
Monal Tiwari
Okay, thank you.
Brij Bhushan Agarwal
We mean like close to around INR200 crores to INR250 crores in EBITDA we are considering from the business in the coming year.
Operator
Thank you, sir. The next question is from the line of Shaleen Kumar from UBS Securities India. Please go-ahead.
Shaleen Kumar
Yes. Thank you so much., first of all, congratulations. Good set of numbers given the conditions and all. Sir, I got dropped off for a few minutes, so I’m not sure if you have answered this or you have covered in some of the questions. Sir, one thing, let’s talk about what’s happening, right? So while you guys are — you are doing a very good job given markets are tough, but what is your perspective on the market to begin with? Let’s understand that, that the difficult — given the loans do not face so much competition from import, what is the reason — underlying reason you see and any sense of the recovery timelines where we could see demand or your realization can improve. So just let’s start with one broader macro question from us.
Brij Bhushan Agarwal
Good afternoon, Sharien. You know if you see this nine — nine months 2025 and the kind of numbers, the EBITDA I think you know this is self-explanatory that in-spite of so much environmental challenges across the planet we had been able to sustain with the Paris. The strength of our institution is a strategy. If you see, we have a multi you know basket products created a value chain across the different products and we are able to balance different products with a different strategy and taking and extracting the best-in the terms of the product realization and market. So in the time to come also, if you see our major expansion is coming in the stainless steel market, in the stainless steel business where we have a ferrochrome, we have a iron, we have our own captive power and we have our own and we are planning to charge the hot metal into the furnaces to optimize and capitalize on the energy cost and also to see how can we create a best-value from the downstream businesses where we don’t have any much inventory overheads of carryover of the raw-material as it is going to be simply a downstream and upstream of the existing expansion which is coming up.
Apart from that, if you see, we are — our major expansion is coming up in the aluminum businesses where we are making all the specialized foil. And today, in this span of less than two years, we are now as country largest foil producer with a specialized foil. We are not working on the commodity foil. Our focus is more on the qualitative high-value and export business. So our new expansion which is going to come up in the aluminum sector is also cater to more higher-value addition, more higher niche product in the aluminum sector. The other expansion, what we foresee is on the backward side like we are adding more power plants, which is going to cater to our existing expansion and help us to rationalize and be more productive in the terms of cost and the supply of energy. So these are the major area where we are focusing right now.
And the new expansion what we have commissioned as we all know that the color coated business is growing very fast and with our expansion in the stream of a new vertical of the color coated business where we don’t have much challenges on the product side as it is the same supply-chain management of our existing long product and structure business. We catering and will be able to rope our existing supply-chain from B2C business into a color forum as well. So overall, I see you know whatever capex what we have done till-date, it is very, very strategically aligned with our brownfield expansion. And whatever we have been focusing right now, what we have been promising in the past, we are driving on the same alignment of value addition, B2C market and getting into a higher business like the stainless steel getting into the bias of the stainless steel has a very-high potential as we all know and it is completely a very niche product, a bright bar as well is a completely a niche product. And we will be aligning more-and-more in the time to come to focus our business model more on the area of value addition by increasing more margins and creating more niche in our existing business. Thank you.
Deepak Agarwal
Just to add, if you see on the industry side, right, which you asked. So generally from China, flat products are imported. And it’s in my lifetime, I think first time, there is a very important aspect that there has been a decoupling from the prices. So for the first time in the last one year, you would have seen a lot many times where long steel is higher than HRC, which was not the norm. So you can understand that there is a change in the industry’s overall industry scenario for long steel.
Brij Bhushan Agarwal
And whatever product we are doing, hardly there is an import like we are taking the advantage of the import scenario, but in our — all the product side, if you see we are not doing anything which has any kind of a threat from the import into the country. So we are basically more aligned with the source from the mineral to metal and which is hardly any kind of an export happening in our product.
Shaleen Kumar
Sir, there are many new capacities are coming for us and few of the capacities are ramping-up. So if ballpark, I think it will be fair to assume that FY ’25 we will do an EBITDA of above INR2,000 crore, it will be more than that operating EBITDA, right? But given that in your internal assessment, you can give a range, if not necessarily guided, what kind of additional EBITDA can we build-on these new capacity or capacities which are ramped-up, whether it’s — whether it’s color coated ultra, big iron, et-cetera, assuming the realization remains the same where they are right now. So any broader range additional EBITDA we can clock in FY ’26, is it possible for any color on that?
Deepak Agarwal
Yes,, if you see — if you see in the past also, we are growing both on the top-line and bottom-line with a CAGR of more than 10% to 15%. Definitely with the commissioning of blast furnace and color coated plant, what we are achieving the EBITDA in the nine months, definitely it will be grow with the final run-rate or it will be more as far as in the same realizations. If the realization will further improve, then definitely the EBITDA will further improve. But if these realizations, our EBITDA for the next year will definitely grow with a run-rate with the existing enhancement run-rate maybe in the tune of 10% to 15%.
Shaleen Kumar
Sir, I think you think EBITDA can grow faster here because you have a new — this ramp-up will happen over here. So basically, if we are clocking INR200 crores 100 crore maybe more in FY ’25. So with all these things happening, is there a chance that you can do higher than that?
Deepak Agarwal
And with the commissioning of blast furnace and with the commissioning of power as our MD is already sharing that, definitely our bottom-line will improve. But we always committed — we always committed less and deliver more. So we will be very much conservative on delivering on a guidance as far as figure is concerned, but we will be definitely delivering more, but we will be always-on a conservative side.
Shaleen Kumar
Okay. Take a. That’s helpful. I think given the environment is so tough, even a mid-teens or high-teens kind of a growth is very welcome. Yeah, I think that’s it from my side. Thank you so much.
Deepak Agarwal
Thank you.
Brij Bhushan Agarwal
But yes, by the year ’27, ’28, we are targeting, we should be able to touch INR4,000 crores with our new expansion coming up in aluminia and stainless steel and all. This year, as we have just started the project in the aluminium and all, we can see that all these projects ramping-up in next couple of years, you know. So that if rapen up, up, so third year onwards, we can see a very different numbers because it’s a completely a different strategic move. What we are trying to create in Shar Metallic is we just don’t want to be a just a HR company or anything. We are making flat products or we are making something which is highly volatile. We want to reduce the volatility in our business strategy so that we have a space in all the niche businesses in the metals because we understand what metal is.
And if you see in last 20 years, you know, the way our organization has driven and taken all the four roughest time you beat the Lemon Brother 2008, 2009, 112, 15 ’16 and the COVID, we have been always working on a very different strategic move and we would like to abide with our thought of going safe, steady and premier.
Shaleen Kumar
So from if you’re targeting upward of INR4,000 crores somewhere in FY ’27, ’28, CAGR will be more than 20% for next two to three years. And we want to be conservative, no.
Brij Bhushan Agarwal
We don’t just don’t want to give any kind of a — we want to make sure that what we say we want to deliver more. So all this new strategic approach, what we are seeing in the businesses right now is going to ripe up in the time to come.
Shaleen Kumar
Sure,. We are very happy to see the execution pace. At least that’s very comforting. Thank you so much. And best of time.
Brij Bhushan Agarwal
Thank you.
Operator
The next question is from the line of Rajesh Majumdar from B&K Securities. Please go-ahead.
Rajesh Majumdar
Yeah. Good evening, Ankard, and again, congratulations for a very good set of numbers in the circumstances. So I had one short-term question and one long-term question. So the short-term question is that we saw a fall in the realizations in 3Q across most of product categories. So what are the trends for 4Q till Jan? Do we see similar realizations or have you seen some uptick in any of these products?
Brij Bhushan Agarwal
I don’t see a very major changes because Rajesh, you know like in this quarter, there is some good demand picking-up because we are getting into a seasonal quarter now. And with the new changes on the strategy from the government side, the RBI policies and all what we are seeing right now. We see there is going to be the changes happening, but it’s too early for us to comment right now, but it is on the positive side, I would say.
Rajesh Majumdar
Right. So basically, we can take volume growth, but not much price growth. Is that the right way of looking at it?
Brij Bhushan Agarwal
I would say, too early for us to share anything right now because we are still in the middle of or the end of January, yes.
Rajesh Majumdar
Right. And sir, my second question is on a slightly longer-term on the DI pipe business, if you look at any of the DI pipe historical projects, these projects have taken anywhere between 1.5 years to two years to ramp-up. So I mean, once we put up the capacity, the first capacity says due in FY ’26 and will we take two years at least for this capacity to breakeven in terms of reaching a certain level by which is — and if not why, what are we doing differently from the conventional DI pipe projects?
Brij Bhushan Agarwal
See, DI Pipe is a downstream facility of our acquisition. Right now, we have — we are doing the modifications and upgradation of our furnace. We expect to commission the glast furnace of the division also middle of this year. Sorry, I forgot about this subject to discuss in my previous questions. And TI will take another couple of years to commission. But as an overall thing, DI is a very small investment on the total capex cycle of the — at a group level. And it is too early for me to share because generally a product like DI has lot of registration process and since we are in a very large table of the product revenues and also the contribution of DI is going to be very minimum and I don’t see right now any kind of a challenges, but yes, generally once you commission the DI, it takes around a year and a half to get everything streamlined.
Rajesh Majumdar
Yes, that’s helpful. But on the other project additions, last one question, you don’t foresee that kind of a scenario. On the other stainless steel and alumina, etc., we don’t see that kind of a process of ramping-up in terms of breakeven points being 1.5 years, two years away.
Brij Bhushan Agarwal
No, no, no, generally six months-to nine months because in the still aluminum business, we are already very much established. So once we are going-forward integration and horizontally, we are doing the expansion in the foil business. So I don’t see much challenges. But in the stainless steel business, if you see, initially we are starting out with a complete SMS and the steel mill, the flat product and the cold ordering meal complex and all where we are targeting to cater B2B initially. And to cater to B2B, it’s not a very big challenge because there is hardly a producer except one or two in the country. So we don’t see any kind of you know challenges in our entry because the plant would be generally with our past experience and the present technology, what we are doing, we are doing World-class. So hardly six to nine months, you know.
Rajesh Majumdar
Thank you, sir. Thank you and best of luck. Thank you.
Operator
Thank you. A reminder to all participants, you may press star and one to ask a question. Thank you. The next question is from the line of Anupam Gupta from IIFL Securities. Please go-ahead. Sorry to interrupt Anupam, you need to be a little louder please. No, you’re not audible your voice is breaking up, Anupam.
Anupam Gupta
Am I audible now?
Operator
Yes. Please go-ahead.
Anupam Gupta
Yeah, good evening, sir. So congrats on a good set of numbers. And Mr Ann on the commissioning of the blast furnace as well. So just one question which I wanted to check. So your delivery on project commissioning and capex has all — has always been strong and efficiency focus has also been strong. What are your thoughts on improving the raw-material security? So as of now, obviously, everything is market-linked both iron-ore as well as coal. Any thoughts that you have any plans in terms of improving the raw-material security going ahead?
Brij Bhushan Agarwal
Yeah,, we are very much in the mature market. And you know these auction processes of mines are not a very economically feasible because all the auction prices and all, but we are always active on securing the raw-material, but on the economic cost-benefit, we don’t want to take any securitization on the raw-material side by paying a super hefty premium and increasing our cost and reducing our margins or ROI or IRR. So we are always in sync, in-game for all the opportunities, but you know, it depends. But yes, it is yes, yes for a better opportunity and no, no for a non-feasible opportunity. Since we have a leakages for the iron-ore from mining corporations and we have a sub contracts with the private miners and all you know which is and in last 20 years you know we had never had any kind of a concern on the availability of the qualitative minerals whether we discuss on the iron or coal and all but yes I don’t know this is my concern and in the time to come yes coal is one of the area where we see with the kind of action happening from the Coal India front and the kind of pricing what is available in our country.
Today, we are almost one of the most competitive and qualitative coal producer in the country from the Coal India prospect, not from the sham prospect. So we are taking all the advantages. And if you see other side also, you know, we always have a distant advantage of our plant location because we are on the coal-bed, whether we beat Urissa near to the MCL and whether we beat Bengal plant, which is on the eastern coal field. So we always like to capitalize on the coal value and with the kind of supply which is happening from the coal India side vis-a-vis the demand and all, I don’t see any kind of crazy pricing in the carbon businesses and with the transformation happening on the usage. So there’s nothing major to worry. Maybe some kind of surprises might come because of some raise or some kind of logistic issues and all. But in our case, in logistics also we are well-covered with our captive rigs. We have invested more than 20 rigs for the supply of minerals and all to our plant.
Anupam Gupta
Thanks very understand, sir. This is helpful. Thanks a lot, sir. That’s all from my side.
Operator
Thank you. The next question is from the line of Tanishi Agarwal from Goldman Sachs. Please go-ahead.
Tanishi Agarwal
Hi, my question to you is, how do you envision the growth and development of your company over the next five years?
Brij Bhushan Agarwal
See, see if you see, Shar Metalink is a very different company like it is I’ve always been very vocal in saying that you know if you see it is a multi basket metal company where we are specializing in aluminum businesses. So we have to have a CAGR of around more than, 15% 20% in the aluminium business, in the foil businesses, we are developing lot of new products in the sheets, in the aluminium, some battery foil in the aluminum and all. Stainless steel as well, we focus ourselves like in next four to five years, we should be able to derive a revenue of close to around INR7,000 to INR8,000 crores, more than $1 billion from the stainless steel business. So the new expansion is going to also help us to enhance our value chain in the stainless steel apart from that, long products, we are focusing more on the downstream to create more into the wire businesses, getting into more B2C space so that we can enhance more margins and add more value from the little capex, not a major capex and we focus more on the specialized wire businesses.
On the structural steel, what we are doing, we are making specially now the railway structures and all which is of the very-high demand and we are getting into a specialized structures of the transmission line, which is also helping us to enhance more value on the product side. From the raw-material side, yes, we are putting up a benefication plant which will help us to reduce the cost of the iron-ore by procuring more iron-ore at a competitive price and also creating more value in the terms of margins. So down the size, down the line four to five years, I expect that we should grow at a CAGR of more than 15% to 17% and we should be one of the very unique company as a metal collaborate with the multiple ferrous and non-ferrous business with a high-margin sustainable as well as with minimistic volatility what we see in the market in the other peers and all. And all of our new capex, what we plan to do is very, very strategically approach with the minimum iron of close to 17% to 20% with a long-term strategic and growth options like wherever we get into a business, we always see that we should grow in the tune of 15% to 18% so that we should be — drive the volume, margins and we learn more-and-more so that what we are doing, we are able to create more growth for our shareholders.
Tanishi Agarwal
Thank you.
Operator
Thank you. The last question is from Pruthul Shah from Anubhuti Advisors. Please go-ahead.
Pruthul Shah
Yes, sir, thank you for the opportunity and congrats on good set of numbers. Sir, just I was just referring to the sales volume projections for FY ’27 that the team has done. So considering that and multiplying it with the current quarter’s EBITDA, the projected EBITDA that we can earn-in FY ’27 is around INR3,100 crores. So just wanted to have a comment on this number that whether we are internally looking at INR3,300 crore kind of EBITDA, would it be in this range or it will be much higher due to operational efficiencies and other initiatives that we are doing?
Brij Bhushan Agarwal
This is not a very crisp question, I would say, but we have to understand that today numbers more has to be driven by the growth strategy that all our initiative what we have taken shows a growth strategy and since we know the stainless steel business EBITDA margin, what is — we have projected vis-a-vis the market, we have been very extremely conservative. Aluminium, we are the very true example in last couple of years what we had been able to deliver getting into a new space and creating a new benchmark in the foil businesses. The kind of blast furnace what we had put up is World-class and you know it is level one automation with the highest-level of efficiency in the terms of the utilization and cost.
So we expect that yes we should be falling within the range of what you are saying, maybe more or maybe a little less. But yes, from the plant, from the strategy point-of-view, from the cost point-of-view, from the marketability point-of-view, from the de-risk point-of-view in the terms of multiple products, I would say that you know, we are extremely competitive and the new businesses of color coated, which we are going to see the colors in the coming year is going to be highly value-creation for the company in the terms of market, in the terms of sustainability in terms of growth for the coming year to come. Thank you.
Pruthul Shah
Okay. Thank you so much.
Operator
Thank you. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Mr Suneet Sumit from Orient Capital for the closing comments.
Sumeet Khaitan
Yeah. Thank you for joining us on the call today. I would also like to thank the management for sparing the time and answering all the queries today. We are Orient Capital, Investor Relation Advisors to Shar Metalics Energy, Sharm Metallics and Energy Limited. For any queries, please feel free-to reach-out to us. Thank you, and over to you, management. I would also like to management to close — give the closing remarks. Thank you.
Brij Bhushan Agarwal
Thank you, everyone.