Tata Metaliks Ltd (TATAMETALI) Q3 FY22 Earnings Concall Transcript

Tata Metaliks Ltd (NSE: TATAMETALI) Q3 FY22 Earnings Concall dated Jan. 14, 2022

Corporate Participants:

Sahil Sanghvi — Investor Relations, Monarch Networth Capital Limited

Sandeep Kumar — Managing Director

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Analysts:

Mithun Aswath — Kivah Advisors — Analyst

Rohan — — Analyst

Bharat Sheth — Quest Investment Advisor Pvt. Ltd. — Analyst

Vineet Maloo — Birla Sun Life Asset Management Company Limited — Analyst

Kunal Kothari — Centrum Broking Limited — Analyst

Falguni Dutta — Jet Age Securities — Analyst

Yogansh Jeswani — Mittal Analytics Private Limited — Analyst

Saket Kapoor — Kapoor and Company — Analyst

Mukesh Gupta — — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Tata Metaliks Limited Q3 FY ’22 Earnings Conference Call hosted by Monarch Networth Capital Limited. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Sahil Sanghvi from Monarch Networth Capital Limited. Thank you, and over to you, sir.

Sahil Sanghvi — Investor Relations, Monarch Networth Capital Limited

Yeah. Thank you, Faizan. Good evening to all. On behalf of Monarch Networth Capital, we welcome you all for the Tata Metaliks Q3 FY ’22 earnings call. From the management side today; we have their MD Mr. Sandeep Kumar sir; their CFO, Mr. Sengupta sir; and also joining us is Pawan sir from the Tata Steel Investor Relations team.

So without taking much of the time, I will hand over the call to Sandeep sir for the opening remarks. Thank you, and over to you, Sandeep sir.

Sandeep Kumar — Managing Director

Hi. Thanks, Sahil. Good afternoon, everybody. This is Sandeep Kumar from Tata Metaliks. Well, we will take a lot of questions from you guys. But just to give a little bit of a summary. Well, the performance of quarter 3 has been a bit mixed, in fact, lower than what we would have wanted. There have been some positives, there have been some negatives and I’m going to summarize that. Number one has been the higher cost of raw materials. Iron ore prices peaked during June and July. And thereafter, they had come down, but the impact of those prices normally takes a few months to come in, so that’s played out this quarter. And, of course, coal peak in September, having crossed $400 — maybe I think about $410, FOB Australia, so that also you see some impact, although not fully in quarter 3. So iron ore impact, coal and, of course, whatever we buy from the market, we buy about 20% from the market. That’s been — so all these three factors have played an important role in eroding our margins. However, we were able to get a increase in the finished goods prices in quarter 3. Though, November onwards, the prices started dipping on the pig iron side and therefore, the full increase of the cost push could not be translated into the price increase of finished goods. So, therefore, net-net, you had a negative margin on account of these two factors.

But what we did better was on the ductile iron pipe deliveries, which were significantly higher, if you look at the numbers. And it was down by, let’s say, the pig iron volumes, they came down compared to the previous quarters, they were at 76,000 tons versus 91,000 tons in the previous quarter. So that’s about 16% drop. But the ductile iron pipe sales were up by 30% compared to 52,000 tons in the previous quarter, we did about 67,000 tons. Also, for the purpose of record, this quarter, the ductile iron pipe sales, the quarterly sales of quarter 3, have been the highest ever. So 67,000 tons as far as our entry [Phonetic] goes. So 1,000 [Phonetic] tons were tremendous performance in terms of deliveries of ductile iron pipe. But pig iron to that extent was lower. So — and mind you that for us the main, I would say, profitability has been coming in from pig iron this year because the ductile iron pipes continue to be delivered at old prices. We are one of the few players in the industry which are still honoring [Technical Issues] and core we continue to supply at old prices. So have been newer bookings as well. But the proportion of [Technical Issues] is, therefore, you do not see the increase in pig iron prices.

Operator

This is the operator. Sorry to interrupt you, sir. The audio is slightly breaking from your end, sir. Please check.

Sandeep Kumar — Managing Director

All right. Okay. Is it better?

Operator

Sir, it’s still breaking.

Sandeep Kumar — Managing Director

Hello?

Operator

Yes, sir. Please go ahead.

Sandeep Kumar — Managing Director

Yeah. So as I was mentioning, the ductile iron prices continue to be at the old numbers which what we booked in quarter 2 before [Technical Issues]. So that’s been the problem. And so, the raw material prices were up. Pig iron prices were up but not to the same extent and DI pipe prices have been more or less has seen only a marginal increase. So that’s [Technical Issues] top we had taken a shutdown of our — one of our blast furnaces, the larger one out 10 days. This was a planned maintenance shutdown. But when it came back, there have been problems in trying to stabilize, that’s kind of really hit us on the fuel rate and, therefore, on the cost structure.

So, on the whole, if I were to summarize, raw material cost push, operational performance of blast furnace down, pig iron delivery is lower that’s because of the availability, not because of the market, ductile iron pipe deliveries, finished goods prices have been higher, but not to the same extent as the cost push. That is what has squeezed our margins and that’s why you see a profit before tax of, let’s say, about INR50 crores this quarter and but [Technical Issues]

Operator

Sorry to interrupt you, sir. This is the operator, the audio is now breaking from your line, sir. Ladies and gentlemen, request you all to please stay connected while we check the line for Mr. Sandeep Kumar. Thank you.

Ladies and gentlemen, thank you for patiently waiting. The line for Mr. Sandeep Kumar has been reconnected. Thank you, and over to you, sir.

Sandeep Kumar — Managing Director

Yeah. Sorry, guys. So, my call is having a problem. Just coming back, I think where I left. So the summary is that, we’ve had a hit on [Technical Issues] and on the performance of blast furnace. The positives have been the increased deliveries of the ductile iron pipes and an increase in the prices as well of both pig iron and ductile iron pipe. But on the whole [Technical Issues] I think the operational performance [Technical Issues]. And as we start [Technical Issues] new prices of ductile iron pipes [Technical Issues]. So…

Operator

Mr. Kumar, sorry to interrupt you. The audio is now breaking.

Sandeep Kumar — Managing Director

Audio is breaking?

Operator

Yes, sir. The audio is breaking from your line, sir. Please check.

Sandeep Kumar — Managing Director

Oh because [Technical Issues]. Okay. So I am through with the summary. Let the questions be there. I will ask Subhra will [Technical Issues], whereas my voice is [Technical Issues] can interrupt me [Technical Issues].

Operator

Should we start for floor for Q&A?

Sandeep Kumar — Managing Director

We’ll get start with Q&A.

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah. I’ll try to [Speech Overlap].

Sandeep Kumar — Managing Director

Yeah. Are you — Subhra, are you finding the same problem on the — on my voice?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah. Sometimes it is getting cracked.

Sandeep Kumar — Managing Director

Wherever you find, and then you take over. Okay?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Sure. Sure.

Sandeep Kumar — Managing Director

Yeah. Let’s start the Q&A. I think today is a bad day.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] The first question is from the line of Mithun Aswath from Kivah Advisors. Please go ahead.

Mithun Aswath — Kivah Advisors — Analyst

Yeah. Good afternoon, sir. Sir, just wanted one question on — just wanted to understand how is your expansion of the ductile iron pipe facility happening? Is that on schedule?

Number two was also on the impending merger with Tata Steel Long Products, where are we on that? Any timelines for both of these? Thank you, sir.

Sandeep Kumar — Managing Director

Yeah. Thanks, Mithun. So, the first one was on the expansion. Expansion is on — in fact, we expect to complete the first phase by, let’s say, March. Okay? At least in phases we will be able to do. And March we should be able to do the first phase on. There are some issues especially because of the COVID third wave. But I think we should be able to surmount that. So by March end we should have it on, the first phase.

The second question on the merger. The merger process has been on but there have been delays because of the usual process, the regulatory clearances, the clarification sought by the regulator, so that has been taking time. And I really don’t know how long it will take, but it depends on the regulator and the kind of queries and responses we have. So we’ll have to wait and see how it kind of matures into how long it takes.

Mithun Aswath — Kivah Advisors — Analyst

Thank you.

Sandeep Kumar — Managing Director

Yeah. Okay. Thanks.

Operator

Thank you. [Operator Instructions] The next question is from the line of Rohan [Phonetic], Individual Investor. Please go ahead.

Rohan — — Analyst

[Technical Issues] some good set of numbers. Sir, I have two questions. The first…

Operator

Sorry to interrupt you, Rohan. Your audio is not clear from your line. Please use the handset mode.

Rohan — — Analyst

Is it clear now?

Operator

Yes. Please go ahead.

Rohan — — Analyst

Sir, two questions I had. First was on the coke part. And so, sir, you said that 30% of the coke is procured from the market. So is it only for this particular quarter or every time like — we purchase 30% coke from the market only, roughly 30%, 35%?

Sandeep Kumar — Managing Director

Yeah. So Rohan. I think I said 20%, not 30%. So roughly 80% of the coke is captive and balance 20% is from the market. And that’s an ongoing basis. It’s not only for this quarter but that’s the general requirement. So 20% sourced from the market.

Rohan — — Analyst

Okay, sir. And the second question was on DIP side, sir. Sir, Tata Metaliks is honoring its older contracts and you said that we are facing some very less margin or loss I’m assuming. So what percent of our sales go into this older contract, sir? And what impact they have on our EBITDA pattern?

Sandeep Kumar — Managing Director

So you can look at it, the EBITDA margin is typically for us — for ductile iron pipe have been upwards of 20%, if I look at look at it from raw material — in fact, 22%, 23%, 25%, while in this quarter it’s been much lower. It’s been close to 10%. So the impact on the EBITDA margin is huge. That’s because, as I mentioned, there has been a cost squeeze, also at the same time the prices of DI pipes have not gone up because we are honoring the old contracts. What percentage? Percentage will change from month-to-month and quarter-to-quarter but you can say roughly, let’s say, 70% would still be the old contracts.

Rohan — — Analyst

20% of our volume and these contracts are older than one year, sir, one year, six months?

Sandeep Kumar — Managing Director

Yeah, yeah, yeah. Typically, we — if you remember, we had made bookings of almost 15 months plus. And I think quarter three or quarter four I had mentioned that. So those old contracts are continuing and we are continuing to honor them, honor to — honor those contracts and that’s why you don’t find a bump up in the prices of ductile iron pipes and therefore, the margins of ductile iron pipe is subdued. But these will get sorted out in the next one or two quarters.

Rohan — — Analyst

Sir, one last follow-up question on this point, sir, then. Have we changed any policy that, are we now going for some shorter contracts instead of going for 12-month, 15-month contracts, given the recent price hike in raw material? Or are we still continuing with getting long-term 15-month contracts only?

Sandeep Kumar — Managing Director

No, no. So you see the EPC contractor typically has a project which has to be executed over a period of 12 to 18 months, even 24 months. So they expect that — our customers expect that we have a back-to-back contract with them and typically we have that. So it’s just that this was a massive movement. And it has kind of impacted us to some extent on the price side. We’ve had an advantage on the pig iron side but on the ductile iron pipe we’ve had a disadvantage. I would say we have lost — in some sense, you can say we have lost, only in another way it’s part of the game in an upcycle you lose, in a downcycle you gain, that’s why we say the ductile iron price market is much more stable because it doesn’t change every month. It’s more over a period of time. So it gives you stability. What we’ve also done is because of the ductile iron pipe prices being more long-term and over a period of time we’ve also hedged on the raw materials to some extent and that is why you will find, even though there is a cost push on raw materials this quarter, it would have been much worse had we not done that. So, to that extent it’s always you can always hedge to some extent on the raw materials.

Rohan — — Analyst

Sir, we hedge both iron ore and coking coal?

Sandeep Kumar — Managing Director

So mainly coking coal.

Rohan — — Analyst

Mainly coking coal?

Sandeep Kumar — Managing Director

We do — by hedging I mean that you kind of put your at prices, let’s say, fixed to your long-term sales contract rather than keep it open and then wait for months to month. So we do a combination and that has also — that has helped us. So, in fact, Subhra Sengupta is here, he can explain better. He also looks after the raw materials. Subhra, you want to come in and explain this a little better?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah. If you see what MD suggesting and saying that when we took the contract that time the coal price was too less, maybe $120 kind of thing. And we have bought for a period, let’s say, six to nine, six months and in some cases seven, eight months And that helped us even the coal — even in the Q3 when the coal has gone up to $400 we could use some of the old coals and we can make some — margin was there. What you are upsizing [Phonetic] that there are some cases we have also done the paper transactions about the hedge but that is very minuscule. But purely based on the physical delivery basis we have bought some additional [Phonetic] coal based on the contracts.

Sandeep Kumar — Managing Director

Right.

Rohan — — Analyst

Thank you very much, sir.

Sandeep Kumar — Managing Director

Right. Thanks.

Operator

Thank you. The next question is from the line of Bharat Sheth from Quest Investment Advisors. Please go ahead.

Bharat Sheth — Quest Investment Advisor Pvt. Ltd. — Analyst

Hi. Thank you for the opportunity, sir. Sir, to understand a little more on this pig iron, sir, one, the volume was decline is purely because of our supply side constraint or there was some dip in demand also, if you can give some color?

Sandeep Kumar — Managing Director

No, no. It’s mainly because of the hot metal availability. If you look at it, we have increased the ductile — see, whatever hot metal we produced, we tried to maximize the ductile iron pipe because we want to finish off with the old contracts. And that’s why you see a bump up in the DI pipe sales. From 52,000 last quarter to 67,000 tons in quarter 3.

Bharat Sheth — Quest Investment Advisor Pvt. Ltd. — Analyst

Okay.

Sandeep Kumar — Managing Director

And pig iron because the overall production of hot metal was lower, as I said the — one of the blast furnaces when it went for shut down, maintenance shut down and when it came back, it hasn’t performed well. There have been problems in stabilization. And that has continued till — for the entire month of December. And that is what has created the problem. Otherwise, we would have done much better. Both in terms of cost and in terms of higher volumes and therefore, more sales.

Bharat Sheth — Quest Investment Advisor Pvt. Ltd. — Analyst

Okay.

Sandeep Kumar — Managing Director

So that has eaten up quite a bit of margin. And so, it’s the [Technical Issues] performance which has hit us more, which is controllable and I think in quarter four we’ll get back. The market side we have not been hit that badly. Although, if we had also, let’s say, gone on and contracted afresh, short close the old contracts on DI pipes then we would have had a much better scene. But we stick to our customers, restrict — we like to be long-term and we don’t see that — we don’t play as a short-term game. And therefore, you find the margins of ductile iron pipes at a still lower level. And as I was mentioning maybe 10% EBITDA margins or whatever, while typically it is more than 20%. So this also will get sorted out over the next one or two quarters because now the new bookings that we have made or we have started making, those will become more, as a proportion, will start increasing. But that will take one or two quarters before it plays out.

Bharat Sheth — Quest Investment Advisor Pvt. Ltd. — Analyst

To understand a little more on the — now, what is I mean trend of this — one is a finished product you said that in October we were able to raise and since in December there was some dip. So on the finished product side and the coking coal and iron ore trend, if you can give what is current prevailing price and vis-a-vis average price of Q3?

Sandeep Kumar — Managing Director

Yeah. So let me start, let’s say, iron ore. Iron ore prices peaked in the month of June or July internationally, as well as in India because as international prices go up Indian iron ore players they start exporting. When the prices come down they don’t export, therefore, more availability in the domestic and prices come down.

Bharat Sheth — Quest Investment Advisor Pvt. Ltd. — Analyst

Correct.

Sandeep Kumar — Managing Director

So after June, July what has happened is, prices have started coming down. But typically the iron ore that we purchase we keep an inventory of, let’s say, two or three months.

Bharat Sheth — Quest Investment Advisor Pvt. Ltd. — Analyst

Okay.

Sandeep Kumar — Managing Director

So it start — it gets consumed over a period of time. So the inventory that we, let’s say, procured in quarter 2, the cost impact of that is playing into now in quarter 3, which now for quarter 4 we will not have that impact of iron ore, it will come down. So that is number one.

Number two is coal, coal peaked in the month of — in September, $400 plus. And then after that it started coming down but it didn’t come out — come down drastically, it came down to, let’s say, $320, $330. And then again now it has started moving up. Again, it has crossed $400 as of yesterday. But in between, let’s say, November and December as it came down, there has been some drop in the coal prices, which you will see a reflection of that in quarter 4. So iron ore coming down, coal coming down, but coal will be a mixed bag because October the prices are higher and July — September, October when it peaked, those coal also would have come. Fortunately, for us, we do not have too much of high cost coal, we did not buy at $400 and all because as I was saying, we had done some hedging. By hedging I don’t mean the paper hedging. What I mean is against the long-term DI pipes contract we had picked up coal because we knew the prices were going up so we just tried to procure more at prices linked to the our DI pipe prices. So that is what Subhra was trying to explain.

So, overall, though, quarter 4 we will see some hit of raw material, and it will also depend on how the prices play out during the quarter, we think it will be reasonable — there will be a reasonable increase and we now need to see how much of that really gets converted into finished goods. As of now if you ask me, the finished goods prices have started increasing. In fact, in the last 15 days we ourselves have increased the prices three times in the last 15 days in the — in Eastern markets. So we are seeing a bump up in pig iron prices. We are seeing a better proportion of newer orders of DI pipes now, which will start playing into the overall margins of the DI pipes. And we will see — but we will see a cost push on iron ore more on — less on iron ore, more on coal and coke because coke has also gone up. Coke which was, let’s say, INR39,000 is now up to about INR44,000, INR45,000 or even more. So coke — but we’ve — since our proportion of coke from the market is only 20%, so to that extent we will not be very badly affected but some impacts will be there. I don’t know whether I could explain to you but please feel free to ask.

Bharat Sheth — Quest Investment Advisor Pvt. Ltd. — Analyst

Yes, I know. And, sir, on this — what exactly is affecting this whole coal price business now? Is still Australia is not supplying or any color on that?

Sandeep Kumar — Managing Director

Yeah. So couple of reasons. One is that, if you look at it, China announced a curtailment in steel production in the second half of this year because of Beijing Olympics, Winter Olympics in February. Also, China is wanting to do move more to scrap-based production and lower emissions. So there — and the China story is a big one and I’m sure you guys would have read and understood it much better. So what has happened when China’s production come — came down in H2, the demand for raw materials came down and China being almost half of the world steel production, therefore, the impact on raw material we started seeing that and that’s why you see iron ore peaking in June, July and coming down, coal peaking in September and then coming down.

But as far as coal is concerned, while iron ore continues to be at a steady level now, at almost half the peak level, so in June it reached a level of $215 or $220. Today, it is at a level of, let’s say, $130 and it was at a level of $110, $115, let’s say, 15 days back or 20 days back. So there is some movement up on iron ore but not significant. But on coal, we have already again crossed $400, which we have reached in September. And the reason for coal going up is primarily two: one is in Australia, typically, this — these months are bad months. They have monsoons, they have cyclones, they have heavy — the bad weather hits them, the mining operations are disrupted, transportation is disrupted, and that is what is causing the problems on supply side. And now after February Olympics, Chinese may have started restocking or there is some indication, we are still not sure, but there is some indication of restocking. So there is a renewed demand while the supply side has been affected badly. Indonesia has banned exports of coal, although Indonesia is not a major player of coking coal but still. So you will find that overall the supply side is constrained. On the demand side, looks to be more positive and therefore, there is a movement up. But overall what it does is the market sentiment, whether it’s raw material or finished goods, prices going up is always good for everybody. So it is a positive sentiment in the market and we are seeing that demand reflected in the prices, as well as in an increased pull. So overall we are more optimistic than what we were, let’s say, one month back or one and a half months back.

Bharat Sheth — Quest Investment Advisor Pvt. Ltd. — Analyst

So apart from, sir, Australia, is there any alternate source of coking coal or if there — they are the largest source they will — it will work like this only?

Sandeep Kumar — Managing Director

So seaborne Australia, Canada and US, these three are the major players worldwide and seaborne coking coal. And there are a little bit Mozambique, Indonesia, Mongolia, of course, is landlocked, okay? But otherwise, primarily these three are the countries.

Bharat Sheth — Quest Investment Advisor Pvt. Ltd. — Analyst

Okay. And, sir, ductile iron you rightly said that within one or two quarter, again, with the renewal of — I mean, expiry of old contract, so if one has to — and a renewal of new contracts. So one has to look what is the delta between the current market price vis-a-vis old price? So how the price has moved without giving, I mean, specific what price we are doing?

Sandeep Kumar — Managing Director

So prices have moved up by almost 40% to 45% compared to last year in ductile iron pipe. So, let’s say, if the prices were about INR50,000 per ton last year, today, they are at INR70,000, INR75,000, so that gives you some sense.

Bharat Sheth — Quest Investment Advisor Pvt. Ltd. — Analyst

Okay. Thank you very much, sir, and all the best.

Sandeep Kumar — Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Vineet Maloo from Birla Sun Life Asset Management. Please go ahead.

Vineet Maloo — Birla Sun Life Asset Management Company Limited — Analyst

Hi. Good afternoon. Thank you for taking my question, sir. Sir, I just wanted to know how is our iron ore cost changed compared to Q2 and Q3?

Sandeep Kumar — Managing Director

Hi, Vineet. Thank you for joining in. I’ll request Subhra to answer. He looks after raw materials. So he will be in a better position to answer. Subhra, can you come in?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah. So Q2 versus Q3 iron ore was almost stable, maybe quarter-on-quarter we have spent INR6 crore, INR7 crore — INR6 crore extra. But quarter-on-quarter coal and coke has gone up substantially.

Vineet Maloo — Birla Sun Life Asset Management Company Limited — Analyst

Sure. Sir, I mean, unit cost of iron ore has remained similar as Q2 more or less?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

More or less similar maybe INR1,000 here and there, mainly on the lumps.

Vineet Maloo — Birla Sun Life Asset Management Company Limited — Analyst

Okay. And is it compared to Q3 now the current cost, let’s say, the incoming material that you’re getting, is it that favorable prices to us?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah. It will come down, but as we are carrying the inventory maybe for two, three months, the — it will come down gradually. So in the Q4 it will be lower than the Q3 and most likely Q1 next year would be lower than the Q4.

Vineet Maloo — Birla Sun Life Asset Management Company Limited — Analyst

Okay. Okay. And, sir, the effect of higher royalty was contained till Q2, right, which I can understand in Q3 there was usage effect.

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

No, no, no, no, no. Q2 and impact was almost INR47 crore, INR48 crore. Q3 is almost another similar number because again the same logic of the carry forward of inventory. But going forward, we are reducing the exposure on the high royalty kind of iron ore such as lumps, such as iron ore from the kanban mines. And compared to Q3 to Q4, royalty impact will come down further.

Vineet Maloo — Birla Sun Life Asset Management Company Limited — Analyst

Okay. So in Q4 then, sir, we’ll get two benefits: one is, obviously, on the price a little bit because the high cost inventory runs out. And the source of like the iron ore is also changing a little bit towards lower royalty ore, so we get dual benefits. Is that correct understanding?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah, correct understanding.

Sandeep Kumar — Managing Director

So, Vineet, you are absolutely right. If I can just come in, not only the prices come down, your royalty as a percentage also comes down as an absolute value because it’s a percentage so that comes down, plus we have consciously moved away from the high royalty iron ore and moved away so we have changed our basket. So overall the impact would be reduced. And we’ll be in a much better position to manage.

Vineet Maloo — Birla Sun Life Asset Management Company Limited — Analyst

Okay. Understood. And, sir, my last question is on — then again the mix of, let’s say, the low price contract versus the normal price contract, right? So when do we — at least that 50-50 mark when that the — like the normal price contracts are more than the low price contracts because of legacy?

Sandeep Kumar — Managing Director

So we’ll be able to tell you by end of quarter 4 where we stand and how much. But I think in a quarter or two we should start seeing a significant shift. We still are carrying, let’s say, our order books today is about nine to 10 months, and as a proportion I think we still will be having 60%, 70% would be the older contracts. So — but what happens is, even if you are carrying the older contracts, what gets executed in which quarter is often difficult to say because it depends a lot on clearances. And now, with the COVID, etc., which project side will be clear, I don’t know. UP was a major one. UP having elections. MP is another one. Also there is a rush to complete projects before March because the budget runs out. So you’ll suddenly find new orders which come in and they give us a bump. Okay? But what we have done is, we have honestly tried to fulfill all the orders of our customers and maybe stagger a bit, but there is a limit to that. But I think all this will get sorted out in a quarter or two so you’ll have to have patience with us for a quarter or two and after which I think we run a very good I think sprint after that. It’s just a question of one quarter or two quarters at most.

Vineet Maloo — Birla Sun Life Asset Management Company Limited — Analyst

Sure. Sure And, sorry, sir, one more question although I did say last question, one more question. Is that — so, sir, there is no rethink on the way we contract — or we enter into contract with these players, right? This is what we explained in response to another question?

Sandeep Kumar — Managing Director

Yeah, yeah, yeah. So, it is a long-term plan. [Speech Overlap] Yeah. We shouldn’t get carried away. See, I also had — I think mentioned to you, Vineet, in a separate conversation that if you are sticking to your customer and long-term you also get a preference and we also seek premiums over competition, saying that, look, if I am giving you reliability, then I must get something. Otherwise, why am I giving you that reliability. So it’s a long-term game, it’s not something which is clearly reflected in the quarterly results. But we would like to play the long-term game both from an ethical point of view and also from a perspective of I think long-term sustainability of our results.

Vineet Maloo — Birla Sun Life Asset Management Company Limited — Analyst

Sure. All right. Understood. Thank you so much.

Sandeep Kumar — Managing Director

Right. Vineet, thanks.

Operator

Thank you. The next question is from the line of Kunal Kothari from Centrum Broking Limited. Please go ahead. Mr. Kothari, your line is in talk mode, please go ahead with your question.

Kunal Kothari — Centrum Broking Limited — Analyst

Yeah. Thank you for the opportunity. Sir, I would like to know how much would be the coking coal inventory that we will be having and the quarter-on-quarter impact in quarter for the shift in cost per ton that we can expect?

Sandeep Kumar — Managing Director

Okay. Subhra, you want to respond to that?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah. For per ton of hot metal we expect that cost due to coal and coke will go up by almost INR3,000, INR3,500 or INR3,000 to INR4,000 per ton of hot metal. But as we expect that our furnace will do better and we will be able to use more PCI, which is at much lower cost. We’ll try our best to contain the increase.

Kunal Kothari — Centrum Broking Limited — Analyst

And [Technical Issues], sir, inventory [Technical Issues] we still carry?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

We carry a inventory of say, all put together maybe two, two and a half months. But that is a different types of coals we carry. We are carrying more of PCI coal and less of prime hard coking coal. So on a combination, on a weighted average, maybe it is two and a half months.

Kunal Kothari — Centrum Broking Limited — Analyst

Sir, it was [Technical Issues] your earlier question, we had [Technical Issues]

Operator

Sorry to interrupt you Mr. Kothari, the audio is not clear from your line. Please use the handset mode.

Kunal Kothari — Centrum Broking Limited — Analyst

Sir, am I audible? Hello?

Operator

Sir, we can hear some audio from your line, sir. It’s not clear.

Sandeep Kumar — Managing Director

There is some disturbance. Mr. Kothari, what you can do is, you can log out and login back.

Kunal Kothari — Centrum Broking Limited — Analyst

Yeah, sir, sure. Okay.

Operator

Thank you. The next question is from the line of Falguni Dutta from Jet Age Securities. Please go ahead.

Falguni Dutta — Jet Age Securities — Analyst

Hello? Sir, this INR47 crore that you mentioned, this was the impact of royalty — premium, right? The 150%…

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah, royalty. INR47 crore in — yeah, premium extra, additional royalty.

Falguni Dutta — Jet Age Securities — Analyst

Yeah. Additional royalty. And the other thing I wanted to know is the sales for a pig iron that you mentioned for the quarter. So what did — what would it be inclusive of the inter division transfer to the DI segment?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

No, no, no. So 75,000 is the sales to customer of itself [Phonetic].

Falguni Dutta — Jet Age Securities — Analyst

And inclusive of inter division?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

So we have produced, say, 65,000 of DI pipe. So similar quantity approximate.

Falguni Dutta — Jet Age Securities — Analyst

Okay. And, sir, what do you — can you just give some outlook on the DI pipe business as to, let’s say, for the next six months to a year in terms of pricing and demand-supply?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

I would request MD to answer.

Sandeep Kumar — Managing Director

Yeah. I’ll comment. So today, the order load for the industry today would be roughly 1.3 million tons and inquiries in the market is another 1.3 million tons, let’s say. So, total firm demand visible is, let’s say, about 2.6 million tons and there are projects for which inquiries have not yet been floated but projects have been announced or sanctioned is another 2.6 million tons, so that takes your number — 2.2 million tons, sorry, so that takes your number to 4.8 million tons. So there is a visibility of demand either firm or to be firmed up of about 4.8 million tons of DI pipes over the next two years.

The supply side, the installed capacity of the industry is roughly 2.6 million tons. The industry operates at the level of 80% capacity utilization, 80%, 85% whatever. So what we are saying is 2.2 million tons plus 2.2 million tons is 4.4 million tons. So in two years you have a supply of 4.4 million tons and you have a demand of 4.8 million tons, which is visible.

Now, this is not including some more projects which are going to come up which are being announced now. So overall the demand is pretty robust. We see a demand growth of double digits over the next five to seven years. In fact, optimistically it is even more but I am still looking at a 10%, 12% minimum demand growth CAGR over the next five to seven years.

If you look at prices, the prices are today at anywhere between INR70,000 to INR75,000 per ton depending on the product mix, which was about INR50,000, let’s say, a year back. The prices may stabilize a little bit if the raw material prices cool but generally the sentiment is now again positive and therefore, the prices may remain or may remain range bound, let’s say. So, overall, the DI pipe business seems to be absolutely in a gung-ho mode with limited supplies and demand actually exceeding supplies by a large margin. And this is not for one or two years. We are seeing this over the next five to seven years, unless the government changes its policy or has no funds to invest, then it’s a different matter.

Falguni Dutta — Jet Age Securities — Analyst

Okay.

Sandeep Kumar — Managing Director

So that’s where the overall story is on the DI pipe demand and supply. Does it give you…

Falguni Dutta — Jet Age Securities — Analyst

[Speech Overlap] point helpful.

Sandeep Kumar — Managing Director

Yeah. Okay.

Falguni Dutta — Jet Age Securities — Analyst

And, sir, just one last question on that, how much do we expect to do in FY ’23 in terms of DI pipe and pig iron?

Sandeep Kumar — Managing Director

So our capacity of hot metal roughly is between, let’s say, 5.5 lakh tons to 6 lakh tons. And that’s the production we envisage depending on shut down, this that that’s why I’m not giving the exact number because there are some shutdowns which happen and which may be planned next year also, so we’ll need to work that out in our annual business plan, based on that exact. Now, out of that, we were having a nominal capacity of, let’s say, 2 lakh tons of DI pipes. This will increase by 1 lakh ton in FY ’23 so that becomes, let’s say, 3 lakh tons.

Falguni Dutta — Jet Age Securities — Analyst

Okay.

Sandeep Kumar — Managing Director

Because we are doing the expansion in two phases: the first phase will get commissioned by, say, March. So when we say commissioned by March, not everything will start in March. Some of it will start in March. There are some approval, so it may go into April, May. So exact number is difficult to say but, let’s say, on a rough thumb rule basis, say, 50% will come in next year and the balance 50% will come in FY ’24.

Falguni Dutta — Jet Age Securities — Analyst

Okay.

Sandeep Kumar — Managing Director

So 2 lakh tons DI pipe becomes 3 lakh tons, if, let’s say, we have 5.5 lakh tons of hot metal, then you can subtract 3 lakhs from there, that makes it 2.5 lakh tons of hot metal. But you also have to do a few other things. I am not trying to confuse you, but there are yields and there are other things so the number will be not exactly the same but just for a very broad understanding you can take this as a material balance, 5.5 lakh tons of hot metal, 3 lakh tons of DI pipes and 2.5 lakh tons of pig iron, very, very broad.

Falguni Dutta — Jet Age Securities — Analyst

Okay. Thank you, sir. That’s quite helpful. Yeah. Thank you so much.

Sandeep Kumar — Managing Director

Right, right. Okay. Thank you.

Operator

Thank you. The next question is from the line of Yogansh Jeswani from Mittal Analytics. Please go ahead.

Yogansh Jeswani — Mittal Analytics Private Limited — Analyst

Hi, sir. Thanks for the opportunity. Couple of my questions have already been answered. So I’ll just go for a few follow-ups that I have. So you mentioned the order book for eight to nine months, right?

Sandeep Kumar — Managing Director

Nine to 10 months, yeah. No problem.

Yogansh Jeswani — Mittal Analytics Private Limited — Analyst

Nine to 10 months. So, sir, I think if I recall correctly from our last concall interactions, I think last year somewhere around the same time the order book was again something like eight to nine months and before that as well also I think nine to 10 months of order book visibility, while throughout these years we have been very positive about the industry prospects. So, is it fair to assume given the kind of situation we are in, the demand that we are seeing is still not as per our expectation and you expect things to improve?

Sandeep Kumar — Managing Director

So last year around this time I think the order books was more. I think we went up to between 15 to 16 months, if my memory serves me right. And I think in January we had something like 15, 16 months. But as the prices have started to rise, we have been very choosy in picking up orders over the last nine to 12 months, nine months, in particular, and that’s why you see it has come down back to nine to 10 months. In general, anywhere between nine to 12 months is a reasonable order load to have. If you have more than that you should be happy. If you have less than that then that’s a cause for worry. But — so that’s a general statement.

As far as industry is concerned, I think there is a bit of a resistance right now from the customers to, let’s say, contract. They were waiting for prices to fall. But as the market prices have started increasing again over the last two to three weeks I think we will now see a rush to close the contracts. And that might improve the order books of the industry as a whole and for us also, that’s what is my anticipation because November and December the prices started falling, so many of them were waiting for the prices to fall and the sentiment to come down to negotiate better and also the fact that they have contracted projects at, let’s say, older prices. So it’s not also viable for many of them to really pick up ductile iron pipe at a price which is 40% to 50% higher. So that’s also been a concern for them. But now I don’t think many of them will have an option, they will have to do because when you take up projects you lose some, you gain some.

Yogansh Jeswani — Mittal Analytics Private Limited — Analyst

Right, right. I think that has been the case in our case as well that our old order books which were supplying at a higher RM, so that is squeezing off some margin so I think EPC contractors are now in the same place. So, sir, based on that the way we have supported our EPC customers we haven’t increased the prices, so do you think with now RM prices strengthening and DIP price is strengthening, in couple of years — not couple of years a couple of quarters when the RM prices are down will we be able to hold on to this delta margin that we might get? Or do you think in this case the contractors might come back and, say, to you [Speech Overlap] given the overall industry, sir, I think the competition is still very intensive. Couple of players still under pressure in terms of balance sheet so they might be a bit aggressive and letting go of some delta margins just to stay afloat, so hence stay on a long-term.

Sandeep Kumar — Managing Director

Yeah, yeah. Correct, correct. No, no. So that risk is always there. I think that’s there in any industry and also in our industry. But typically what happens is that, the customers also know whom to contract with and especially when the markets are not very sure, people would like to contract with people with suppliers who are more reliable, more long-term. So I think we have an edge there. But there will be a few here and there who will try and cut corners and try to negotiate, renegotiate like the suppliers, many of the suppliers have done. So I think it’s a fair game with all kinds of people and I think we should stick to our principles and do what is right. And that’s what we have been trying to do. In the process we will get hit sometimes but in the long run we will gain, that’s the policy and the philosophy that we have and I think we are doing well. And as you can see very clearly from the levers, I think the — it’s a very optimistic scenario going forward over the next five to seven years I don’t think the market has really captured this but it’s really a fantastic opportunity in the water infrastructure sector and not many players can come in, it’s not like making rebars or the small players who come in suddenly and start making — you can’t do that. It’s a tough one, it’s a complex one and not everybody can come in. It’s got high entry barriers both in the marketplace, as well as in the operations. So therefore, the incumbent players like us have a very serious advantage and I’m sure that will show up in the results over the coming years.

Yogansh Jeswani — Mittal Analytics Private Limited — Analyst

Absolutely, I think I’ve been in steel and tracking this for a very long time now and I really appreciate the way we have worked on our cost efficiencies, bringing in I think a lot of efforts which you have been very helpful. And sir, just on an answer to a previous question you had mentioned that in DI pipes we are expecting that 20% kind of margins can be done when things are good. But just by looking at last four, five years of quarterly numbers in terms of EBITDA, I think hardly twice or thrice we have surpassed 20% kind of EBITDA margins, while the broader range has been between 9% to 13%, 14%. So what gives you confidence for the 20% plus kind of margins when the last four, five years history hasn’t so and so?

Sandeep Kumar — Managing Director

No actually you are looking at the wrong number, that’s why — what you are looking at is the transfer — the margin on the basis of transfer price. Actually all other players, our competition, they calculate their EBITDA margins from raw material, while we do on a transfer price basis. So part of the benefit goes into pig iron. If you look at purely ductile iron pipe then the margins have been consistently above 20%, in fact, higher than 20%. It’s more like 22% to 25%. Okay? This quarter has been different as I explained to you because of the various reasons. So it’s not a question of confidence. We have always performed like that. If you look at the quarterly margin, EBITDA margin of ductile iron pipe, after removing the transfer price you will see the numbers very positively between 22% to 25% on a very consistent basis.

Subhra, you want to explain this better?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah.

Sandeep Kumar — Managing Director

Subhra?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah. I’ll do. So, in our system we treat both PI and pig iron and ductile iron pipe are two independent profit center and PI division sales hot metal to DIP. So based on the market price is some numbers. Therefore, while you see the independent DI margin, it will look less. But if you do iron ore to DIP, all along, I think last three years on to the extent DIP is concerned, we have done 20%, 20%-plus maybe sometimes 26%, 27% also. This quarter also if you see, that is internal number not published that iron ore to DIP is almost 15.6% or almost 16%, maybe after long quarter we are below 20%. So, what we plan and maybe down the line when majority of the — our hot metal will go for the DIP, this anomaly in any case will get nullified. But nevertheless, anytime if you want a more detail or specific iron ore to DIP margin, we can — for the earlier quarters we can have some detailed discussion on that separately.

Operator

Thank you. Mr. Jeswani, may we request that you return to the question queue for follow-up questions. Thank you. [Operator Instructions] The next question is from the line of Saket Kapoor from Kapoor and Company. Please go ahead.

Saket Kapoor — Kapoor and Company — Analyst

Yeah. [Foreign Speech], sir, and thank you for the opportunity.

Sandeep Kumar — Managing Director

[Foreign Speech], Saket.

Saket Kapoor — Kapoor and Company — Analyst

Yeah, sir. Sir, firstly, sir, on this part of, sir, the pig iron prices, which you have told that we have taken three hikes. So what was the exit for the December quarter? And how have the prices moved up currently, sir, if you could give some more color?

Sandeep Kumar — Managing Director

So the prices of pig iron has fluctuated but in a range. In general, you can take the prices have moved between, let’s say, INR44,000 to INR47,000 per ton depending on market, market-to-market and month-to-month or rather week-to-week. In the last 15 days, the prices have moved up by more than INR2,000. Subhra, what will be the number INR2,000, INR2,500 increase?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah. Yes, sir.

Sandeep Kumar — Managing Director

Yeah. So it has been in a range bound play between INR44,000 to let’s say, INR47,000, INR48,000 and now again like, let’s say, in Eastern markets it’s more than INR48,000 today, and North it will be closer to INR46,000, West will be again between INR46,000 plus. So today, the market prices are between INR46,000 to INR48,000 let’s say, which was, let’s say, INR44,000 to or around that in, say, middle of December or third week of December. So prices have just started moving up again.

Saket Kapoor — Kapoor and Company — Analyst

And if we take the averages, sir, for the last quarter what was the average [Speech Overlap] December quarter?

Sandeep Kumar — Managing Director

Average for December quarter for us would be, let’s say, for the foundry grade I’m talking about the main grade, the prime grade that we sell would be, let’s say, INR44,500 to INR45,000, INR44,500 you can take. Subhra, can you give the number — exact number?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah. Foundry grade similar number, but if we took quoted [Phonetic] average and net realization it will be tad below INR43,000, INR42,000.

Sandeep Kumar — Managing Director

So don’t confuse them with net realization. Stick to one number, which is the landed market price, then otherwise, they will all get confused [Speech Overlap].

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

[Speech Overlap] number is perfect. Number is correct.

Sandeep Kumar — Managing Director

Yeah. Because DI pipes also I’m talking about the land rate price.

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah, yeah, yeah. True, true. The number is correct.

Saket Kapoor — Kapoor and Company — Analyst

Subhra, if we take this one-off item about this royalty part of INR48 crore, INR47 crore for the last [Speech Overlap]. Hello?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah. Approximate INR50 crore for Q3.

Saket Kapoor — Kapoor and Company — Analyst

Okay. INR50 crore for Q3. So what is going to change now going forward? And sir, out of this INR50 crore what was the pass-on or was it totally borne by us in the finish part? And one question to what, sir, has told earlier Kumar-ji, what — sir, key reason, sir, for this increase in pig iron prices were the dull market and the stimulation in the market that has happened or any raw material input push that has [Speech Overlap]

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

This is a cost push. If you see today market price of coke is INR45,000 ex plant. This means landed dry would be INR47,000 kind of thing.

Saket Kapoor — Kapoor and Company — Analyst

Okay.

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

If the pig iron prices does not go up, some of the shops will get closed because if you see that on the total cost thing, the highest cost is the cost of fuel.

Saket Kapoor — Kapoor and Company — Analyst

Right, sir.

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

So pig iron price has to go up or the coal price has to come down. Otherwise, it is not the question of survival.

Saket Kapoor — Kapoor and Company — Analyst

Right. So this will not be margin accretive, sir? This is not going to be margin accretive, this is only be passed on number, whatever the rise has come — it is not going to improve the margin?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah. To some — to large extent, but depends. They’re based on the efficiency and all.

Saket Kapoor — Kapoor and Company — Analyst

Okay.

Sandeep Kumar — Managing Director

No, no. Also, depends on, Saket, on what percentage of your coke is captive. Let’s say for us 80% is captive, so the hit on us is not — we’re not going to be — our coke cost is not going to be INR45,000, INR47,000. What Subhra is saying is about the market. There are players who buy 100% from the market. They are badly impacted. But for people who have captive coke, they are not so badly impacted. So it’s that way.

Saket Kapoor — Kapoor and Company — Analyst

And about this one-off item, sir, if you could answer? And one more follow-up I have and then I will conclude. Yeah. About the one-off item, sir, you were explaining?

Sandeep Kumar — Managing Director

What is that one-off item?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

One-off item, royalty is not a one-off, it will continue, but the impact will come down going forward because the — one is the prices are coming down. Second is that, our basket is also changing. We are reducing exposure to lump. We have reduced exposure to kanban fines which are high royalty. So H1, H2 the impact of royalty, going forward it will come down substantial.

Saket Kapoor — Kapoor and Company — Analyst

Okay. Sir, can you quantify for a — or a ballpark number, sir, how should it shape up?

Sandeep Kumar — Managing Director

I think let me just explain this. Saket, if I were to explain to you more as a percentage, then if we were saying, if high royalty source of iron ore, if — last quarter was, let’s say, 67%, then today — let’s say, 70%, then today it would reduce to, let’s say, 40% or so. So the low-cost iron ore from a royalty perspective has gone up from or will go up, let’s say, from 25%, 30% to, let’s say, 50%, 60%. Subhra, this ballpark, tell me is that right?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Yeah, yeah, it’s correct.

Saket Kapoor — Kapoor and Company — Analyst

And, Sandeep, sir, if you look at what the commentary has been over the quarters wherein you — the Tata Metaliks management have been very bullish on DI pipes going forward and also the expansion now kicking up in phases and also the realization going up. Sir, what is the currently the aspiration for us to be there in this DIP segment, sir? Earlier this merger was — when earlier we used to discuss it the Tata Steel did — had not come up with this plan of merging into Long Product and creating one single entity. So how does our plan going ahead in terms of our market shares in DIP going forward, sir? Because I think so there have been two, three M&A activity also if I may term that has gone through and somehow we have not found attraction in them and maybe the asset or maybe the prices, whether it is Sathavahana, whether it is VLS or whether it is even if I may quote ISMT how much it would have gelled to us. So we are taking the greenfield route completely if our actions are to be seen. So going forward what is going to be the aspiration in DIP segment? What kind of player are we going to emerge? Now also when M&A activity has happened with Electrosteel and Sri Pipes getting merged and they’re being the largest player today. So where are we heading, sir, say — and when we are seeing such a blue screen — blue sky opportunity going forward in terms of demand. So what is the thought process now, sir?

Sandeep Kumar — Managing Director

So I think one of the, let’s say, numbers which have been floated around and I think has been mentioned even by our parent Tata Steel is that, we would like to be 1 million ton DIP player. And we have this vision in our mind that we need to achieve this 1 million ton as soon as possible. We would be, I’d say, 0.5 million tons production by FY ’24, 4 lakh tons capacity but with the production — ability to produce up to 5 lakhs, let’s say, 4.5 lakhs to 5 lakhs. So we need to either acquire or grow at some place or the other for another 5 lakhs which is not such an insurmountable task. Our cash flows are very good. In fact, the real picture has not yet emerged. Last two years have been COVID years and the government, the way it is going for water infrastructure, it’s an amazing I think run that we are all foreseeing.

I make this a point to explain to our investors and shareholders whenever I meet them on an individual basis or wherever is that, look, you need to understand this is a very different business, people can’t get in so easily and if people who come in they struggle for years before they establish themselves. It is not like making somebody putting up a steel pipe or a polymer pipe you buy HR coils and put it up. It’s easy to do that. Here, it’s very highly complicated and you can see that, that’s why you find players struggling, even established players. There’s only a few players, let’s say, three, four of us who consistently make money because it’s a high entry barrier on the technical side, as well as on the market side. So the DIP business is I think in for a major boom. The — it’s a huge positive because the government is investing the way it is investing and therefore, there is really no problem from a — for an established player. In fact, it’s an opportunity and a great opportunity for us. If we can’t capitalize on this, then it’s our I think incompetence that we could not do it.

On the market side, it’s a great one. Positioning side, it’s a great one. I don’t know whether I could answer your question, Saket? Did I miss out something?

Saket Kapoor — Kapoor and Company — Analyst

The point that 1 million is the target going ahead on the top of this 4.4 million tons currently. This market is going to — and the growth we are expecting, sir, is in double digits. So two years or three years down the line, sir, what is the capacity addition that we are envisaging?

And lastly, sir, also on the pig iron part, sir, earlier — last quarter I think some — in — for the September quarter we have exported also and the realizations were better. So what portion of current quarter pig iron sales have attributed to the export segment?

Sandeep Kumar — Managing Director

So the volume of 1 million tons is an ambition, is an aspiration right now. Once we have our Board approvals and everything is in place then we will inform you. It’s not fair for me to tell you by when, when, etc., etc. Those details have to be first gone through the Board and cleared and then only I can tell you.

As far as exports are concerned, Subhra, on pig iron, do you recall the number what percentage was it in exports?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

See, this quarter pig iron rate is hardly, maybe not more than 5%. Last quarter it was higher because we did one bulk segment to — a bulk segment of around 20,000.

Operator

Thank you.

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

This quarter is hardly.

Operator

Thank you. Mr. Kapoor, may we request that you return to the question for follow-up questions.

The next question is from the line of Mukesh Gupta [Phonetic], Individual Investor. Please go ahead.

Mukesh Gupta — — Analyst

Hello?

Sandeep Kumar — Managing Director

Yeah.

Mukesh Gupta — — Analyst

Hello? [Foreign Speech] Relationship Manager. Pawan-ji? Hello?

Sandeep Kumar — Managing Director

Pawan, maybe on a listening mode because he has joined late. So he is on listening mode. If you have got any question relating to Pawan, you can flag here, we’ll get it answered.

Mukesh Gupta — — Analyst

[Foreign Speech]

Sandeep Kumar — Managing Director

[Foreign Speech]

Mukesh Gupta — — Analyst

[Foreign Speech]

Sandeep Kumar — Managing Director

[Foreign Speech]

Mukesh Gupta — — Analyst

[Foreign Speech]

Sandeep Kumar — Managing Director

[Foreign Speech]

Mukesh Gupta — — Analyst

[Foreign Speech]

Sandeep Kumar — Managing Director

[Foreign Speech]

Mukesh Gupta — — Analyst

[Foreign Speech]

Sandeep Kumar — Managing Director

[Foreign Speech]

Mukesh Gupta — — Analyst

[Foreign Speech]

Sandeep Kumar — Managing Director

[Foreign Speech] or we’ll try and get answers to that.

Mukesh Gupta — — Analyst

Definitely. [Foreign Speech]

Sandeep Kumar — Managing Director

[Foreign Speech]

Mukesh Gupta — — Analyst

Thank you very much.

Sandeep Kumar — Managing Director

Okay. Thank you.

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.

Sahil Sanghvi — Investor Relations, Monarch Networth Capital Limited

Yeah. Thank you, Faizan. We want to thank the management for patiently answering all the questions. On behalf of Monarch Networth, we also want to thank all the participants for being on the call. Sandeep sir, do you want to give any closing comments?

Sandeep Kumar — Managing Director

Not really. I think we have answered a variety of questions. So they have got a hang of what — but despite this my only point to the investors is and I heard Mukesh is saying not getting responses, at least from — if there are any questions, anything if people want to meet us separately also, we are more than open. Okay? If there is enough meat in what you want to know, we are absolutely open to answer all your questions. We try to do it honestly and transparently, to the extent that is practical. So that’s the only point I will say. And we’ll continue to do so. Sorry if we have missed out on any particular answer, like for example, I know on the merger there is a lack of — we don’t have full clarity on this, because it’s not fully with us. It’s a regulatory part. So we will — hopefully, we’ll get some more clarity over the next couple of months. Thank you.

Sahil, over to you.

Sahil Sanghvi — Investor Relations, Monarch Networth Capital Limited

Thank you, sir. Yeah. Thank you, sir.

Operator

Thank you.

Sandeep Kumar — Managing Director

So we will log off, right?

Subhra Sengupta — Chief Financial Officer and Eithics Counsellor

Thank you.

Sandeep Kumar — Managing Director

Thank you, Subhra. Thanks. Bye-bye. Thanks, Sahil.

Operator

Thank you. Ladies and gentlemen, on behalf of Monarch Networth Capital Limited, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.