Vardhman Special Steels Limited (NSE: VSSL) Q1 2026 Earnings Call dated Jul. 28, 2025
Corporate Participants:
Sachit Jain — Vice Chairman and Managing Director
Sanjeev Singla — Chief Financial Officer
Analysts:
Yash Upadhyay — Analyst
Unidentified Participant
Radha — Analyst
Ritwik Sheth — Analyst
Rudraksh Gupta — Analyst
Vaibhav Gupta — Analyst
Saket — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Vardaman Special Steeds Q1FY26 Earnings Conference Call hosted by IIFL Capital Services Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Yashupatya. Thank you. And over to you sir.
Yash Upadhyay — Analyst
Thank you. Good afternoon everyone. On behalf of IFL Capital Services Limited, welcome to the Q1FY26 post earning conference call of Birdiman Specialty Limited. I also take this opportunity to welcome the senior management team on today’s call. We have with us Mr. Sachid. Then. Vice Chairman and Managing Director Mr. Sanjeev Singla, CFO Mr. R.K. revari, Executive Director and Ms. Soumya Jain, Executive Director. Now I hand over to the management for their opening remarks which will then be followed by a Q and A session. Over to you sir.
Sachit Jain — Vice Chairman and Managing Director
Thank you so much, ladies and gentlemen. Good afternoon and thank you for coming to our conference call. Last quarter has been good and slightly tough on good. There are volumes are intact in terms of our targets and we’ve also implemented our Cox Block very well. That is getting stabilized. In fact it from day one we did not lose any material because of any bad quality or anything. So it stabilized much faster than was anticipated. So that went well.
On the margin front there is a pressure because there is pressure big players from the outside and therefore price cutting continues. And as a result our margins are at the lower end of our EBITDA. We are at about 7,000 rupees EBITDA per tonne for this quarter. Also raw metal prices are at a declining trend and therefore there’s a valuation inventory valuation loss of roughly 6 crores. So with that actually the margins are slightly.
Actual margins are slightly better than what appears in the numbers on capex. As I said, the Cox Block successfully commissioned new heating furnace is in progress. It should get commissioned in the last quarter of this year. The solar plant is in the last stages. It should have got commissioned by the June quarter.
But there is a small court case which has come in for some of the line which may delay this project and it should come up should be cleared by August. But that is still in progress. And the new entity line is in progress on the Greenfield steel plant. I’m very happy to report that our partners Aichi and the Vardaman team have started working together. RFQs for the equipment is going to go out this week and land purchase is in progress. And we hope to commission this plant in July 29 as per an aggressive schedule as we had put forward for this. IG has already quoted. In equity, 385 crore rupees have come in from Aichi with which their equity stake has gone up to 24.9. So this has gone in a significant vote of confidence in the company. As the need of funds comes up later, there will be further fund infusion in the form of equity which could come from either Aichi or Vardaman Group or a QIP or a combination of the three. And then there’ll be a loan component which will be taken from one of the commercial banks. We intend to be conservative in the balance sheet and even at the peak we will be targeting a debt equity about 0.51 because it’s important to be conservative while the plant is getting commissioned. Once the plant is commissioned then you have more flexibility in the financial structures. This capital that has come in has gone largely to repay all our debt. And so we have become a debt free company now. And remaining is NFT which will be used as and when we need funds for our categories. We also have a very important update which happened in the previous board in the just concluded board meeting. As most of you know, our partners Iqiyi are one of the world’s leaders in forging and in the area of specialized forging for automotive, they are perhaps the world’s number one company. And after years of studying the Indian market, they finally decided to enter India. Of course it will be through VSS and we are looking for a specialized product where there is hardly any competition in India. And that line is being discussed together between our teams. And our target is that it should come up almost at the same time as the new steel plant comes up. Maybe a little before, maybe a little after the detailed project cost. The detailed thing will be finalized in the next six months. But as at this time, at this point of time, I think it suffices that this kind of the new line of business, the forward integration is going to start and we believe this is going to be a major business going ahead in the future so that. All from me at this point in the opening remarks. Mr. Singla will carry on with the financials and then we can have the Q and A. Thank you.
Sanjeev Singla — Chief Financial Officer
Thank you sir. On the financial side, first quarter compared to the first quarter of last year this quarter we have achieved a total volume of 55,500 tons of sales which is higher by about 10% of last year. And revenue from operations is 433 crores higher by 5%. Some mitigated because of the decline in prices happened in the last year. And this quarter also a beta per ton is at 39 crores lower by 18% primarily because of two reasons.
At Jansar has already explained that this quarter we have inventory valuation loss of about 6 crores. That is one and second last year our production was for the full quarter. Whereas in this quarter there is a shutdown of 10 to 12 days because of box and last year the fixed cost allocation was on a larger quantity. As a result a beta per ton for the quarter is 7,077. Still well within the range stated range but at the lower end as a result our PAT stands at 20 crores as against 26 crores in the corresponding quarter.
So that’s all on the financials and I now invite the questions. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question we press char and one on the touchstone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants who wish to ask Questions may press star and 1 Now the first question is from the line of Anil Kumar Sharma Anitiv said investor. Please go ahead.
Unidentified Participant
Good afternoon and I congratulate good number in a tough situation. Sir, I have one query regarding this coming extension. As you mentioned sir, when we think it will be complete 29 it will be started and when you think it will be completed Full benefit when can be started and what you expect? The return on capital employed as you have always stressed for a 20% plus return on capital. What do you think on those lines and what is the forcing?
Unidentified Participant
How much? Any estimate on the foraging plant that will be separate from this greenfield project? I think
Sachit Jain
Yes. So the new plant we expect it to start by July 29 and full capacity utilization because approvals will all take time again every plant will have to be approved again but again thanks to Aichi and their technical prowess our approval process should not take as long as a normal new steel plant would take. And so we expect in between two to three years plant should reach to full utilization that will be our target. So full benefits I would say in three years time is what we will target and return on capital employed we will once the plant is fully commissioned and fully utilized should be around the same figure that we have always said between around 20% EBITDA on capital employed company as a whole and again we’ll be targeting towards 20. We will reach we will hit 20% hopefully by then and then our target will be to go back up to 25%
Unidentified Participant
Thank you Susan. I have one more question
Sachit Jain
Regarding the forging Forging CAPEX will be in addition to the CAPEX already announced details and all as of now as I said in six months time all planning details and all will come up over the next six months and then we’ll have more details to share what approximate timelines, revenue, expected investment, all those things we should be able to share in about six months time. Roughly six months time.
Unidentified Participant
Thank you sir, one more question regarding this current ongoing
Sachit Jain
Can you come back? Can you come back once? We’ll be happy to answer your question after that.
Operator
Thank you. The next question is from the line of Raja from BNK securities. Please go ahead.
Radha
Hello sir. Thank you for the opportunity sir, in your opening remarks you mentioned about pricing pressure bring witness on account of some larger competitors. So please give some more highlights in terms of what is the total supply and demand of our products in India today and which are a few competitors who are creating such prices.
Sachit Jain
I think this is a detailed kind of market research kind of answer. Please send us a mail and we will answer that separately but the main as you can see that our sales. Sales have already increased, so we are able to maintain our sales as per our targets. And I’ll be happy to announce also that we have entered into some pricing formula with some of the key OE’s after which we will be now safe from the pricing pressure because of any other large companies desire to undercut prices.
Radha
Actually, I was asking because until the new plant is going to get commissioned, so we can. We can expect about 5 to 10% volume growth. And given the price correction that is happening, what kind of volume?
Sachit Jain
No, we have already announced that our target before the new plant is getting commissioned, our attempt will be to reach 260 to 270,000 tons of sales from the last year’s 215,000 tons here. So from 215 we’ll go up to 265 to 270 in the next four years.
Radha
Less on the volume trend. But considering the pricing scenario, any highlights on how do you find this scenario?
Sachit Jain
Depends on raw material prices. Pricing scenario depends on raw material prices. Raw material prices fall further, then prices also fall. And if raw material prices rise, then prices will rise. So we do not. That is why we talk about volume. We do not make predictions on sales and we talk of EBITDA on ton. And there are three, four factors which will increase the EBITDA per ton from next year. One is our solar plant, which should have kicked in by June, but we start getting the benefit partly in second quarter and then second half and full performance of that next year.
That is one factor. The second factor will be with the new reheating furnace getting commissioned, the material we send for job work outside will all be done in house. Not all, pardon me, largely done in house. And therefore a large part of that cost will get saved. And the third part is with the new reheating furnace, our billet size is going to increase and hence the yields are going to improve. And the fourth benefit is as volumes increase.
There are other hidden costs which include power cost reduction, yield improvement. Other things happen with increased volume. So. And there’s a benefit of the Cox Block coming in because Cox Block still, till they get the final approval from customers, the full benefit of the Cox Block is going to come in only in the next year. Those are the four factors which will lead to benefit. Better margins from coming up from next year. As you all would recall, our new rating furnace was originally expected to come up by June, but because of delay in the equipment supply and other factors. So this is going to delay by about six months.
Radha
Sir, actually, all the margin improvement measures that we have mentioned.
Sachit Jain
Can you come back in the queue, please
Radha
And thank you.
Sachit Jain
Thank you so much.
Operator
Thank you. Before we take the next question, we would like to remind participants that you may press Star and one to ask a question. The next question is from the line of Ritvik Sheth from one of Financial Consultants Private Limited. Please go ahead.
Ritwik Sheth
Hi, good afternoon, sir. So just following from the previous question, should we, you know, partly assume that the pricing pressure is behind? Because you mentioned that we have taken a pricing formula with certain OEMs, so. And we do not expect further price cut. So. So this pricing pressure should be the worst in Q1 and things would abate going forward. Would that be a reasonable assumption?
Sachit Jain
So let me put this way, it will not get worse than this.
Ritwik Sheth
Okay.
Sachit Jain
Will it get better? When will it get better? Very difficult to say at this point in time, but couple of factors which are, I would say tailwinds in our favor. One is this area of green steel sustainability, carbon footprint. More and more customers are talking about it and we feel in the next year or two, this could start translating into even more business coming our way, which means as you get to choose to a better product mix, a customer mix, and therefore the possibility of margin improving on that front.
The second thing is this concept of circular economy, which is the scrap coming in from the OE comes to the auto, comes to the steel company, steel made by us, go to tier ones or tier 2s of the auto companies. So with this, this concept, which is getting gradually more and again more and more people talking about this and 1oe has started moving on a concrete plan hit somewhere in the next six months they want to test this concept and then increase this concept. What this will give us is sustained business protection of business and hence protection of margins also as we go along. So this is something. Which we’ve been banking on. And with this and we are the company best, by far the best suited amongst the auto approved companies though there is one company, Saraloha Steel of Kalyani Group which is a private company which is ahead of us in this journey of green. But we would be the second best placed company the country and by far at this point in time none of our competitors come anywhere near us in this area of green and carbon footprint. So the day this becomes law as the government intends to do we will stand to have a major advantage and there’ll be a major pressure on us to supply more quantities and therefore possibility for us to drop the less profitable products and improve our margin mix.
Ritwik Sheth
And sir, any sense. What could be the green steel EBITDA per ton margin versus current what we are selling right now is 7 to 10,000. What could
Sachit Jain
We are anyway selling? We are anyway selling green steel. For us it is green steel. The question only is once there is a pull in the market there are products that can be dropped. From the current product mix. We feel easily 1000 to 2000 rupee. We don’t know where but 1000 to 2000 rupee increase in ebitda per ton is a possibility. Whether we’ll get there or not, I don’t know. It’ll happen in two years time, one year’s time, three years time. All difficult to predict. But this is the tailwind. So at the point is if it’s when the change happens, it’s in our favor. We have not taken this into our forecast. Anyway.
Ritwik Sheth
Got it. And so one more question on the forging Capex. So it will be in the new plant that we are acquiring.
Sachit Jain
We are trying to see if we can put it in the existing plant. Fact all that, the next six months please. Okay. The forging. We don’t have more information at this point in time. But this is under discussion. But we are examining if at least one line of forging, the first line, the pilot plant can come up in the existing plant.
Ritwik Sheth
Okay. And so just one more question. You mentioned that.
Sachit Jain
Can you come back in the queue please?
Ritwik Sheth
Sure.
Sachit Jain
Can you come back in the queue please?
Ritwik Sheth
Sure. Sure. Okay. Thank you.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference please limit your questions to two per participant. The next question is from the line of Rudraksh Gupta from Navneet Investment Trust. Please go ahead.
Rudraksh Gupta
Hi, good afternoon. This is Ruptal Suktra from Namdis Investment Trust. I have question related to forging segment. Since you are suggesting forging is a very large opportunity and it is the largest company in the world in specialty forging. Are any of those forging capabilities available in India? And what are the limitations that have restricted investment in this space?
Sachit Jain
So again, as per our partners. Okay, I’m saying as per them, for the products that are thinking of getting into India, there is no competition. And the second question for you is what took them so much time? They had been studying the forging market in India and planning to enter from before the steel plant. Because they saw the opportunity in forging much earlier. But getting the right partner has been difficult and therefore they could not enter.
But once with Vardaman, we started in steam. And after six years of working together the confidence that they have developed in us as partners has prompted them that now is the time. And since it’s been on their agenda for the last 15 years. That’s why they hurry to now once they’ve decided after. After their stake has gone up. So I would say finding the right partner, which in this case is Vardaman. The confidence of six years of working together and third with the equity infusion and fourth, since the last one year, I mean they were. They were not sure about our desire for forging. And once we started telling them also that we are also keen for forging. All those factors combined together. And finally in this board meeting it was decided that yes, we will now go ahead.
Rudraksh Gupta
Okay, sir. And what is the kind of profitability that the Japanese Ram AG makes in this business? And what is the profitability that you
Sachit Jain
Are. No, as I said, we have no information as of now. This is just a strategic decision. In the next six months all this will be finalized. Lot of discussions have to happen. Lot of information will be exchanged and decision taken. So about six, roughly six months will take for all this thing. And we will be able to share that maybe in six months time.
Rudraksh Gupta
Congratulations. And I’ll get back in the queue.
Sachit Jain
Thank you.
Operator
Thank you so much. The next question is from the line of Vaibhava Gupta from Orient Research. Please go ahead.
Vaibhav Gupta
Yeah, thank you, sir. And very good afternoon. So I wanted to understand on the demand side since the demand which we are getting is this demand sustainable in the coming quarters as well?
Sachit Jain
For steel? Yes. I. I don’t see much of a problem in meeting this demand.
Vaibhav Gupta
Okay. And second, I have a like.
Sachit Jain
Yes, sir. Sorry. Our target for this year is 225. 225, 000 tons is our budget for this year. So as of now we feel we will be able to meet this target.
Vaibhav Gupta
Okay. And secondly, what is the update on our export side? Sir, how that side is performing?
Sachit Jain
That side, as we said earlier, because of pressure in Thailand which is our main market, the exports are not taking place to the extent we had envisaged together. And therefore the pressure that the steel uptake that IHE had forecasted from for exports they may substitute that with the uptake in the of the consumption of steel in the forging business which would be focused on the domestic market. But clearly it’s a new consumption which IG will support.
Vaibhav Gupta
Okay. Okay. Thank you, sir. I will get back in the queue.
Operator
Thank you. The next question is from the line of Natasha Gupta, an individual investor. Please go ahead.
Unidentified Participant
Good afternoon, sir. Thank you for the opportunity. Sir, my question is that currently you are running at close to full capacity. So how do you plan to grow over the next two, three years? Are there any expansion plans in the pipeline?
Sachit Jain
No. So capacity for us has three elements. One is milling which is billet steel making and billet making. So we have tested a capacity of 3,25,000 tonnes in one month. Which would translate to 300,000 tons of billet making if this was equally spread out. But I would say 280 to 85,000 tonnes is the billet making capacity as of now. So we have the capacity there. The constraint is in the rolling. Now rolling also has two parts.
One constraint was through the eliminated by the Cox block. And the second constraint is with the reheating furnace. The reheating furnace is going to get commissioned by in the last quarter of this year. So after that the capacity of the rolling mill will also be about 270,000 tons of output. So after that there’ll be no constraint as far as production is concerned. The constraint then will move to the ndt because for the high quality products NDT may become a constraint. But the second entity line has already been approved, already ordered and. And under construction. So that should get commissioned by June, July next year and we have capacity to move up to then. So really speaking from the next financial year which is 26, 27 right from the beginning our capacity will be around 265,000 tons of rolled products. So we have the capacity.
Unidentified Participant
Okay. Yes, thank you. So any CAPEX plan do you have for the year?
Sachit Jain
No, next two, three years is already announced. So this the the reheating furnace, the entity line, the fuel extraction system, some Cox block is already done so and some R and D equipment. So these are the CAPEX which is already announced and already undergoing and there’ll be some more investment will happen for improving quality further. But this is already announced and ongoing. The new CapEx announces 2000 crores for the new steel plant.
And there’ll be a third CAPEX announcement which is as and when the forging plans get finalized there will be a CAPEX announcement for the forging line. If it comes up in the existing plant as we are trying there will be no CAPEX for additional CAPEX for land. And if one of the proposals that we have in mind then even the existing buildings may work. So we may not even have a building major capex except for some minor alterations and some changes. So those are things all we are examining which proposal works, which line, the layout. All those things are being discussed but we are hopeful and our full attempt will be that it can come up in the existing land. As you recall we had bought five acres of land last year. So we have some additional land which will be used either for this or shifting something from here to the new that site to get for June here. So all those things are being finalized in the next six months.
Unidentified Participant
Okay, thank you.
Operator
Thank you. Before we take the next question we would like to remind participants that you may press to ask a question. The next question is from the line of Sagar Shah, an individual investor. Please go ahead.
Unidentified Participant
Thank you. Thank you for the opportunity. Just one question on this new corporation that you have done so just wanted to understand is there any you know significant revenue contribution we can expect down the line one hour next two years from this collaboration?
Sachit Jain
As far as the steel plant is concerned, there is no new steel collaboration. As far as the forging is concerned, the forging plant as I said will come up by 29. So any revenue after the from the forging will happen only after that. And this is just to start. We will formulate specific plans but I visualize this business going up to 60,000 to 100,000 tons a year of forging capacity in the next 10 years. So we will see continuous growth once this business starts.
But provided the first line is successful and we stabilize and learn this business and able to do a job, do a good job. And the interesting part about forging is incremental capital required for growth is not as much as for steel. And you don’t need large capex to start this business. So it is a modular business. You can put in one line and the second line and the third line and keep on adding lines rather than a new steel plant.
That one line itself is going to cost us 2000 crores. So it’s going to be more capital efficient and we hope to have be closer to the final customer and we hope to improve our return on capital employed as we go ahead. But again these are all hopes at this point in time. I don’t have concrete numbers to back this up at this point in time. This is just a directional statement that we are making that strategically we are entering the forging business.
We will start with one line and what we have gathered together, we studied the product that is being thought of. There is sufficient demand in the country as you talk to a few customers. We are eagerly waiting for this product to start in the country. So selling this product in India to our existing customers is unlikely to be a problem.
Unidentified Participant
Okay, okay, that’s helpful. Answer second question more on the industry side. So are there any initiative taken by the government for the green steel?
Sachit Jain
Yes, the government already announced the norms for green steel. They have said a carbon footprint of below 2.2 is green steel. They have taken a rating, star rating. Five star rating is below 1.6 and we are at 0.73. So we are significantly better than the government non for five star rating. And after our solar plant comes up we will be at around 0.45 to 0.48. So we will be way way better. And our major competitors, all of them will be in the range of 3 to 3.2. So. So our competitor will be between 3 to 3.2. Government norm is 2.2 is green steel and we’ll be at 0.5 to 0.48. And the government is contemplating a carbon trading mechanism also to come up. So it’s clearly the government intent to give some benefits to the companies which are at a lower carbon footprint. And there is going to be. There is an announcement from the government that there will be a preference for green steel in government procurement. Now as far as government procurement is concerned, for us the main interest would be railways, especially from the new plant, but some from the existing plant. And once the government puts a reference in government procurement at some stage it will ask the major OE’s also to come in. Because government already has a target to reduce carbon footprint. They have made global commitments and the target is to bring down the carbon footprint of steel industry to below 2 by 2030. So very clearly people like us with much lower carbon footprint, some advantages will flow our way. Now what specific advantage will come, when it will come is very difficult to predict. But this will happen the next five years. Again, I’m repeating for us the main thing to see is that trend is in our favor. Whenever the change happens, it’s going to benefit us and has not been taken into account in any of our forecasts.
Unidentified Participant
That’s unprofessional. One more question. Updates on the solar panel which we are expected to, you know, install. Any update on that?
Sachit Jain
Yeah, we said it was supposed to have got commission in June. The solar plant is ready because it is ready. They’ve got all the approvals. It’s just the line laying, just few transmission line. There’s a problem. Some people have gone to court some farmers which would get vacated in the next, in the month of August. So hopefully the month of August we should have this plant running.
Unidentified Participant
Thank you. Thank you sir.
Operator
Thank you. The next question is from the line of Radha from PNK securities. Please go ahead.
Radha
Thank you. So I wanted to understand for the that you have announced how much is the breakup? What is the breakup of equity and debt and in equity what is the breakup of equity funding plans? I’m asking this because after the IG state confusion the promoter stake has come down to 51%. So what is the minimum promoter state you want to have in the next three to four years?
Sachit Jain
Yeah. So the project that we are planning as of now is going to be one roughly one is to one debt equity. So which will mean a thousand crore of new equity being raised and with a thousand crore net worth which will be the situation of the existing plant by then. So this will mean 2000 crore net worth and 1000 crore debt which is a 0.5 debt equity which is what we are targeting. Promoters are not hell bent on any particular equity number.
As of now we intend to remain above 50. But at some stage if IQI wants to increase their stake beyond this 24.9 in the next 5, 10 years, whenever they decide that is something that we have already committed as Vardaman Group we will support the increase of their share in the company. So as of now we have no desire to go beyond 51. If IG decides to increase their stake we will facilitate their increase in stakeholders. There could be a possibility of a QIP coming in. But that is something that we will examine when we need the funds. As of now the major need of fund we envisage is going to be in 2028.
Radha
Okay, so out of thousand crores it would be 385 we have already got. So the balance about 600 crores the QIP would be to that amount or.
Sachit Jain
No, no, no, no. There will be. All those things will be decided. IQIYI intends to retain their stake at 24.9. So whatever is the further equity that is raised either from promoters or from UIP or both, IHE will make sure that they retain 24.9. So they will also put in more equity.
Unidentified Participant
And so for any new project.
Sachit Jain
Can you return to the question for the follow up question?
Unidentified Participant
Yeah, thank you.
Operator
The next question is from the line of Saket from Kapoor and go. Please go ahead.
Saket
Thank you for the opportunity. So firstly on the forging line which we are alluding to in the earlier conversation. So what kind of capacity and to which sector and if you could just give a peer comparison whom you will be directly competing. So this line is going to be purely.
Sachit Jain
For automotive business. And the capacity is going to be about 12 to 15,000 tons per year. The first line and as we said, there is no real direct competitor because they have a far superior process and far superior product than their products being used in the country. So final customers will be customers like Sonar, Comstar and other such customers. So all who are. So we are talking to several customers. All of them are existing customers of vss. Because we are also very careful. We do not want to compete with any existing customer. We want to be supportive to our customers needs and give them a product which enhances their capabilities rather than competing with any of our customers.
Saket
So the first line as you mentioned, about 12 to 15,000 per ton. What kind of investment and what are the effect on our.
Sachit Jain
As I said earlier, all these things will be finalized in the next six months. As of now we have decision to start. Yeah. As of now we have taken a decision that strategically we’re entering the with the idea of specialized forgings which will not compete with our existing customers, which will support our existing customers. And so really there will be no competition in India for the product that we are contemplating. We will start with 12 to 15,000 tonnes first line and we are trying to see if it will come up in the existing plant facility itself. The details will all be finalized in the next six months. And then moment they are finalized, it will be shared with all of you.
Saket
Sir, on the volume front you mentioned we have budgeted for this financial year for 225,000. Is that understanding correct, sir?
Sachit Jain
Yes, that is correct.
Saket
We did around 55,754. So analyzing it, there will be almost a similar kind of volume for the remaining part of the year. That is what should be the linear trend barring here and there.
Sachit Jain
But business doesn’t follow linear trend, so. But yeah, you’re right.
Saket
So I did not get it. Come again?
Sachit Jain
There is. I said the auto. Auto demand does not follow a linear trend in the year. Second quarter is normally the highest sales. So second quarter will be higher. Third quarter will be a little lower. Fourth quarter is the lowest.
Saket
Okay. And I was coming to the customer feedback on the.
Sachit Jain
I mean this is typical but sometimes this changes. So these things are which vary depend. We are an intermediate supplier so our sales are dependent on auto sales.
Saket
My second, my question follow up is on that front only. What are, what are the current pillars from our major customer taking into account the deemed export from the customer side to the other nations where tariff is the X overhanging. So how are things lined up in terms of our customers commitment to exports? What are the feedbacks currently that we are getting from them?
Sachit Jain
Mixed feedback. So some customers feel that business is going on and some customers are in a very strong position. So they are able to, their customers are going to pay the differentials. But those are discussions. We don’t go into too much detail with our customers how their business is faring because please understand if they start saying oh we are under a lot of tariff pressure etc. So please reduce prices, please understand why we don’t want to in those discussions.
Saket
Correct sir. And lastly sir, on the EBITDA pattern guideline, I think so last year you alluded to the 7,000 to 8,000, correct me there also. And that will be moving up to 8 to 10. So for this financial year what should be the EBITDA per turn ballpark number which we should be pensioning in?
Sachit Jain
So as I said 7 to 10 has been a range that we’ve been speaking for some time and we are within that range. And we also said that the range should move up to 8 to 11. The factors that would have led to the range going up have partly because of the pricing pressure that came in has delayed it by one year. Plus as we said the solar plant was one factor which led to the margins going up as well as the new reheating furnace. So I would say this year will remain in this range of 7 to 10. It’s next year that we hope, we will hope to raise the range from 8 to 11.
Saket
Okay, thank you sir. I joined the close for my follow up. Thank you.
Operator
Thank you. Before we take the next question we would like to remind participants that you might press Star and one to ask a question. The next question is from the line of Sanaya Jain and a New Zealand Vista. Please go ahead.
Unidentified Participant
Hi sir, just few questions like what is the revenue breakup of rolling.
Unidentified Participant
Milk and dried gas. And also like what is the margin difference in both type of products.
Sachit Jain
We don’t share the revenue breakup in terms of sales. But roughly 75% is black bar. So all process goes through the rolling mill. Bright bar is a further value addition to the black bar. So our bright bar capacity is about 50,000 tons a year. So roughly 25% is bright bar and 75% is sold in black bar. Roughly. But it changes because those are all dependent on specific customers. Which customers or some customers buy primarily Bright bar or largely Breitbar. If their business gets affected slightly, then the bright bar the swings are bigger in bright bar business.
Unidentified Participant
Sure, sir. Thank you so much. Hello.
Operator
Thank you. The next question is from the line of Saket from Papur Koh. Please go ahead.
Saket
Yes, sir. Thank you again, sir. Firstly sir, for the IT strategy for us as you mentioned that going ahead would be more inclined to keep their stake at 25% even when the further if and when the further fundraising exercise happen through the equity route. So what is so sacrosanct of this 25% number from the ignorance. Okay, that’s a question.
Sachit Jain
That’s a question to ask ig.
Saket
Okay. Okay. Since you. Since you have laid down the commitment from their side, I thought they have given the feedback also.
Sachit Jain
No, no. So very clearly they intend to have a higher stake than even this in the future. Because for them India is a strategic market and very important market for the future. Because for Indian market itself and as an export hub to export to Europe in the future, Africa in the future and be a support to Japan. Because as Japanese population ages over time, over the next 20 see, they think 40, 50 years, as Japan’s population shrinks as it ages, demand in Japan will go down. Their ability to keep producing steel competitively in Japan may go down. All those things are much longer term plays to happen. So to de risk Toyota’s business, please understand this is Toyota’s strategy. It is imperative to have a very strong second plant out here. Now if it is important for Toyota strategic plant then Iqiyi logically as a world leader would like to have a clearly larger stake in this business. So first they started with 11.3% which was a bare minimum just to test the water. So they’ve tested us as a partner, tested India as a market and see that the partnership is going well. The next stage is to go up to the maximum possible before triggering an open offer and therefore 25 is that limit. So 24.9 is where they are and they will stick at that level and at the right time when they think there’s the right time for them. I believe that at some stage they will at some stage could be five years from now, could be 10 years from now, I don’t know. But they will at some stage increase their stage. And Vardman Group has already indicated if they want to increase the stake and then we will support. So that is the easy friendship that we have with them and partnership with them that we are, we are as if it’s IG India and they are as if they are Vadama in Japan.
Saket
When we look at your presentation wherein we have this strategic alliance with them as of now, sir, we are correct me here, as of now are we in the only product development phase or what percentage of our sales are directed directly towards the Toyota base? Through this collaboration with iqi,
Sachit Jain
Toyota still remains a smaller customer. But please understand, Maruti is a far more important customer as far as and there are other Japanese customers. So for example there’s a Yamaha, there is Kubota, there Isuzu. So there are other Japanese customers also which are on the target of Aichi and they have far more specialized products. They have some patented products also which all those products will step by step as our manufacturing capabilities increase. All those products will eventually come into India through us. It’s a step by step process. Please understand, Japanese don’t work very fast. They are cautious, able and they look at consolidation at each stage before going to the next level.
Saket
Right. And one question for our CFO sir, the tax expense shown here is around 6 crore 20 lakh. If feasible for you, can you share the advanced tax number for the June quarter? How much cash we have paid as advanced tax?
Sanjeev Singla
I think we do not share this advanced tax figures. But you can calculate at your end. We fall within the bracket of that 25% corporate tax.
Saket
Okay, but that is depend on what we are anticipating for the entire year. 15% of that. That was my reason for asking for this as per the estimates for this year. Okay. Thank you, sir. And all the best.
Operator
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Sachit Jain
Ladies and gentlemen, thank you so much for your patience. And I can see very clearly a lot of questions on forging. Apologies that we don’t have enough information at this point in time. But as soon as we have information and within the next six months, we’ll have far more information after the talks are concluded with our partners and then we’ll be happy to share all that information with you. But we are excited that your excitement on the forging line gives us confidence that strategically we’re on the right track. Thank you so much and we look forward to seeing the next call.
Operator
Thank you. On behalf of IFL Capital Services limited that concludes this conference. Thank you for joining us. And you may now disconnect your line.