Steelcast Ltd. — Call Transcript 2023

Nov 9, 2023

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AC/2079

09.11.2023

The Secretary, National Stock Exchange of India Limited, BSE Limited, Exchange Plaza, 5th Floor, Phiroze Jeejeebhoy Towers, Plot No.C/1, G Block, Dalal Street, Bandra-Kurla Complex, MUMBAI - 400 001 Bandra (E), Mumbai - 400 051 Stock Code: 513517 Stock Symbol: STEELCAS

Dear Sir/Madam,

Subject: Transcript of the earnings conference call for the Q2FY24 ended on September 30, 2023

Pursuant to Regulation 30 and 46 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed the transcript of the earnings conference call for the Q2FY24 ended on September 30, 2023 which was conducted on November 3, 2023 after the meeting of Board of Directors held on November 1, 2023.

The above information is also available on the website of Company at the following link:

https://steelcast.net/pdf/investor/Steelcast_Ltd_Q2_FY24_Earnings_Concall_Transcript_09-112023.pdf

We request you to take the same on your record.

Thanking you,

For STEELCAST LIMITED,

(Umesh V Bhatt) COMPANY SECRETARY

L:\AC\2079\COMPLIANCES\SECRETARIAL\NSE and BSE Announcements\Earning Calls\03.11.2023\Intimation to SEs for Transcript.docx

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“Steelcast Limited Q2 FY‟24 Earning Conference Call” November 03, 2023

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– MANAGEMENT: MR. CHETAN TAMBOLI CHAIRMAN & MANAGING

DIRECTOR, STEELCAST LIMITED. – MR. SUBHASH SHARMA EXECUTIVE DIRECTOR & CHIEF FINANCIAL OFFICER, STEELCAST LIMITED. – MR. UMESH BHATT COMPANY SECRETARY, STEELCAST LIMITED.

– MODERATOR: MR. RONAK JAIN INVESTOR RELATION PARTNER, ORIENT CAPITAL.

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Steelcast Limited November 03, 2023

Moderator: Ladies and gentlemen, good day and welcome to Steelcast Limited Q2 FY'24 Earning Conference Call.

As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call please signal and operator by pressing „*‟ then „0‟ on your touchtone phone. Please note that this conference call is being recorded.

I now hand the conference over to Mr. Ronak Jain from Orient Capital, their Investor Relations partner. Thank you and over to you Sir.

Ronak Jain :

Good evening everyone. Welcome to the Q2 FY'24 Earnings Conference Call of Steelcast Limited. Today on this call we have Mr. Chetan Tamboli - Chairman and Managing Director, along with Mr. Subhash Sharma - Executive Director and Chief Financial Officer; and Mr. Umesh Bhatt - Company Secretary.

This call may contain forward-looking statements about the Company, which are based on beliefs, opinions and expectations as of today. Actual results may differ materially. These statements are not guarantees of future performance and involve unforeseen risks and uncertainties that are difficult to predict. A detailed Safe-Harbor statement is given on Page no. two of the Investor Presentation of the Company, which has been uploaded on the Stock Exchange and the Company's website as well.

With this, I now hand over the call to Mr. Chetan Tamboli for his opening remarks. Over to you Sir.

Chetan Tamboli :

Thank You Orient Capital. A very good evening to everyone on this call and on behalf of Steelcast Limited, a very warm welcome to you all for this Q2 FY'24 Earnings Call of the Company. I hope everybody had an opportunity to go through the Q2 Results and Investor Presentation which has been uploaded on the Stock Exchanges and hosted on Company's website as well yesterday.

In Q2 FY'24, as anticipated, due to geopolitical conditions, high-interest rates and elevated inflation rates across the globe and as informed to you during Q1 Investor call that we will have softer two to three quarters, our year-on-year and quarter-onquarter revenue has seen a degrowth. However, despite degrowth in revenue our EBITDA and PAT margins have shown consistency and stood at 28.8% and 18.3% respectively. This is due to several factors such as higher exports realization

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Steelcast Limited November 03, 2023

compared to domestic sales, cost optimization measures, savings in power expenses on account of solar power plant, reduced input cost, savings in process costs especially the external machining costs, improved operational efficiencies.

Due to structural shift in global environment and India's rise as a global power, a global manufacturing shift has begun, moving away from China. Alternative suppliers to China are being explored by Europe, U.S. and rest of the world. This change is going to benefit us and we at Steelcast are well positioned to grab this opportunity and will capitalize on the same in the near future. We intend to do this by leveraging our key strengths such as unique business model, technology, R&D capabilities, location advantages, manufacturing skill, global footprint and marquee customers.

Speaking about the Financial Performance for the Q2 FY'24:

We achieved revenue of Rs. 101.6 crore reflecting a year-on-year decrease of 16% and a quarter-on-quarter decrease of 15%. Our EBITDA stood at Rs. 29.3 crore compared to Rs. 32.6 crore in the previous quarter. However, EBITDA margins have improved and stood at 28.8% compared to 27.3% in the previous quarter. EBITDA margins are substantially higher than our targeted EBITDA of 20%, 22%. Likewise, our profit-after-tax are at Rs. 18.6 crore resulting in PAT margin of 18.3% as compared to Rs. 17.6 crore of PAT and 14.5% of PAT margin in Q2 FY'23.

Even if you compare the PAT of H1 FY'23 to H1 FY'24, they are Rs. 31.81 crore and Rs. 38.8 crore respectively showing an improvement of 21%.

In Q2 FY'24 export revenue experienced a growth of 13% and domestic revenue showed a degrowth of 45% on a quarter-on-quarter basis. However, the domestic revenue share is expected to show improvement in the coming quarters due to stable Indian market as compared to global markets. Domestic and export share of revenue during the quarter is 30% and 70% respectively.

In Q2 FY'24 our successful repayment of the entire short-term debt totaling to Rs. 23.6 crore has led to an attainment of complete debt free status as of September 23.

Addressing our rationalization plans, both our renewable energy plants that is solar and hybrid are operating efficiently as regulatory issues relating to a hybrid power plant have been sorted out beginning July. Both power plants are generating the expected savings.

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Steelcast Limited November 03, 2023

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As all of you are aware that both these power plants are projected to yield annual power cost savings in excess of Rs. 11 crores. The savings in the hybrid power plant which started up in July but we will be receiving the savings effective October onwards. So, July, August, September savings will come in the month of October, the current month.

We are pleased to inform you that the Company has commenced serial supply of products to the North American railroad industry.

At this juncture, when we look at a decade back, our Company was very much dependent on only one industry that is mining. However, with our continuous efforts, our order book at present is well diversified across different end-user industries with railways gaining more traction.

We visualize stability in the market in coming quarters at this point of time. Global situation is expected to improve significantly in the coming two to three quarters. At the same time, we also foresee many things positive which will further improve our overall operational performance. These tailwinds include improved pricing, saving in power costs, cost optimization measures, stable input and other costs, higher productivity and better operating efficiencies.

Thank you and we can now open the floor for a question and answers session please.

Moderator :

Thank you. We will now begin the question-and-answer session. The first question is from the line of Sanjay Shah, KSA Security Private Limited. Please go ahead.

Sanjay Shah :

I have a question to ask you regarding which are the new verticals or new customers which we are foreseeing in the coming future, like we have been supplying to North America rail industry. So, what is the opportunity there? And what are the new opportunities you see in coming few years?

Chetan Tamboli :

The only thing is we will not be able to give names of the customers due to confidentiality reasons. But we have as of now, three customers in the North American railroad industry. And the market size of the North American railroad industry is also very large. And we have just made a very small share of that market, which we are quite confident that we should be able to penetrate in this market. And I am quite hopeful that maybe Q4 onwards, we will see a reasonable ramp-up in supplies to the North American railroad industry.

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Steelcast Limited November 03, 2023 Sanjay Shah : So, what percentage of our sales do you foresee from this segment itself? Chetan Tamboli : In FY'25 we should surely do about 8% of our sales. Sanjay Shah : Any other visibility, any other products or customer sector that we are trying to penetrate? Chetan Tamboli : Anything else, most of you know that the geopolitical situation in the whole world is quite disturbing now. So, to some extent, the attitude of the customers or the connected people are wait and watch kind of an attitude, but I personally believe that somewhere from the 4[th] Quarter onwards things have to stabilize. Sanjay Shah : Chetanbhai, you highlighted about some on a hybrid power that is power savings. And we have already started using hybrid power. So, what else we can do on that side, because we see our power cost ranging from around 13% upward. So, is it possible to bring down by a few percentages with these renewable power plants? Chetan Tamboli : Absolutely, the power cost, the annual savings are in excess of Rs. 11 crores so the power cost will come down. And approximately about 75% of our consumption is catered by the solar and hybrid power plants. And the reason for keeping the lower number 75% is that in case we consume less, then the generated power is sold only at Rs. 2.25 paisa. So, we would then lose money. And as and when volumes go up, we will continue to invest for our own consumption. We may increase capacity of solar or we may increase capacity of hybrid, depending upon the government regulation and the pricing aspects. Sanjay Shah : My last question was regarding domestic market, how do you see that, how that is panning for our business? Chetan Tamboli : We didn't do very well in the domestic market mainly due to the end users liquidating inventories. But things should be better from the next financial year onwards. Moderator : Thank you. The next question is from the line of Ashwini Agarwal from Demeter Advisors LLP. Please go ahead. Ashwini Agarwal : So, first question is, domestic market I mean we keep reading about how the CAPEX is going quite well, especially government CAPEX on infrastructure. And you mentioned in response to the previous question that there will be, your customers were liquidating their inventory. How much time do you think it will take for things

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Steelcast Limited November 03, 2023

to turnaround? And a related question is, when I looked at the tractor sales numbers, and that's an industry where products go, those numbers have been quite robust, both from Escorts and the other. So, is there anything else that's hurting our domestic revenue?

• Chetan Tamboli : If you see the tractor output now, tractors have only iron castings and we don't make iron castings, we make only steel castings so that's one part. But as I said in the Q1 Investor call, once the inventories are liquidated through the entire supply chain we should be up and running. So, I expect things to stabilize by the end of March '24.

• Ashwini Agarwal : Another related question is that there has been a plan to probably start a new manufacturing site, has there been any progress that you can share with us at this point?

• Chetan Tamboli : As we said during the Investor Presentations in September, we have all the blueprints ready, we have all the layouts ready. Our proposals have been going around in different parts of the world. But I think as I said earlier, answering the first question that people have gone into a wait and watch mode so probably when the geopolitical situation improves probably things will then start moving, but so we should talk at least somewhere Q4 onwards.

• Moderator : Thank you. The next question is from the line of Harshil Solanki from a Equitree Capital. Please go ahead.

• Harshil Solanki : I have few questions, first is on the export front what you are hearing from the customers, is this slowdown temporary or as the cycle peaks because post the Caterpillar's result there is some apprehension that we may be at the peak of the cycle. So, what are you hearing from your customers in this regard?

• Chetan Tamboli : What we have been hearing for past couple of months is the excess inventories which were there which is being liquidated so, the volumes are lower. So, once this is sorted out we should start seeing some moderate growth.

• Harshil Solanki : So, we should consider this as temporary?

• Chetan Tamboli : This is what we are hearing from all of our customers. So, probably we can safely assume that this could be of possible temporary nature unless something drastically goes wrong with the whole world then it could be different thing, but the feedback we have is that this is temporary.

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• Steelcast Limited

• November 03, 2023

• Harshil Solanki : And we started supplying to ARR this quarter. So, what was the contribution from that?

• Chetan Tamboli : This quarter was just, I think Rs. 2.5 crore to Rs. 3 crore. And there will be some improvement in Q3, further improvement in Q4. And, of course, a substantial number of railroad sales in FY'25.

• Harshil Solanki : Do we have any orders in hand from the ARR?

• Chetan Tamboli : We have orders on hand and on that basis, I am giving you the actual numbers of Q2 and then some improvement in Q3 and the Q4.

• Harshil Solanki : And on the ground engaging tools, we were expected to get some visibility in Q2. So, where are we now?

• Chetan Tamboli : As I just said, because of the geopolitical situation people are into a wait and watch mode so we will have to wait for one or two quarters, till people start taking decisions there. But there is demand, on a very macro level people want to shift to India and within India whoever are the best players will get some contribution of reducing dependence from China, and Steelcast is quite well positioned to do that. So, all these things put together we should have good opportunities going forward.

• Harshil Solanki : Last question on the Defense side, have we got any new orders for the tracks? What is the status on those new products or new orders that we could get from the defense?

• Chetan Tamboli : You know, the first trial tracks have been approved. We are going to be doing five more tracks by the end of March. And then we will have to wait for the government to open tenders, because all the procurement is based on tenders. So, we have been told that somewhere in the next financial year will be tenders coming, and we will have to bid for it. So, we are in line with that, only thing is the bureaucracy sometimes as you know delaying things.

Harshil Solanki : But we had some other products also which we have developed. So, are we seeing any traction?

• Chetan Tamboli : Other products there is no movement on that, we have made samples, we have submitted them we are waiting now for them to have new tenders which we will be bidding for it. But as of now we don't see any big visibility in the Defense sector and when opportunities come we are quite well positioned there also.

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Steelcast Limited November 03, 2023

• Moderator : Thank you. The next question is from the line of Mahesh Atal from Atal & Associates. Please go ahead.

• Mahesh Atal : Volume numbers for this quarter in tonnage, first query will be this. Also, I would like to know, from American railroad industry you said that FY'25, 8% of sales could be coming from there. So, if I take it on a tonnage basis that means you are expecting somewhere around 600 tons of quarterly business from them.

• Chetan Tamboli : I told about 8% for the next financial year, please.

• Mahesh Atal : Yes, that is FY'25 only, I just wanted to know that what could be the number for FY'26 and FY'27. If you have the numbers or you are at, I mean, you could foresee the demand?

• Chetan Tamboli : See FY'26 will surely be better than FY'25. And also, FY'27 will be better than FY'26, only thing is at this point of time, we really don't have numbers which we can share with you for '26, '27.

• Mahesh Atal : You must have done a base study like what is the American Railroad industry total altogether, I mean tonnage, if we want to just measure it in tonnage.

• Chetan Tamboli : Yes, it should be about half a million tons.

• Mahesh Atal : And you are expecting like, I mean, somewhere you know like?

• Chetan Tamboli : Now this half a million tons will be many types of products, will be low-end products, high-end products. So, wherever we are focusing, that volume could be about 100,000 tons and so from 100,000 tons what we are aiming is 2,000 tons may be next year and then slowly increasing those numbers.

• Mahesh Atal : What is the volume quantity for this quarter?

• Chetan Tamboli : We did about 3200 tons.

• Mahesh Atal : That‟s almost a fall of 20%.

• Chetan Tamboli : If you see the sales have also seen a degrowth.

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Steelcast Limited November 03, 2023

• Mahesh Atal : So, what has led to I mean the margins like slightly moving ahead, I mean what has actually come in this because I think the production side you are not having any leverage for this quarter.

• Chetan Tamboli : See as I have said in the initial talk that we had a slightly better realization in exports because of the exchange rate, we have savings in power, the input costs in Q2 were lower than Q1. So, that led to some operational efficiencies. So, these are all bundled together and that's how this result is.

• Mahesh Atal : Also, if I remember correctly in your last call, you said that FY'25 we could reach a capacity of 60% and then upwards of that in the coming year, are you still with that guidance, or you want to revise it or something?

• Chetan Tamboli : We should revise it, but because of the disturbed scenario worldwide now, we really can't predict an exact number, maybe hopefully in the next Investors Call we should be able to do this. So, when you are nearing completion of the year, we might have good visibility.

• Mahesh Atal : So, basically, right now we are not very sure of covering our 50% thing that you have actually anticipated earlier. In the last con-call you said that we will be ending this year at 50% and then?

• Chetan Tamboli : This year it would be a little lower than 50%, next year it will be higher than 50% but let‟s see, we will have some visibility in the next call.

• Mahesh Atal : Another question would be, see I think the Defense thing is like, can you please elaborate what kind of product this is, is this vehicle thing, I mean the body of the vehicle that you are actually building for the Defense or what exactly it is?

• Chetan Tamboli : These are components for different Defense vehicles. It will be difficult for us to share exactly what they are on the call because of confidentiality reasons. But if you ever happen to visit Steelcast, we will probably show it to you here.

• Mahesh Atal : I mean who is competing with you on this side, I mean, how many players in this particular segment for you?

• Chetan Tamboli : We don't know in the Defense sector there are a couple of players. We don't have exact information. But there are at least seven, eight players in India who are doing similar types of work.

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Steelcast Limited November 03, 2023

Mahesh Atal : So, one more thing Chetanbhai, see we are already, we are doing great margins. And all hats off to you, you have still maintained the margin at the level that I mean it's on the higher side, always. But I am just wondering, with the operating leverage consummate because then we will be increasing the capacity, sorry, I am talking about the utilization. So, do you see that the leverage resulting into higher margins in future? Chetan Tamboli : See, I have been always saying that we aim around 20%, 22%, but then get away the extra 3%, 4% by various measures so that's what should continue. Now, there will be many sectors as we move forward, but I think we should be happy with whatever we are doing now. Mahesh Atal : I mean, even the American railroad industry, you are expected to maintain the same thing, right? Chetan Tamboli : As a Company the policy is to work around 20%, 22% and then end up getting little more. So, that's the endeavor we have, and we will try hard to perform like this. Mahesh Atal : Also, during this quarter or certainly in the next quarter, do you see any new segment opening for you in the domestic market? I mean, are you applying for something are you doing R&D in certain areas, which could be a big thing that you would like to tell us about that? Chetan Tamboli : If you go through our few Investor presentations which are on our website and also on the Exchanges, our existing end-users are written there, the focus areas are also written there. So, at the moment, whatever is given is in public domain, the efforts are on and we should surely succeed in that.

Moderator: Thank you. The next question is from the line of Rashmi Sharma from Samar Wealth Managers Private Limited. Please go ahead. Rashmi Sharma : So, my first question is regarding the CAPEX that what amount of CAPEX can we expect in future? And how much CAPEX we have spent in first half of our FY'24? Chetan Tamboli : To answer your question the CAPEX for the future, we have given in our presentations that there are different projects we are working on. And so, those CAPEX numbers are also there, but depending upon which one we will go first, we don't have a clear idea now, if you can refer those projects where we have written

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Steelcast Limited November 03, 2023 work in progress so those are the ones. And in the first half of this year, the CAPEX is around Rs. 8 crore.

Rashmi Sharma : My second question is regarding what is the management‟s guidance regarding the future top-line and bottom-line for this year and for the coming year?

Chetan Tamboli : I think it's very difficult to give out sales number for the year end and next year. But we have said that there will be a degrowth of about 15% compared to last year so that should be the top-line and from the current year's number we should do at least 10% better next year.

Moderator : Thank you. The next question is from the line of Rahul Jain, an Individual Investor. Please go ahead.

Rahul Jain : My question is what are our revenue targets for this fiscal? And the expected revenue growth for the next few years of our Company? Which has recently initiated feeder applied to the U.S. railroad. Also, can you provide some insights into the number of customers that has been added during this period?

Chetan Tamboli: Now as I said compared to last financial year there will be a degrowth of about 15% this year. While we will have degrowth but the operating team at Steelcast is working extremely hard to protect the bottom line which we want to protect this year. And next year we should do 10% better than in the current financial year.

Rahul Jain: My next question is we have observed a shift in our revenue realization with domestic revenue surpassing the export revenue in Quarter 1 while we have also seen in Quarter 2 a notable increase in the export revenue. So, sir could you provide some insights?

Chetan Tamboli: See every industry segment and within the industry particular customer, they don‟t go in tandem. So, we had higher domestic revenue in the 1st Quarter and then we have the lower domestic number in the 2nd Quarter. But ultimately once the year is over, we should be around, anywhere from 55% to 60% range which is exports and balance will be the domestic market.

Moderator: Thank you. The next question is from the line of Varun Mishra, an Individual Investor. Please go ahead.

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Steelcast Limited November 03, 2023 Varun Mishra: Actually, I had a question that given that our Company‟s EBITDA margin is surpassing the initially set margin like the targets which were set so like should we consider revising EBITDA margin target or like these would be the stable numbers like preceding quarters as we see? Chetan Tamboli: So, I just said in spite of the degrowth, we are trying to protect the bottom-line, bottom-line should not go down. And we are striving very hard and it‟s our endeavor at least this year that let‟s have a flat bottom-line compared to last financial year let there be a degrowth. And for the future we will have probably next year we could see a 10% growth in revenues compared to this year.

Moderator: Thank you. The next question is from the line of Mahesh Atal from Atal & Associates. Please go ahead. Mahesh Atal: What is the cash in our books as on 30[th] September? Chetan Tamboli: You mean free reserves? Mahesh Atal: Free reserves, yes; the free cash. Chetan Tamboli: While we give you this number, you can ask your second question. Mahesh Atal: So, basically see I don‟t see any, you also said that there is no plan as this year like 50% may be, 55% next year. So, I don‟t see any CAPEX because we are already at 29,000 tons or 30,000 tons. So, I think the CAPEX requirement for you down the line in '25, '26 and '27, it will come somewhere around in '27. And if you can quantify what would be the major CAPEX at that time? And what will be the value of the CAPEX? Also what are you going to do with this cash, because your return on capital employed and ROE could suffer because of holding to this cash position as you know.

Chetan Tamboli : See holding this cash is basically reserved for doing the CAPEX in the coming six months time or so.

Mahesh Atal : So, what would be the CAPEX, I mean what could be the number?

Chetan Tamboli : See the opportunities are immense, we are working on several fronts. And on a very macro level over four, five years we aspire to reach at least Rs. 1,000 crores of sale. So, the dialogues are on in different parts of the world and as and when they

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Steelcast Limited November 03, 2023

materialize, we will share with the investors. And so keeping free reserves may be could be temporary in nature as we want to continue investing from the free reserves what we have.

Mahesh Atal : What is the cash, do you have the number?

• Chetan Tamboli : The free reserves in fixed deposit is I think about Rs. 2 crore as of September 30[th] . And I would request all investors to be patient. The world is going through turmoil so there will be some kind of pause happening not only in our industry, but across all industry sectors. So, I can say once again that there are huge opportunities for this Company, and we are quite prepared to encash them. And we will continue sharing with the investors.

• Mahesh Atal : My just I mean because I understand that we need to hold certain cash but just wanted to understand I mean as a policy do we have anything like, is there any risk, I mean on record that this is what the CAPEX that we are planning to do or maximum this is what we will be looking at for this year?

• Chetan Tamboli : I think whatever you are asking is already uploaded in the month of September on our website. The likely CAPEX scenario, what we are doing, also says about our treasury policy which is also given there. So, if you go through that you will have all the answers.

• Moderator : Thank you. The next question is from the line of Anirudh Shetty from Solidarity Investment Managers. Please go ahead.

• Anirudh Shetty : Our working capital days is about 75 days at present. Just wanted to understand is there a scope for improvement going forward and where do you see this number settling on a more medium to long term?

• Chetan Tamboli : See our existing product mix will have the throughput time anywhere of 60 to 90 days. So, we are averaging around 74, 75 days. And if you really ask for improvement surely there is room for improvement, we should knock this down by at least 10% in the coming few quarters.

Anirudh Shetty : And this improvement would come from where?

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Chetan Tamboli : See this is all connected to the throughput time so there will be bottlenecking the entire value stream. So, once you start debottlenecking them the working capital number of days will come down.

• Anirudh Shetty : And my second question is over the time we have de-risked from the end industry perspective mining has come down while the share of earth moving has gone up. So, just wanted to understand how is earth moving different from mining and what is the end industry application?

• Chetan Tamboli : When you say mining the equipments are used for mining the commodity. When you say earth moving, it is moving the commodities from the mines to wherever it has to move out. So, that‟s the basic simple difference.

• Anirudh Shetty : But the question I wanted to understand is say it is in a way earth moving is mining linked, because your moving commodity is from the mine to elsewhere. If there is a mining downturn then do you feel that your earth moving category would remain resilient or that also could see some impact?

• Chetan Tamboli : See by and large they are all connected to mining, but the types of equipments are different, the products are different. So, obviously if you mine less you move the commodity less also, it goes in tandem, right. So, yes your question is right, but of course we are separating this because the equipments, the products are all different between mining and earth moving.

• Anirudh Shetty : And my final question is right now we do casting and machining and some products are either casted or some are casted and machined, so typically what is the margin difference, what is the margin bump up that we get by doing the value-addition of machining, how much is the margin move just an approximate number?

Chetan Tamboli : Yes maybe 1% or 2%, 3% more but it really all depends on what customer needs, some may need product without machining, some may need with machining. So, what we try to do it 20%, 22% is the composite number. And then by various, of course, I am repeating what I have said earlier, but there are combinations of factors we end up getting few percentage points more.

Moderator : The next question is from the line of Shuchi Nahar from SN Investments. Please go ahead.

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Shuchi Nahar : If you can repeat on the capacity utilization what we can expect for the next two quarters, so if you can highlight on those?

Chetan Tamboli : See overall for the year we should do around 43%, 44%, next year should cross 50% plus.

Moderator : Thank you. Ladies and gentlemen, due to time constraints, that was the last question for the day, I now hand the conference over to the management for the closing comment.

Chetan Tamboli : On behalf of Steelcast, I myself and our Executive Director and CFO – Mr. Sharma, our Company Secretary Mr. Umesh Bhatt, we really thank you all for attending this call and taking time out to interact with us. We look forward for the next quarter Investor call and wish you all very nice day and Happy Diwali and Happy New Year in advance. And we also want to thank our IR partners Orient Capital for organizing this call. Thank you. Thank you once again.

Moderator : Thank you. On behalf of Steelcast Limited that concludes this conference. Thank you for joining us and you may now disconnect your lines.

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