Q1 2027 JTL Industries Ltd Earnings Call
Speaker #1: Ladies and gentlemen, thank you for your patience. We will be beginning with the conference soon. Thank you. Ladies and gentlemen, good day, and welcome to the JTL Industries Limited Q1 FY27 conference call.
Speaker #1: As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.
Speaker #1: Should you need assistance during this conference call, please signal an operator by pressing star, then zero, on your touch-tone phone. Please note that this conference is being recorded.
Speaker #1: I now hand the conference over to Ms. Neha Talreja from Nuwama. Thank you, and over to you.
Speaker #2: Thank you, Ananya. Good afternoon, everyone. I warmly welcome everybody to the JTL Industries Q1 FY27 earnings conference call. On the management side, today we have with us Mr. Pranav Singha, Executive Director; Mr. Dhruv Singha, Executive Director; and Mr. Naveen Laroya, CFO.
Speaker #2: Without taking any more time, I will now hand over the call to Mr. Naveen. Sir, over to you for your opening remarks.
Speaker #3: Good afternoon, everybody. This is Naveen Laroya, CFO of JTL Industries Limited. I thank you all for joining the earnings conference call of JTL Industries Limited to discuss the performance for Q1 of financial year 2025.
Speaker #3: We—27, sorry. We appreciate your continued support and interest in our company. The company achieved its highest ever quarterly revenue from operations and EBITDA in Q1 FY27.
Speaker #3: Revenue from operations reached Rs. 722 crores, while EBITDA was Rs. 59 crores, with a margin of 8.1%. Profit after tax for the quarter was Rs.
Speaker #3: 35 crores, with a margin of 4.9%. That figure of 35 crores is after 2.8 crores of additional non-cash depreciation arising from the March 2026 asset revaluation at JTL Defense Limited.
Speaker #3: As to while RCI Industries and Technologies Limited, the company has reported a sales volume of 118,513 metric tons during Q1 FY27, reflecting 17.8% year-on-year growth.
Speaker #3: Operational revenue per ton increased to Rs 6,882, while operational EBITDA per ton, without other income, improved to Rs 4,954 per metric ton. This was supported by an improved product mix and a continued focus on operational efficiencies.
Speaker #3: During the quarter, the company continued to strengthen its presence across key end-user industries through its value-added product portfolio. The EFT structure continued to gain acceptance across the dealer network and industrial applications, supported by improved production and capacity utilization at the Mangal facility. The quarter also marked progress in strengthening the company's presence in the water infrastructure segment with the receipt of Rs.
Speaker #3: A ₹27 crore order for the supply of galvanized iron pipes for water supply and distribution projects in Himachal Pradesh—this order reinforces the company's capability to cater to institutional infrastructure requirements and further strengthens its position in the domestic market.
Speaker #3: The company continues to focus on improving operational efficiencies, expanding the contribution from value-added products, and strengthening its presence across domestic and export markets. Supported by its integrated manufacturing platform and diversified portfolio, JTL Industries remains focused on creating long-term value through disciplined execution and sustained operational performance.
Speaker #3: With this, I would now request the moderator to open the floor for questions and answers. Thank you.
Speaker #1: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone phone.
Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.
Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Lokesh Kashikar of Smiths Institutional Equities.
Speaker #1: Please go ahead.
Speaker #3: Yeah, hi. Congratulations, sir, on the very good set of numbers during the quarter. A couple of things—a couple of questions from my side.
Speaker #3: Starting with EBITDA per turn—this quarter, the EBITDA per turn was closer to around $5,000. It was elevated and better than guidance, so I just wanted to confirm: Is there any one-off, like inventory carrying gains?
Speaker #3: Or is it just a function of elevated mix? That is the first question from my side.
Speaker #4: Hi, Lokesh. Thanks for the question. So, the consolidated EBITDA per ton—this includes the consolidation of JTL Defence as well. JTL Defence contributed close to ₹200 addition in the EBITDA per ton.
Speaker #4: Bearing in mind that the EBITDA per tonne was at around the 40 to 50 level, which was, again, a growth as well. And as we mentioned, our focus this year is to maintain the EBITDA around ₹4,500.
Speaker #4: So, we are willing to act to get the guidance in reach. And the only competition added was JTL Defense.
Speaker #3: And so, what would be the guidance? Would it be closer to, on the consolidated level, around 4,500 to 5,000? Or how would it be?
Speaker #4: So, given the normalized situation of HRC right now, we are a bit confident that the 40 to 50 EBITDA per turn in the JTL skilled user type segment is something that you can achieve in the coming quarters as well.
Speaker #4: There is an upward trajectory that we foresee ahead as well. So we are very confident that the control level of ₹5,000 is something that we'll definitely achieve in the coming quarters as well.
Speaker #3: Sure, sure. And so, secondly, what was the EBIT? What was the value-added mix during the quarter? And what was the export component to the overall mix?
Speaker #4: So the value-added composition was again close to 35%, what we've been doing in the past as well. There was slightly dip in the exports this time.
Speaker #4: That was mainly because of container shortages happening everywhere. So, exports were at 5% this quarter. Going ahead, we have a healthy order book of exports—actually, one of the biggest export order books we have in hand right now.
Speaker #4: But because of the whole situation, there has been some lag in dispatches. But going ahead, we'll cover up everything.
Speaker #3: Sure, sure. And sir, last one—just checking on the volume growth guidance. Earlier, you had guided to around 30% volume growth for FY27. So, does that remain intact?
Speaker #4: Definitely, that remains intact. So if we I want to ask a question. So my H2 is usually stronger than H1. Given that I do similar kind of volumes actually higher kind of volumes than what we didn't done in Q1.
Speaker #4: And if you do a 20% growth over that, we will anyway cross the 30% guidance as well. But still, 30% is something that we'll definitely achieve.
Speaker #4: But our aim will be to deliver more than that as well.
Speaker #3: Sure, sure. That's it. Thank you.
Speaker #1: Thank you very much. The next question is from the line of Sawick from Nuwama. Please go ahead.
Speaker #5: Hello. Hi. Hi, management. Hi. I just wanted to know a little bit about the manga facility, and are we on track too for its completion by H1?
Speaker #5: And how much has been the utilization in the first quarter for the same facility?
Speaker #4: Hi, Sawick. So, the utilization of the Manga facility is about 42% right now. Going ahead, we are very confident we will achieve the desired capacity addition of close to 1 million tons by the end of H1.
Speaker #4: And right now, at the overall company level, we are operating at 50% utilization levels. By year-end, this level should be close to 65%.
Speaker #4: So, as I mentioned, you should see a better H2. This will be because it is mainly led by the utilization increase at the Manga facility.
Speaker #4: Over there, we are doing close to 7,000 to 10,000 tons of DFT right now, which has a huge space to grow—in fact, it could double from here as well.
Speaker #4: So, once we do that—once we start to achieve that—our utilization level from the plant itself will touch 60%. The utilization will increase, and so will the margins coming from the Manga facility.
Speaker #5: Thank you. Thank you so much. I just also wanted to touch upon the export bit. I think you mentioned that we have the highest ever export order book currently.
Speaker #5: Could you speak more in terms of what has happened in exports, and give us some more flavor on it?
Speaker #4: Yeah, hi Sawick. Group this side. So on the export side, we do see issues in hormones and the lack in availability of containers and transportation there was.
Speaker #4: The first quarter was hit a little bit in that aspect. But, having said that, in recent times, we've been awarded different affiliations like ACRS, and we've also started some exports to the Americas.
Speaker #4: So we've had good interest from there, and currently we have a good order book for exports. To take care of that, if the logistics situation improves, we shall cover up this lack in the first quarter in the second one.
Speaker #5: Okay. Okay.
Speaker #3: And to quantify, the earlier mentioned target of 10% of total sales to exports is something that we'll target for the coming quarters as well.
Speaker #3: The some lag in 5% will be accounted for in the coming quarters.
Speaker #5: Understood. Could you also give me the capex outflow that you plan for FY27 and FY28?
Speaker #3: So for this year, the capex outflow is close to ₹100 crores. And this will be completing our entire capex. After that, there will be only maintenance capex of ₹30–40 crores every year at max happening.
Speaker #3: But the remaining ₹100 crores of capex will complete our entire journey to 2 million tons.
Speaker #5: Okay. Okay. Thank you. Thank you so much.
Speaker #1: Thank you. The next question is from the line of Jatin from Nuwama. Before that, ladies and gentlemen, as a reminder for all participants, please press star and one to ask a question.
Speaker #1: Participants who wish to ask a question, please press star and one. Jatin from Nuwama, please go ahead.
Speaker #3: Hi, Dean. Good morning. So, I've got two questions. First is on JTL Defense. So, coming to guidance, are we maintaining our guidance at ₹200 crore of top line and 6,000 tons?
Speaker #3: And I believe you did the marketing guidance for about 10 to 15%. What is that? Sorry, can you please repeat the number that you said, please, if you want?
Speaker #3: Hello?
Speaker #1: Ladies and gentlemen, we have lost the line with the last participant. This is a reminder for all participants: please press star one to ask a question.
Speaker #1: The next question is from the line of Nishita Shanklesh from Sapphire Capital. Please go ahead.
Speaker #6: Hello. Am I out of it?
Speaker #4: Yes.
Speaker #6: Yeah. So, just to clarify, currently our capacity is 1 million tons. And you mentioned that after our total capex of ₹100 crore is done, we'll reach a capacity of 2 million tons.
Speaker #6: So, how much can we ramp up this capacity? And is it going to come in phases?
Speaker #3: Yes. So the capacity is going to come in phases. The ramp—so if you talk about the full 1 million tons, out of this, 700,000 tons, or close to 700,000 tons, shall be commissioned by the end of H1.
Speaker #3: And the remaining 3 lakh tons will be commissioned by next year around this time, and that will be of API pipes. That was already announced before.
Speaker #3: And if you talk about the ramp-up, the ramp-up will take some time. Although, you will see some contribution of the new capacity happening every quarter.
Speaker #3: But the full utilization levels will be met by FY29. And on that whole capacity, we should achieve a plus of the 50 to 55 percent utilization levels in FY29.
Speaker #3: So if you talk about.
Speaker #6: So in FY29, we can reach 50 to 60 percent utilization level.
Speaker #3: 50 to 60 percent utilization levels—it's too early for us to comment right now because it depends on in which quarter the full capex is completed for the remaining last 3 lakh tons.
Speaker #3: Of API pipes. So, that will be a key thing to note, and to tell when exactly we can achieve the utilization accordingly.
Speaker #6: So the total capacity, we can assume, will be commissioned in FY28, and by FY29, we can reach the utilization level of 50–60 percent.
Speaker #3: 50 to 60 percent. Yeah, 50 to 60 percent in FY29.
Speaker #6: Right. Right. Okay. And what will it be at peak utilization? I'm assuming the peak utilization to be 75, 80 percent. What is the total revenue that you can expect?
Speaker #3: The peak utilization that we can achieve is close to 70 percent. So that is something that we'll target in FY29 itself as well, as I mentioned.
Speaker #3: But it is very subjective how far the capex is completed on the last leg. So, 70 percent is something that we'll reach at peak.
Speaker #3: So that can happen as soon as FY29 as well, or it could happen as late as FY30.
Speaker #6: Okay. And the revenue potential at peak utilization will be?
Speaker #3: Sorry?
Speaker #6: The revenue potential at peak utilization?
Speaker #3: So right now, the realization per ton is close to ₹6,000. As we are pouring into value-added products, going ahead, we can expect the realization to increase from ₹6,000 to ₹65,000–₹66,000 per ton going ahead.
Speaker #3: So, around the peak levels of 70 percent, if you do, say about 1 to 4 million tons, into 65,000 rupees, that is something that could be the peak revenue.
Speaker #6: Okay. Okay.
Speaker #3: On the current capex cycle.
Speaker #6: Okay, understood. Thank you so much.
Speaker #3: Okay.
Speaker #1: Thank you. Ladies and gentlemen, a reminder for all participants: please press star one (*1) to ask a question. Participants wishing to ask a question, please press star one now.
Speaker #1: The next question is from the line of Jatin from Nuwama. Please go ahead.
Speaker #3: Hi, apologies for earlier. Continuing on the previous question, my question was on JTL defense. So, the guidance, I believe, was a top line of ₹200 crores and a volume of 6,000 tons, right?
Speaker #3: And EBITDA margin at 10 to 15 percent—are we maintaining that?
Speaker #4: Hi Jatin. So this guidance is not for the volume guidance for this year. Although, the top line is something that we're still trying to achieve.
Speaker #4: And we'll be touching close to ₹150 crore of top line on that. Right now, given the run rate of Q1, we were at about 100 metric tons a month.
Speaker #4: And we've already reached a run rate of 120 metric tons a month in this quarter. In this first month, we did close to 120 metric tons of sales in Q1, the first month of this quarter.
Speaker #4: So, we are expecting, by the exit quarter, we'll be touching close to 500 tons of sales in defense by that time. And the guidance on the margin over there—so, Q4 was an exceptional quarter in that, because it was led by inventory gains.
Speaker #4: In which we did 20 percent EBITDA margins. In Q1, we had about 12 percent EBITDA margin. In defense, going ahead, it's too soon again to maintain the exact 15 percent margin going ahead.
Speaker #4: But the long-term margin is 15 percent. For now, though, it can waver because it's a new setup for us, a new industry for us.
Speaker #4: So, a lot of things are being tested over there, and a lot of things are being planned differently as well. But 10 to 15 percent is something that you will achieve in the long-term proposition.
Speaker #3: Understood. Understood.
Speaker #5: A second question is coming to growth. I mean, will you be able to quantify? I mean, how much of the growth, volume growth has come up from the new capacities that are ramping up and how much has it come from the market share gains that you've been getting from filling the channel inventory?
Speaker #5: If you can just give a quick update.
Speaker #3: So, as I mentioned earlier, we were doing close to 10,000 tons of BFT a quarter. From that, we have almost doubled ourselves, and we are close to 20,000 to 25,000 tons of DFT a quarter right now.
Speaker #3: So there is new capacity which is playing a role as well, and also we are gaining share in the segment as well because we are getting paneled in a lot of places in Maharashtra itself.
Speaker #3: And in the export market as well, there is a good demand for DFT sections. We have opened our borders to the USA and Mexico as well.
Speaker #3: And Canada as well. So all these places, DFT is being exported as well. So there’s a bit of market share gaining happening, and there’s a mix of new areas opening as well.
Speaker #5: Okay, great. Thank you. That's all from my end.
Speaker #1: Thank you. A reminder for all participants: please press star and one (*1) to ask a question. Participants who wish to ask a question may press star and one.
Speaker #1: The next question is from the line of Devang from Abacus Asset Manager Private Limited. Please go ahead.
Speaker #5: Hello, sir. Good afternoon. Congratulations on a good set of numbers. My question is on the demand side: how is the demand shaping up from various sectors at the moment?
Speaker #5: How do you see it going forward?
Speaker #4: Hi. You said demand standing out from—I could not hear the last part. Sorry.
Speaker #5: Yeah. How is the demand standing out in terms of various sectors in the usual industry? So, I'm not asking.
Speaker #4: Yeah. So, see, there is good demand. Firstly, there is a difference between the primary and the secondary products. So, there is good demand in the secondary product at the moment.
Speaker #4: It says record-breaking demand in the secondary product. So, that is one aspect of it because the difference is there. And in the primary product, where we have gained market share in DFT, we have gained market share in specialized products from low diameter, high thickness.
Speaker #4: Replacement of seamless pipes, making some thicknesses as replacement of seamless pipes. So, in these areas, we are actively gaining ground with direct supply to OEMs also, and then through the dealer network.
Speaker #4: So these products are something not everybody is doing, and only a handful of us are doing in India. Earlier, they were imported a lot.
Speaker #4: So these are the markets where we are gaining active share, and we have received a lot of positive responses in this area. Over time, we have also refined how we are able to deploy these products into areas such as the replacement of, say, seamless pipes in hydraulic segments and in automotive segments, where price sensitivity has become an issue and there is also a need for higher-grade materials.
Speaker #4: Which performs better. So we've been able to penetrate in that right now.
Speaker #5: That's basically our entry into import substitution and new areas, basically. Is that understanding correct?
Speaker #4: Yes, yes, yes. And these are all value-added products. So, for us, value-added is only, yeah, galvanized pipe. But these areas are now value-added products.
Speaker #4: In the black stuff.
Speaker #5: So, value addition proportion is 35% currently. How can it pan out over the next couple of years? What percentage is it going to go to? Because we have capacity coming in the Munkavichar value addition.
Speaker #4: No. Sorry. Come again.
Speaker #5: I was asking, if 35% value addition—what we are, 35% of the product mix is value-added. So, what can it go to in the medium term, say, a couple of years down the line?
Speaker #3: So our target is, when we are getting all the CRM processes running, also running the 1 million to 2 million tons—that is all value-added product.
Speaker #3: So, our target in the coming future is that a minimum of 50 to 60 percent of our product will be value-added.
Speaker #5: Right, right. And how does July pan out in terms of volumes? Any color on that?
Speaker #4: So July for us was, again, an all-time high month. And going ahead with the run rate as well, we'll be able to achieve an all-time high quarter as well, given the situation.
Speaker #4: So things are shifting, as well. As Dhruv mentioned, there is a good gap in primary and secondary right now as well. So, because of the whole situation, the secondary demand is also excellent as well.
Speaker #4: And because of this situation, we are able to build—you’re probably able to deliver another all-time high quarter.
Speaker #5: Okay. Yeah. And lastly, I missed the CapEx number. Can you please give it again for F27 and F28?
Speaker #4: For FY27, the CAPEX figures would be close to ₹100 crore. And that's the complete CAPEX. In the next financial year, the CAPEX will be maintenance CAPEX of ₹30 to ₹40 crore at max.
Speaker #5: Got it. Got it.
Speaker #4: This is only the capex of industries. There can be some capex happening in defense as well, so that is extra over that. But that capex is anyway not any sizable capex.
Speaker #4: It will be close to ₹15–20 crores going ahead as well.
Speaker #5: Got it. Got it. Thank you for answering, and all the best.
Speaker #4: Thank you, Devang.
Speaker #1: Thank you. A reminder for all participants: please press star one (*1) to ask a question. Participants who wish to ask a question, please press star one at this time.
Speaker #1: The next question is from the line of Sneha Talreja from Newama Wealth Management. Please go ahead.
Speaker #6: Hi Dean, thanks a lot for the opportunity. Just a couple of questions from my end. While you answer them, could you tell us how government capex is at this point of time?
Speaker #6: Are we getting any orders from Nalsej, or have we earlier been one of the beneficiaries? Or are we seeing any capex outlay from that particular scheme happening?
Speaker #6: That's the first one.
Speaker #4: Hi, Sneha. So, there has been a little increase in the government capex. It's not the situation we saw two years back, but now there has been improvement.
Speaker #4: And we've got some orders as well. But we, as a company, have made a point of having more sales to our dealer network. And exports—that's what our target audience is right now.
Speaker #4: The government sector has very seasonal demand, so we are not relying on the government sector anymore. Earlier, our Dera Bassi plant, which is a Punjab plant, was dedicated toward government orders.
Speaker #4: But now we have shifted that mode. And from there, we are keeping the dealer market as well. It's just that, when there are good government orders of a particular size coming in that are favorable to us, that's when we open up to these orders.
Speaker #4: So that's why, if you saw as well, like last year, government contribution was not even 5%, which was over 25% earlier. So we've been trying to intentionally cut off our government base as well and focus more towards dealer and export markets.
Speaker #6: Understood. Is there any dealer distribution network increase that you would like to share with us?
Speaker #4: The current dealer network is sufficing with the products. The DFT product, which has been a volume pusher, is actually going to departments like MMRDA and airport authorities.
Speaker #4: So these are the places where the product is going, and not to dealers. Earlier, in the first quarters, when we started DFT, the product was being moved to all these places through dealers.
Speaker #4: But now, as we're in panel, most of the places are sales. So, it is direct sales that is happening over there.
Speaker #6: Understood. And lastly, what I wanted to understand was, how was the primary and the secondary spread during Q1? And what is it now?
Speaker #6: And how is it benefiting us at this point?
Speaker #3: See, the difference between the primary and the secondary has remained in the range of about ₹8 to ₹12 in the last quarter.
Speaker #3: With 7 to 8 rupees being the lowest end of it. And 11, 12 rupees being the latter end of it. So when this kind of difference, which was normally earlier around 4 to 5 rupees per kg, when this kind of difference rises, then the demand in the secondary product increases.
Speaker #3: And currently, our capacity being about 45 to 50 percent in the secondary market, we were able to capitalize on this demand in these quarters.
Speaker #3: In this quarter. So right now also, the difference is similar. And there is a bumper demand in the secondary market. So yes, till the time this difference remains, we shall see the demand pattern being in a similar manner.
Speaker #6: Got that. Thanks. Thanks a lot, Dean. All the best.
Speaker #1: Thank you. The next question is from the line of Sandhya from Wealth Advisory. Please go ahead.
Speaker #6: Hello. So Ella, audible sir?
Speaker #4: Yes, Sandhya, audible.
Speaker #6: Okay. So, first of all, sir, congratulations on the strong quarter. I had a couple of questions to ask. Could you please provide an update on exports and share which geographies are seeing the strongest traction, particularly after recently receiving ACRS certification?
Speaker #3: So, you were saying ACRS certification is mainly for Australia, and the traction from the certificate primarily helps us gain market share in Australia itself.
Speaker #3: And more than that, we have been opening our borders to the US and Mexico as well. So that has been a market where we've been supplying heavily as well in the last quarter.
Speaker #6: Okay. And yes, sir, our second question was related to the order book. So can you just highlight how much order book we have and what is the timeline for its execution?
Speaker #3: So, if you talk about the export order book, we have plus for the ₹75 crore order book of exports right now. And if you talk about the normal order book for the company, a quarter order book is something that usually moves around.
Speaker #3: And we work with it. So that's the kind of order we still have right now. That's about the order book situation for now.
Speaker #6: Can you just quantify it?
Speaker #3: So a lakh tons of order book is something that's always there; it's a moving market.
Speaker #2: Yeah. Ma'am, it's a dealer network market. So when we say that we are the dealer network contributes for 50 to 60 percent of our entire sales, the order book per dealer is not on a it's on a daily basis rather than on a fixed day basis.
Speaker #2: So we tend to sell to our dealers on a daily basis; that's how it is. But if you quantify the export orders and all, those we can quantify because they are longer delivery period orders.
Speaker #2: In the local market, we have to deliver every 10 days. That is how our order book keeps changing on a daily basis.
Speaker #6: Okay. And how should the investors think about the working capital and cash conversion as sales volumes continue to increase?
Speaker #4: The working capital cycles have been improving for the company. We were at about 90 days earlier, which has come down this quarter, and it's about 75 days right now for this quarter.
Speaker #4: And going ahead, we are opting for dealers, I think, as well, which will further bring down our working capital—so, our working capital cycle.
Speaker #4: So, you should see improvement in the working capital cycle happening in the coming quarters. As I mentioned again, our working capital cycle was majorly stretched because of a government base earlier and the payments being due over there for a long while.
Speaker #4: But now, as we have changed our mode and focused more towards exports and dealer network—wherein, for the dealer network, the payments are only about 7 to 8 days.
Speaker #4: So the working capital cycle will improve drastically to 35–40 days levels in the coming years. By FY 2027, we are targeting a working capital cycle of 35 to 40 days.
Speaker #6: Okay, sir. Thank you so much. That's it from me.
Speaker #1: Thank you. Reminder for all participants: please press star, then one, to ask a question. To ask a question, please press star and one. The next question is from the line of Nishita Shanklesha from Sapphire Capital.
Speaker #1: Please go ahead.
Speaker #5: Yeah, thank you for the follow-up question. I just wanted some clarification. You mentioned that by the exit quarter, you will reach close to 500 tons of sales in JTL Defense.
Speaker #5: So does that mean that by Q4 FY27, we'll reach 500 tons of sales?
Speaker #4: Yes, that's right. That's right. So, by the exit, that's correct. We should.
Speaker #5: Right. And so, the 500-ton sale—is that the quarterly sale number or on an annual basis?
Speaker #4: No, no. The 500 tons would be something we'll be doing in a month in JTL Defense. So right now, we are doing close to 120 metric tons, as I mentioned, which was the highest for us this quarter, this month.
Speaker #4: And the first month. So, going ahead, by the fourth quarter, we are targeting that we will achieve 500 metric tons per month of sales of JTL Defense products.
Speaker #5: Okay. Okay. Understood. Yeah. Thank you so much.
Speaker #1: Thank you. The next question is from the line of Dhananjay Bagrodia from Alkama Capital Management. Please go ahead.
Speaker #3: Hi. Hi, Dean. Just wanted to ask you guys, for JTL Defense, how much CapEx are we looking to do? And what is the strategy along those lines for JTL Defense?
Speaker #4: Hi Dhananjay. Hope you're doing well. So the capex over there is not the capex for now. We are just entering into the coin segment and the bullet sense segment.
Speaker #4: So for that, we had a few machines which require renovations, and a few machines between two order new as well. Because the machines required in the mint factory coin segment are something that needs to be updated quite frequently as well.
Speaker #4: And the same for the bullet shell. So the capex outflow for that kind of addition in this year would be not more than ₹15 crore.
Speaker #4: And a similar kind of capex would be expected in that company in the next year as well.
Speaker #3: So only 12.
Speaker #4: This will not change the capacity of the company; this will change the product placement of the company. For example, right now the capacity over there is close to 12,000 tons, or 1,000 tons that you can do per month.
Speaker #4: So, going ahead, when I talk about 1,000 tons a month, this is the hot mill capacity. Going forward, this product—which we are supplying to the automobile segment right now and the dealer segment, which is the copper foils and sheets—these will be converted to bullet shells and other segments.
Speaker #4: And also, towards the mint factory, which will further provide value addition to the company and improve the margins. So for that, ₹15 crore of capex is something that you can expect this year.
Speaker #4: And a similar amount in the next year as well.
Speaker #3: Right. And just to have a little broader view, just like two or three years down the line—Defense—we would predominantly see the shell company. Any revenue targets or anything in mind?
Speaker #3: Like, just like broad-based, any idea what it could be, how large it could be, what are we thinking?
Speaker #4: So it's going to be a mix of everything. I won't say that it's entirely going to be the defense company, only the bullet shells segment, because the bullet shell segment—if you talk about the cup itself—is a 4-gram product.
Speaker #4: So, it's not a thing that even if I don't have volume as well, I can see quantitatively what the entire capacity of the plant is.
Speaker #4: So, around 25 to 30 percent, which is close to 200 tons, is something that we can focus on will go towards the mint factory, which is for coins and segments.
Speaker #4: And 30 to 35 percent, which is close to 350 tons of material, will go towards bullet shells and casings. And the remaining product, which is close to 350 more tons, will be going towards the current dealer and automobile market.
Speaker #4: So, for example, we have MindaCorp, who is one of the biggest procurers of copper foils right now. There are a lot of similar automobile companies we are targeting, and we are getting healthy margins as well.
Speaker #4: So it's safe to say that 30 percent will be automobiles and dealer network, 35 percent will be Defense, and the remaining will be mint factories.
Speaker #3: Understood. Thank you for that. This is really, really helpful. And congratulations.
Speaker #4: Thank you. Thank you, Dhananjay. Thank you, Dhananjay.
Speaker #1: Thank you. Reminder for all participants: please press star and one to ask a question. Participants who wish to ask a question, please press star and one.
Speaker #1: As there are no further questions, the last question has been completed. I now hand the conference over to management for closing remarks.
Speaker #1: Over to you, sir.
Speaker #4: Thank you, everyone, for joining our earnings call. I hope we were able to answer your queries. If you have any further questions or would like to know more about the company, please reach out to our Investor Relations team.
Speaker #4: Thank you.
