Hindalco Industries Limited analyst Q&A

Thank you very much. We will now begin the question-and-answer session. The first question is from the line of Amit Dixit from ICICI Securities. Please go ahead.

I have two questions. The first one is again on Bay Minette project. So, while you indicated that the cost escalation has been primarily due to civil contribution, so just wanted to understand if the scope of work has been increased or was this something we found during oil testing phase that we had to buttress it and whether we expect more escalation due to equipment ordering or, I mean, where are we on that? I just wanted to understand if there are any more contingencies that we could expect going ahead in Bay Minette?

So, as on cost increase, 80% of this is associated with increase in civil and structural costs on the total cost of the project. . A lot to do with the soil condition where the location is, something that as we did more engineering understood requirements of quantities of concrete, quantities of steel, quantities of piling. These are all things that have driven the cost up. As we have talked about, where we are at today at $4.1 billion, we are confident that we have included appropriate levels of contingencies for a project at this stage. As I spoke yesterday, we have a P85 confidence level of bringing the project in at the $4.1 billion. As it relates to equipment, something that we are honestly better off because of the brownfield expansion in the past, we are very close to our original estimates on equipment. We ordered all the equipment ahead of building completion. We have contracted and/or finished some part, some of the equipment as we speak, and everything is well on schedule at the various equipment, and I would not expect any further escalation on the equipment side.

So, I was just saying that if you saw that this quarter, our EBITDA margins expanded. And largely, that's because I had thought that the cost would be flat, but the costs were down 3.3% Q3 to Q2. And a large part of that was coal costs coming down as well as carbon that is CP Coke, which is why with the flattish LME, our margins expanded. Now, in Q4, I am expecting the overall cost of production to remain flat with Q3.

Sir, just a follow-up on this. When I saw Coal India's numbers yesterday, their e-auction price, now, your coal cost has gone down possibly because of the inventory effect. Now, going forward in Q4, since e-auction prices, we know that at the entry of Q4 itself, they are down. So, wouldn't you expect some relief on coal cost front in this quarter?

So, really, Amit, how it works is that if we procure the end of January, February, the consumption will happen in April, May, June. So, when I give you the cost, I give you on a consumption basis and not on a receipt basis. And currently, right now, normally another question gets asked. Our linkage coal percentage has been steadily going up, and it's now nearly 60% and the e-auction is 36%. So, I have a feeling that the coal cost, I hope they go down a bit more, but I am conservatively estimating Q4 to be flat. We will have to see what how Q1 pans out.

Thank you. The next question is from Sumangal Nevatia from Kotak Securities. Please go ahead.

Firstly, congratulations, Mr. Pai on your reappointment and extension of term. Sir, a couple of questions. Firstly, just want to understand, I mean, I am not able to clearly understand what is this 85% probability of no further increase in cost? Can you explain how do we arrive at this number? Number one. I am talking about Bay Minette.And second, since there is such a significant deviation, is it possible just for some more comfort to give some breakup of this $4.1 billion? What is the civil structure costs, equipment costs, some breakup to kind of better appreciate this change?

So, to be clear, on the P85 confidence level, we have had both our EPCM, another engineering firm and a third firm take a look at the rebate lining that we have been doing over the past three months as it relates to completing the detailed engineering at a high level now. As that's completed, we are confident with where we are at from units in quantity and what we have ordered so far. From there, we would attach confidence levels as it relates to the stage of the project, the level of engineering done to be able to say, are we able to complete this project for $4.1 billion that we had disclosed and on schedule that is in the second half of calendar '26. And this shows, with those analysis done three different separate ways and analyzed by the management team, that we are 85% confident that we can deliver at $4.1 billion. On the second, as we have said, 80% of this is associated with civil and structural. I won't give out specifics, but it's a larger needed quantities, whether it be tilings, whether it be concrete, whether it be steel, whether it be electrical throughout the plant. These are some of the categories of which we have seen significant increases in as we finish the engineering design work on it. And of course, what comes with that is the inflation and labor costs on top of that too. So, again, where we have a lot more experience associated with projects like this on the equipment side where we have not seen the equipment increase except for where we have had small amounts of increase in the type of equipment that we want to put into the plant to make sure that it is highly efficient.

So, Sumangal, just to clarify, the EPC firms use this terminology like P85. So, where we areat P85 is a fairly good probability number is what I just wanted to add.

And during what phase of this next three years of construction do we move to more closer to 100%? I mean, 90%, 95%, how is this timeline?

It's linear. Obviously, as we get larger parts of the construction completed, that contingency will continue to come down. And as we talked about yesterday, we will continue to update on a quarterly basis where we are, as it relates to the construction.

And is it possible to get some sense out of this $4.1 billion, what is the percentage of equipment costs and other costs? I mean, just some breakup.

Yes. So, when you start to think about the other 20%, there is some small amounts of additional equipment that we put into the plant. You know, this is not huge amounts. It's additional piping electrical for the equipment layout as we finalize the equipment layout in the plant, its control system. It's, as I said before, the need for additional warehouses because the equipment is actually well on schedule, and it's going to come ahead of the plant construction itself because of the civil and structural engineering was behind. And so we have had some costs associated with storing equipment as well. And then, of course, as we lengthen the schedule, owners' costs as well.

That's clear. One question I have for Mr. Pai, and this is more a common question we are getting from various investors during the day. I mean, given this substantial rise in CAPEX, structurally lower returns that we expect now at least from Phase 1, I mean, was there a discussion consideration of scrapping the entire project, writing off given that, I mean, it's such a huge commitment into some bit of uncharted territory. So, any consideration on these fronts happened within? Just want to understand.

Yes, I mean it's fair to say we had a lot of discussions on this project. Sumangal, our view is the following. So, Novelis is the market leader. It's by far the largest rolling Company in the world. North America is the one market in the world that is undersupplied and is actually importing can body sheets into the U.S. coming from Asia, China. All our customers wanted this. Based on this project, we managed to get the can pricing to substantially move higher, which benefits not just Bay Minette, but our whole can portfolio going forward, which is why I think yesterday, they already, you must have heard Dev and Steve talk about $600 per ton EBITDA target going forward. So, I think that for us, the other, let's put it very purely financial metric is that a double-digit on a dollar return is still much better than the cost of capital that Novelis has. And then the next point, which you have seen, what has happened with Novelis over the last two or three years. This project, we can go from 600 Kt to double with the CAPEX of $1,500 to $2,500, depending on the mix and the finishing equipment we put in. So, you will see that the sort of double-digit can go as we go forward to much higher returns. And it puts a platform in the largest rolling market in the world, which is the U.S. So, I think that for us, we are quite committed to getting this project forward. It's fair to say that the onus is on us to now execute and deliver this as we said. I know that we will not get any more margin for error. That I accept.

Just one last question. And thanks for the detailed explanation, sir. On the copper EBITDA, we have consistently been doing more than 600 odd crores on a quarterly basis. So, is there any structural tailwind and one should expect this kind of a run rate going forward? Or is it something cyclical here?

I think that the copper business is going through some very good demand. The electrification sector is quite strong. So, I think that structurally, the copper is going to be good going forward. I do expect when the competition of some other people come in, we may see some pressures on the copper prices. But I think that, you know, that's why we have diversified our strategy and going into the copper inner grooved tubes. We are going into copper recycling. So, I think that we will continue to take go more downstream in copper to make sure that we can maintain our leadership.

Thank you. Next question is from Ashish Jain from Macquarie. Please go ahead.

Sir, I have two questions pertaining to Novelis. Now, like Steve highlighted that large part of the cost increase was driven by commodity like steel, electrical, tiling, those kind of stuff. So, is it like more volume at a better structure is what we have shifted to? Or is it that the quality of these commodities we have reassessed given the nature of the structure? That's because, you know, these commodities driving such a steep increase in CAPEX cost, honestly, as an outsider, it's difficult to completely triangulate. And secondly, you know, one of your peers, I know this question was asked to Steve yesterday also. But their CAPEX with a similar capacity is nearly half of us. So, any comment on that will be very helpful to understand how we are different versus our peer?

So, on inflation versus quantities, it is much more on the quantity side than it is on the inflationary side. I would say on the inflationary side, we had some views on cost savings that maybe were a bit ambitious, and that's coming back in now into the baseline here. But much more of it was the quantities as we started with a very low level of engineering and have built that engineering up on the same design, but on a very lack of understanding of, I think, the civil part, the soil conditions based on where we were at that has driven significant increases in quantities, as I said before, in civil work, pilings, concrete, and then ultimately steel. And so you should think about this much more on the quantity side. It's not that we have increased scope of the plant. It's unfortunate, we had a low level of engineering design done on the original estimate, and now we are at a high level of engineered design. On the second question, as it relates to the competition, again, as I said, yesterday, I won't really say much more. We can't speak to their estimates. We don't know their projects specifically. All we can do is reconfirm the diligence we put into our project and what we need for a large-scale project of this type. We have been in the aluminum industry for a long time and we are just very comfortable at the levels we are at now, and I can't really speak to theirs.

Steve, out of this $4.1 billion, can you just highlight how much is civil and construction now? I think you gave earlier that you gave the breakup of the escalation in terms of 80% and 20%. But of the total number of $4.1 billion, how much will be civil and construction? Any ballpark number you can share?

Yes. Give me a minute. We will come back.

Yes, we will come back and answer that one.

Thank you. The next question is from Ritesh Shah from Investec. Please go ahead.

A couple of questions. Sir, first, I just wanted to understand what do we make of Inflation Reduction Act. I think there are multiple schemes over here, 48C, 45X. So, I think, Steve yesterday on the call did indicate that we could potentially qualify, and we will answer this in March. I am just trying to get our thoughts basically, where do we stand over here? What sort of delta it can have? And if at all, there was this CAPEX bump, which is there, which is a bit unfortunate, but will this IRA be beyond, say, 4.1 and not 2.5 billion, and hence, there will be some positive reports on basically the remuneration profile?

So, on the first one, we have applied the 48C under the IRA Act. We think we have a very strong candidature for getting funds under this, but the decision will not be made ultimately on our application till we believe near the end of March. As we said yesterday, we have included nothing in this $4.1 billion associated with any 48C that would be granted to Novelis. Again, we are positive, but don't, really can't tell you any directionally then what that could look like. Again, I will just repeat. We have done a lot of diligence around the $4.1 billion.

The application is already associated with what we have applied to and it's always the subset of the overall number anyway. So, that's much more on the equipment piece and some other things. So, it will not necessarily change the calculation of what we can get.

Fair enough. So, basically, if I understood it right, the IRA benefit is on the equipment part. It is not on the civil and construction part. So, whatever benefit, if at all, we get, that doesn't change because of this $2.5 to $4.1 billion capex. Is that right?

That is correct.

And the second question over here is, what is the extent of benefit? Hypothetically, we can actually derive out of IRA. If I go through the fine print on the regulation, it says 30% ITC available on A, B, C, there are several variables over here. So, should one assume 30% of, say, 2.5 billion or say, if 2 billion is the equipment cost, then should one assume 30% on, say, $2 billion?

You are reading the IRA correctly, but the last time this was done in the U.S., there was Caps put in. So, it's not easy to say that it will be 30%. It could easily be capped down. It can be any number of between 0% and 30% and that's why we just can't give you a number right now. We should know here in the next month and a half.

Between 0% to 30%, that's useful. And I just want to crosscheck a data point. I think from the Alabama government, what we have got is around $135 million. Is that number correct or what we pick up from the print media or is it something different?

We will come back and confirm that number with you. I don't have it right at my hands right now.

This helps. Sir, my second question was specifically on the coal part when it comes to India. Can you highlight, sir, what is the status on Chakla as well as Meenakshi, I think Chakla earlier timeline, what we had indicated was December '23, if my notes are correct. I just wanted to get an update on both the blocks and how do we see…

December '24, not December '23.

I will correct myself. And sir, on Meenakshi, and I think there were two Meenakshi, right? So, any update over there?

And sir, what is the EC for Meenakshi West? And if possible, in timelines?

So, Meenakshi West will take about 2.5 to 3 years. And it's about 5 million tons of capacity.

5 million tons. Perfect. And sir, lastly, just with respect to ESG, when it comes to Novelis, the carbon intensity has increased because of change in accounting over there. Any comments specifically over here? And given you also alluded that we have the opportunity to go from 600 Kt to 1.2 million on Bay Mannette project . How do we look at the UBC demand-supply equation specifically in North America or in U.S.? And are we looking at any specific change in regulations which will ensure that there is an adequate supply for UBC in the markets?

So, our carbon intensity is decreasing. So, I just want to be clear with all the efforts we have put in and will continue to decrease as we commission Guthrie recycling facility and other overall million tons of carbon out of the system with that. We will continue to increase the overall recycled content of our products, including pushes in beverage packaging, auto, and other specialty products as well. So, we continue on that journey. We are in line with meeting our more near-term targets of 30% reduction off the baseline in 2026. As it relates to legislation, we are working actively with associations with consortiums, with governments directly to find ways to increase the amount of used beverage cans coming back in. The U.S. has a low recycling rates at less than 48% over the last several years. And it's very clear when you look, where there is some deposit schemes in place, the return schemes in place in those states, those recycling rates are north of 70%, and it's the remaining states that are dragging it down. So, we will continue that. That will take time, but certainly, we are very active on that.

Sir, sorry, just I will push one more. If I go through the last annual report, the carbon intensity for Novelis has increased actually from 4.44 to 5.34 to 6.19. And to my basic understanding, what I got to understand, the quality of scrap, which we had processed, it was not of the right or optimal quality and that was one of the reasons where the carbon intensity has increased. That's the reason I specifically wanted to check on the scrap probability demand and supply, are we comfortable over there?

No, it's probably more of a product mix than it is anything as we went through a shift in mix, but I can tell you that the intensity is coming down, and we can follow-up on the specific questions that you might have with Megan.

Just to clarify, as the auto percentage goes up, the recycling rates are going down, and I think that's what you're talking about, because the auto percentage has now gone to 22% when it was much lower than that. So, the can is very highly recycled, but the autos, we still are on the various initiatives to increase the recycling rates there.

I have a couple of questions. First, in terms of projects that we do in the greenfield, is it given out on a turnkey basis? Or do we operate it ourselves?

So, in the U.S., with all the active construction, there is no turnkey at this point in time. We, as owners, will take on the risk associated with that, and we evaluated that at the beginning. We do have an EPCM firm in place, have been from the beginning, and are still with us aligned with other experts as well, but it is the owner’s risk. By the way, today's industry, there is no big constructing firm that will take a turnkey EPC contract.

That's helpful. Thank you. A couple of questions on the India business, housekeeping effectively. What were the external alumina sales this quarter?

The external alumina sales this last quarter was 167 Kt. And in Q4, we are expecting more like 180, 190 Kt of alumina external sales.

And that should be the run rate going ahead, right, given that we have…?

Yes, we have got more capacity. If you remember, we did the brownfield expansion. So, yes, that should be more or less 180kt should be the average per quarter going forward.

That helps. And in Chakla, any guidance as to how much we can end up mining in FY '26?

Good question. I think we will do the box cut this year. So, next year, we will have to see how we can ramp it up. But I think at least in the first year, we should get past at least 1 million, 1.5 million in the first year.

And lastly, with the elevated CAPEX in Novelis, does the $100 million upstream of cash that we had earlier guided for still holds or that can be pushed back?

No, I think that we have kept the capital allocation framework as it is. I think $100 million doesn’t move anything one way or the other.

Thank you. The next question is from Satyadeep Jain from Ambit Capital. Please go ahead.

Just a clarification first. The engineering design was, as I understood, was done by some other firm and you got it done by some new firm recently. Can you maybe name the engineering design firm that you hired initially for the planning, and which is a new firm you have got it done with? And what is the EPCM firm that you employ for this?

No, we have had Fluor from the beginning all the way through, and they are still with us. My reference was that as we saw cost escalation, we wanted to have that audited by another firm. And so, we brought another firm in to ensure that, that we are in the right ballpark here. So, Fluor is still with as our EPCM.

Basically, saying the engineering design, the planning initially design done by Fluor. They underestimated all the civil and construction cost massively. Was it Fluor’s initial planning that way?

No, no, it was a combination of us as owners and Fluor. We announced the project because of what Satish had highlighted, customer pull for new contracts. We moved quickly as a first mover into the marketplace, and we collectively as owners with Fluor went with a very low engineered design at that point in time.

In hindsight, we could have waited and done a much more detail and then given a CAPEX number, you can say.

Just the question on the return profile you mentioned for this capacity. I just wanted to maybe see if you can possibly quantify one of your peers, obviously, the one we talking about is talking about $650 million, $700 million EBITDA without recycling for a similar capacity range. Can we assume that or given you have recycling also in built into this, would $700 million for, is it possible to quantify that EBITDA you are building in for the return expectation? And secondly, the bridge between the EBITDA for the new capacity in the existing capacity, you did talk about higher can pricing. Now, when we look at that $600 million per ton EBITDA, what is the trajectory of pricing reset in the next two years so that we get closer to that $600/ton and the gap between the new capacity in the existing one closes?

So, Indrajit, let me just try and elaborate on all the questions that you asked. The return profile of the project remains attractive. Just as a reminder, we have said that this is a mid-teens IRR project. We are saying that it has dropped a couple of points, but it is in double-digits and our confidence level of delivering double-digits against a single-digit cost of capital is very high. Number one. Number two, that when it comes to sort of talking versus what a competitor has declared, we will not get into that. What we can tell you is that we have got significantly higher pricing on this, on top of a much lower operating cost as compared to conventional plan. This is a super-efficient plant compared to any cost benchmark of existing technology and existing plants. I am telling you, therefore, two things. One is a superior pricing. The other is a lower cost. And these two together make the returns profile justifiable and attractive. On top of that, as Satish and Steve both said, that if you think about it in the longer term, and our track record even today shows that every ton that we don't create these projects for like 10 years or 15 years, we create them with a view that we should be able to expand capacity, and we know that we will need expanded capacity in not-too-distant future. This is not going to be the end. It will be, again, a super-efficient expansion at a very low-cost profile per ton. So, when you bring all these things together, our confidence and sort of the emphasis on continuing and wanting to do this project remains very high. That is what we can tell you.

On the pricing reset trajectory, given this is now going to commission in latter half of CY '26 and you will have a lot of contract and we said before that, what CAPEX is that?

And we will be able to meet all that. We will be able to meet all that because we have inter- regional flexibility. I mean, even today, North American capacities are out. We are using inter- regional flexibility from Asia to be able to meet the demand of North American customers. And if you have to do that a bit longer, we can do it. We can flex capacity out of specialties contracts because these are annual contracts. We will create the capacity because the returns profile of these projects, where contracts were committed and signed and we want to keep the, we want to honor all the obligations to the customers. We are not going to compromise on that.

We have excess capacity in both Brazil and in Korea.

And we are really even today using Asia as a supply base for North America. So, we are confident that we will not let down the customers on the timelines. This is very manageable.

My question would basically the pricing reset you see on the existing capacity. You can see tightness and which is giving a higher pricing. When you look at the trajectory of resets in the next couple of years, and that cadence of that $600 per ton EBITDA, what I am trying to get is, can it be achieved before the new capacity comes online?

Yes. So, we laid out as we got to the $525 sustainable EBITDA per ton in the 4th Quarter as we have guided, we also wanted to make sure everyone understood there is still margin accretion from the $525. We laid out that we still have drivers of price that you are highlighting here, new capacities coming on, increased recycling content in our products, continued operational efficiencies, leadership in the growing automotive market. These are the drivers that drive us upwards of north of $600/ton that we talked about yesterday. As it relates to specifically the pricing, as Dev said, the pricing of those contracts is already in place. And so, as we serve those customers and those contracts kick in over the next couple of years, we will already see that before Bay Minette comes in.

We are telling Bay Minette commissioning. The prices just keep coming.

Just one quick question on the India alumina expansion. Given the experience with Dahej and Mahan, obviously, those were remote locations and coal challenges, and now the initial engineering design here, when we look at alumina expansion, it is right next to Utkal. Can there be confidence that the number you have given about $1 billion for that expansion will be fairly reasonable? And given the cost inflation in the balance sheet you are looking at, could there be a delay in that expansion?

So, I will tell you one thing that right now, the way we are learning from our lessons from the past is we are actually doing the full detailed engineering before we even start the project in a big way. So, currently, what's going on in Kansariguda is that we are doing the forest clearance, getting Stage 1, Stage 2, doing the R&R, and doing the engineering. And I think that as soon as the engineering thing has come because when I give you my annual India CAPEX outlook, then I will clarify exactly how much we are spending.

Thank you. The next question is from Pallav Agarwal from Antique Stock Broking. Please go ahead.

Just on the level of domestic aluminum hedging, so how much are we hedged and at what rates?

As I said, in Q4, we have 22% hedged at $2,636 per ton, and we have 15% of the currency at 85.19.

Also, I mean, we have given the guidance for FY '24 Novelis CAPEX at, I think, $1.4 billion to $1.6 billion. But given that the costs have escalated, so, is there any phasing of the balance outlay out of the $4.1 billion over the next two, three years? What levels of CAPEX can we look at?

So, good question. Let me just give you some guidance for your modeling. So, in the next 2 years, nothing has happened until the end of fiscal year '25 in terms of having to depend on any cash raise. But in the next, let's say, 2 years, we will raise some bridge finance. The CAPEX will be higher, and we will come back with guidance. We typically give guidance on CAPEX as we announce the full year. So, we will come back with guidance, but obviously, the CAPEX will be more elevated. But the guidance that I would like to give you is that, as we end this year, we will be at a net leverage of below 2.5x. Remember, we are at 2.7x now. We will fall below 2.5x. And from there, with the increasing CAPEX need and some bridge finance need, we will elevate it up to around 3x, that will come much later after about 2, 2.5 years. So, that's the best guidance I can give to you now. Assume that we will need to go around 3x on our net leverage as the project spending goes up. That's really the way to think and model.

I think we can assume that. And remember, if aluminum prices go up, our margins also go up. So, basically, it works both ways. So, we don't have any big concerns on that for the guidance that we have just given you on the net leverage.

Steve, there was one question that people had asked. Of the total 4.1, what is the percentage of civil and what is the percentage of equipment and the rest?

So, approximately 65% of the project costs approximately are civil and structural. Then you have equipment. Obviously, that's going to make up about 25%. A little bit more EPCM costs, owners' costs and other direct costs, warehousing and other things.

Thank you. We move to the next question. The next question is from Vikash Singh from PhillipCapital. Please go ahead.

Sir, I just wanted to understand, given that now we have an inflated CAPEX on the Novelis side, does our plans on India, for example, the Aditya Mahan brownfield expansion of the aluminum plant would take a backstage?

No, I would not say backstage. I think that, see, in India, we have actually quite a lot of strong cash generation. And I think that at this stage over the next couple of years, in fact, in my prepared remarks, I said we will stay within our cash generation for our CAPEX.

But that is more on the value-added side, right?

No, no. That's in overall. See, we are sitting with about ₹11,000, crores of treasury. Normal treasury that we should keep is about ₹6,000, ₹7,000 crore. And the cash generation that we have, we have a capacity to easily do a CAPEX of about ₹6,000 crores, ₹7,000 crores a year without having to borrow.

Sir, just one more question on the coal side. Given that some of the competitors are a little bit ahead in terms of reaching full self-reliance, as per our plans, by when we think that we would be able to have a full captive coal which we are expecting?

That's a good question. I think that probably it will take us at least two more years to get there. Now, the only thing I will tell you is that overall, as more and more commercial coal comes in, Coal India prices and linkage prices are also going to stay soft. So, I think, overall, I don't think we will be at a disadvantage when it comes to coal going forward. The biggest challenge for the aluminum industry is to increase the amount of green aluminum and hence, what percentage of renewable can you get in the mix. Because you have to remember, going forward, you are not going to be able to export aluminum if it's not a low carbon metal.

Yes, that's correct. Sir, just one more on the follow-upside. Once we have Chakla, Meenakshi all these kicking in, do we have chance to surrender the four coal mines which we have purchased on this first round of auction, and that was very costly to us?

It's a good question. Thanks for reminding. So, Garepalma 4/5 has been legally returned and accepted by the government already. And Dumri has also been returned and accepted. So, out of the four, two already been returned. So we have Kathautia and Garepalma 4/4 remaining. The next one we will probably return will be Kathautia.

Thank you. The next question is from Kirtan Mehta from BOB Capital Markets. Please go ahead.

Going back to the Bay Minette, couple of more clarifications. Would you be able to also give a split of $750 million that we are targeting to spend by FY '24? And second question was, we have discussed about sort of increase of the expansion being done at $1,500 to $2,500 per ton capital intensity versus the Phase 1, which is done at $6,800 per ton capital intensity implied basis. So, what are the specific components of infrastructure that has been created in Phase 1? Could you give a bit more color around it? Land, civil infrastructure, what sort of things that we are already doing in the Phase 1, which will support lowering the capital intensity for the next phase?

So, I will answer that question, and then I will let Dev come back to the $750 million. So, in the $1,500 to 2,500/ton Capex, we have got many projects. You can see them on our slides over the history that we have been able to debottleneck the facility at much, much more efficient capital cost, what we have been traditional client brownfield cost. The entire infrastructure layout of this is already in place, electrical utilities, land is already there. What need in a hot mill that has more capacity, and that's the most expensive part of all the equipment that we have. And so what we have to do is add either equipment in front of the hot mill or on the back end of the hot mill depending on what product mix we want to get out in order to get more capacity out of the hot mill. The biggest equipment piece when we really want to size itself will be an additional cold mill. But when you start to think about $1,500 to $2,500, as I talked about civil and structural in a percentage, in a brownfield expansion, the equipment will be the majority costs associated with the expansion. That's why you can be so much more efficient in the brownfield debottlenecking. Hope that helps.

On the $750 million that we expect to close by the end of this fiscal, you can take it that the largest part of this is civil because right now, you know, we are making the foundation pilings. We need steel. We need concrete. So, for all purposes right now, it is basically a construction stage, civil construction stage project, and you can take it that almost the entire spend is towards civil and construction.

Equipments down payments, but that's relatively small. So, yes, civil and construction is a lot.

Thank you for this color. One more question on the India side, if I may. In terms of the EBITDA per ton that you have clocked around $880 per ton, do you think that this sort of EBITDA run rate is sustainable over the next couple of years? Or is it sort of higher than the sustainable average that we are seeing?

Well, I hope it can go higher. I mean, at $880 and I think we can maintain this. See, right now, the costs are sort of, we have got to some lower costs. I think now we need for the EBITDA to go up, the LME to move up. So, really, right now, EBITDA per ton is more dependent on the LME than our cost structure. So, I hope, I think that over the next few years, all the projections and all do say that once the economies and geopolitical things get sorted out, both copper and aluminum prices should head up.

Or would the cost deflation make the aluminum price also sort of remain at this level? Do you see that as a risk by any chance?

No, I don't think the cost of aluminum drives the demand for aluminum. I think aluminum is a traded commodity. It's given by LME trading, not from a cost-plus basis. So, I think it's supply and demand of aluminum that will drive the pricing of aluminum. As you see, supply and demand is very tight. The inventories are less than 10 million tons, which is of 50 days of consumption. It used to be 90 before. So, supply and demand is quite tight. I think it's a negative overhang of geopolitical events, slowdown in Europe. These are sort of holding the commodity price.

Thank you very much. We will take that as the last question. Participants whose questions have not been answered or pending questions may get in touch with the Hindalco IR I would now like to hand the conference back to Mr. Pai for any closing comments.

I thank you for your attention. I do think that, you know, I want to reiterate that the quarterly performance that we just announced shows the trend of quarter-on-quarter operational performance that we have been putting. And I also do want to reiterate that whereas Bay Minette CAPEX has gone up, let's not lose sight of the overall big picture. This is still a very good project. It's giving double-digit IRR, which is better than the cost of capital. And it gives us a platform that will cement Novelis' position as the largest aluminum player in rolled products in North America. So, with that, I thank you for your attention, and wish you the best

Thank you very much. On behalf of Hindalco Industries Limited, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.