Thank you very much. And the first question is from the line of Miraj from Arihant Capital.

Congratulations on a great set of results. Sir, just to start with the bookkeeping questions, sir, if you could let me know the volume split between India and U.S. line pipe business?

Sure. So basically, the volume -- sales volumes that we have reported, India plus U.S. put together is about 290,000 tons. And India will be close to about 170,000 tons and balance is U.S.

Understood. Okay. So secondly, we've come up with this announcement of putting up a DI plant in the Saudi unit. Wanted to understand a couple of things over here, for the money that is to be invested, will we be putting any equity up there which would lead to our stake getting increased. And secondly, what would be the assets going forward for this? I know that it's still a long way from your, just to get a brief understanding on that part.

So Miraj, our announcement is referring to Middle East region, not to any particular country. And we are looking at 2 options and exploring both the options simultaneously. And it will not be through the East Pipes company, the associate company. This is on our own on Welspun Corp. So we see the DI market in the region as a very strong market and a very growing market, comprising of 4 to 5 large economies in that region. And that is what is driving us to enter that market.

Understood. Sir, I was also looking at the FX financials in Q3 and 9 months, we've done a pretty good set of results over there. But when I look at the cash flow generation, cash flow from operations, it has been negative to -- and in fact, it has increased, if I were to look at for 9 months. It is currently at SAR 488 million negative. So what would be the reason? Where is the money being getting stuck over there? Is it because of larger trade receivables? Or what would be the reason for this?

So EPIC is doing phenomenally well. As you can see that all the P&L numbers, their revenue growth, their bottom line operating margins, all are phenomenal. And even their outlook with a strong order book. So they are booked for more than 2 years. Now your question on the -- probably on the cash flow side is because of that strong order book. Obviously, they have to invest into the working capital as well. So that's the reason why you are seeing this, but as these orders start getting executed, you will see the cash flows coming through and then the cash flow will catch up with the EBITDA numbers.

Understood. And on the current order book that we have, if I were to look at the bid book, which is coming down and the order book also sequentially, it has come down. I wanted to understand on the U.S. side of business, are we expecting any large order in the Permian basin to be booked?

So our U.S. order book at the end of December stood at almost 206,000 tons, which will take care of our H1 for the calendar 2024. Then for the second half of calendar 2024, there are a couple of opportunities. And we expect that these will get concluded in a phased manner over the next few months. So we are very confident that we will secure the b usiness continuity in U.S.

But those won't be reflecting in the bid book now? Is that the right understanding?

Yes, yes. But let me say that the U.S. our business outlook is extremely positive because of the drilling activity in the Permian basin and the gas that needs to be evacuated from Permian basin to the Gulf Coast ports from where U.S. is exporting LNG to all over the world, largely through the Western Europe P&L as well. So for U.S., they have attained the peak position when it comes to the global LNG market. And obviously, U .S. is not going to surrender this business position. So for us, as a line pipe manufacturing company, we see that there will be more than a couple of new gas pipelines that will be coming up. And we are the largest line pipe manufacturing company in the U.S. So we will obviously get our fair share of the market as and when these orders are awarded.

Excuse me, sorry sir to interrupt, May I just request you to follow up the queue as several participants are waiting, please. The next question is from the line of Pritesh Chheda from Lucky Investments.

Yes, sir, just from your opening comments, for the Saudi market, if you could give what kind of opportunity in front that you see in the line pipe over the next 5, 6 years, considering the water and the historical oil related spend that they do. And what is the -- what was the line pipe's annual market for Saudi?

Sure. So the Saudi market is -- I mean, in 1 word, if you have to say that is really looking phenomenal. Both for line pipes, we have water applications as well as the oil and gas applications. So EPIC, our associate company has an order book which goes beyond 2 years, and that's a very strong position. And not only this, but the outlook also continues to remain very bullish over there, with their Water Department Ministry announcing a huge focus on the Vision 2030 and investing heavily in improving the water infrastructure. So the Ministry of Environment, Water and Agriculture, they recently announced an allocation of USD 80 billion towards water projects within the coming years. And they are expecting 90% of water demand to be met through desalinated water by 2030. So all this is appearing very positive to us, and it's getting mirrored in the order book that EPIC is carrying also. Just to add some time back, EPIC got SAR 1 billion of order from SWCC. That's for the water pipeline. So in a nutshell, it's a very positive outlook in Saudi for our associate company.

Okay. Can I conclude 1 thing here that water was not a large demand generator until, let's say, 2, 3 years back and now because oil and gas infra spends have been continuous for them, right? Is that a conclusion which we can take or...

No, that is not the correct conclusion. So if you see over a longer period of time, let's say, about 6, 7 years, -- then probably in Saudi, the water and oil and gas demand gets almost equal. But each year is different. So I can tell you in the last 3 years in Saudi, we have been able to get more orders on the water side. If you go back prior to 3 years, when we had some very large orders in oil and gas side. So -- but by and large, you can say that the market is equally divided between water as well as oil and gas. And as far as our EPIC's order book is concerned, we have a healthy mix of both.

Okay. Will the market be significantly bigger than what you have experienced annual market size will be si gnificantly bigger than what you have experienced all these years in your Saudi business considering Saudi's focus, higher focus on water spend?

And my last question is on the India market. What will be the India line pipe market volume growth rate over the next 3, 4 years in your opinion?

So in the India line pipe, we broadly have 3 categories. We have the domestic oil and gas, then we have the domestic water and then we have the exports. In different years, the mix obviously keeps changing depending on the type of projects that come on the table. We see as of now, a very good potential for more export orders. So that is where the margins are also very high and it helps the P&L in a substantial way. In the domestic oil and gas, also, there are a few projects that are coming up, but more so on the CGD front. So on the City Gas Distribution, we see that the demand will remain robust. That's for the ERW pipes. And we will continue to get our fair share of the market here. In the domestic wate r as well, there's a lot of focus on irrigation and pipelines and state governments are also really increasing the spend supported by the central government. So there also, we see a very good traction on the domestic water side. So all the 3 aspects in the area line pipe business are looking positive to us.

Okay. In this, can I conclude one thing that in India, the water and the oil and gas is where it must have been extremely slower volume growth incrementally? A lot of the India growth wil l be turbocharge by the export poly?

No, it's not like that. I think all the 3 are contributing to the growth. But exports are obviously better at the margin side.

The next question is from the line of Vikash Singh from PhillipCapital.

Sir, I just wanted to understand this quarter's EBITDA per ton drop. While we have done much bigger volume in India, still the EBITDA per ton got dropped. So is anything specific in the number, which has led to the decline despite better volumes?

See, Vikash, now India EBITDA per ton, that number is not really visible from the published results but I'll tell you why. The India stand-alone results that you are seeing are including even Welspun Metallics Limited now because now the legal merger has been completed. So Welspun Metallics is where we have the hot metal production and also the peak sales. So hot metal goes into the DI pipe manufacturing. So because of this, you cannot really calculate the EBITDA per ton for the line pipe business of India. But let me tell you the answer to your question. In India, we typically do anything between 5.5 lakh tons to 6.5 lakh tons, 7 lakh tons per annum in the total line pipe volume. And the average EBITDA per ton works out to close to INR10,000 a ton. So obviously, each year is not identical. But by and large, this is the set of numbers. So like if it's a 6 lakh ton volume in India, then that would translate to about INR600 crores of EBITDA. This, of course, comprises of th e exports business and domestic water and domestic oil and gas. And we are pretty much on the similar lines, Vikash, even in the current year.

Understood, sir. Sir, my second question, pertains to our order book basically, especially in India, since probably we are entering in the election season. And at the same time, 4Q is the high -- best execution period as well. So do we see that we would face a little bit challenges in 1Q FY '25 or 2Q FY '25 because now order book addition temporary could drop down because new orders would be -- new order would not be coming while our execution, it would be very strong.

No, Vikash, we don't see any of those type of issues. So our order book is, as we said, 5,75,000 tons as of now. You can say a little drop U.S. is about 200,000-odd and the balance is in India. And we continue to add more orders to this as well. So -- and this anyway gives us visibility easily for the next 6 months or so.

Understood, sir. And sir, just last questi on regarding our capital allocation. So given that U.S. continuously announcing new CapEx, including the MoU signed on the Sintex side. So what is the total CapEx we are expected to spend in FY '25? And how does our best movement would look like?

So I'm very glad, Vikash, that you asked this question because we wanted to talk on this anyway. See, the capex is that we have already announced as of now, they are approximately adding up to about INR1,800 crores. And these are already in the public domain. These will be spread over at least 2 fiscal years, 2, 2.5 fiscal years. So it's not like we are doing all the capex immediately. By and large, the capex is focused on 2 areas. One is clearly Sintex. And our game plan for Sintex is a very large strategic vision for it. We had announced our capex of INR800 crores for Sintex Telangana sometime back. And our strategy is to enter into our plastic pipes business using the Sintex as a gateway. And we are looking at as a pan-India presence. So we are not only looking at Telangana, but we are looking at multiple locations across India, where we'll be evaluating, setting up manufacturing facilities. So that's 1 area where you will see capital investments going in, in plastic pipes and Sintex. The second area where our investment focus will remain is DI. So we believe that ductile iron pipes have -- is one of the sunrise industries and in India also and even in the Middle East region. So we have announced capex in India for expanding our DI capacity at Anjar.

Ladies and gentlemen, management line has been disconnected. Please stay connected. We're connecting them. Management line has been connected. Please go ahead, sir.

Okay. Yes. Vikash, you are there?

So we're answering your capital allocation question. So we spoke about...

You were on the DI side and then suddenly you got dropped.

DI side also, we have announced capex of INR300 crores for expanding our DI cap acities at Anjar. And we also announced about the Middle East region yesterday for about INR500 crores. So that also adds up to about INR800 crores. So you can say roughly INR800 crores in DI and INR800 crores on Sintex and plastic pipes. So we are looking at about INR1,600 crores plus maintenance capex of about INR150 crores. So close to about INR1,800 crores spread over 2 to 3 years. That's our plan. And with the strong free cash flows that our businesses are generating, we don't see this funding of this as any issue.

Understood, sir. And sir, just lastly, on the ABG Shipyard...

Excuse me, sorry to interrupt, sir. As several participants are waiting in the queue, please follow back in queue for further questions. The next question is from the line of Bhavik Shah from MK Ventures.

My question was on ABG Shipyard. So I just wanted to understand, we invested around INR650 crores to INR700 crores there. What kind of money you have made from the scrap sales till now? And what kind of money is still pending to be received from the sales? And what are we thinking there? What is your plan of action there?

Sure. Bhavik, as we have said in the past as well, our first priority is to monetize these assets. So we have co me close to 60%. 60% of this has already been liquidated. We have monetized this as well balance also, we'll be able to do it in the next 3, 4 months. So...

Can you quantify the amount, how much is like -- what's amount you have got till now? What's the amount you're expecting to be received?

As I said, it's about 60% plus has been already done, and the balance will be done in the next 3, 4 months. And at the end of it, we would be able to collect more than what we had invested -- so it is a positive to the bottom line.

Okay. And sir, do you have any other assets over there like land bank or anything which we are planning to sell there?

What I was telling you was for the other metal assets, which were there and we are liquidating. But of course, there is the land bank there. There is the infrastructure there. So all those assets in a way, become free of cost on our balance sheet because we would have already monetized whatever we had invested by just liquidating the metal scraps. So that removes any load on our balance sheet completely. And we will decide what to do with these land bank and these assets. So we are looking at multiple options. As of now, we don't have any plans to announce. But please be assu red that there is no weight coming on the balance sheet because the complete investment will be monetized.

Right. Sir. And just on the Sintex front, what is the plan? Like can you just elaborate a little bit over there like when are you going to enter the market or anything?

So we already announced about the Telangana project, and it's going to be now pan India presence. There will be other locations also getting added. We will, of course, ration out our CapEx in a very judicious manner. And we'll be entering the plastic pipes market in the near -- foreseeable future.

Okay. So like any plans to like what are the timelines -- any timelines in place?

So these are obviously greenfield expansions. So they will take at least 12 to 18 months horizon to get into the market.

The next question is from the line of Bhavin from Enam Holdings.

Yes. Bhavin here from Enam Holdings. Congrats on overall good set of numbers and continuous ramp-up in new businesses like DI Pipes and Sintex and all that. A few questions. First, on the DI pipes Middle East project, INR500 crores project for 150,000 tons. So will this be backed by blast furnace for pig iron or you are just putting up a DI pipe plant there?

So Bhavin, as of now, what we have announced this amount that you are seeing, it's an approval taken from the Board, okay, for further exploration. We are actually having 2 options that we are looking at and simultaneously working on them. But to answer your question specifically, it's not the blast furnace route. It's basically the DI. Will get fine tuned later on.

Will you be procuring steel from open market?

Yes, yes.

Second, on again, the Slide #42, where you have given targets for FY '26. So the DI pipe side assume 450,000 is this assuming Indian volumes and Middle East is not considered there.

Correct. That's India. So as you know, we had capacity of 4,00,000 tons in DI, and we are adding 1,00,000 ton with the Anjar expansion. So capacity becomes 5,00,000 tons.

Right. And line pipes volume includes Saudi volumes, or these are excluding Saudi volumes?

I think Bhavin you know we are -- basically, we are talking about India and U.S.

So U.S. plant order book is at about 200,000 tons odd at the end of December. And this will take care of H1 for calendar 2024. Then for the second half of the calendar 2024, there are a couple of strong opportunities and expecting that these will also get concluded in a phased manner.

So we are at 2,00,000 tons dispatches would be including Quarter 4 and first half of next year, so over 3 quarters?

We are talking of the H1 calendar 2024.

The H1 calendar 2024, so the next 2 quarters. Okay, okay. And these are largely spiral orders -- includes some ERW orders also?

Both. Both. Both put together.

And already, I think your bid book is strong, so you are confident that you will be able to get orders, which will take care of second half.

Yes, yes. We'll secure the business continually.

Last one on the DI pipe order book, which looks very strong. And if you have seen other players also, which are reporting very strong numbers and strong order book. So I'm assuming this 2,54,000 order book is for next 2 to 3 quarters, will it get executed?

Yes. Potentially, yes. See, it is not the demand, which is a constraining factor. So demand is very robust. And if you want, we can increase our order book even today as we speak. We are being cautious as our production is getting ramped up. And that ramp-up is now clearly visible in the numbers. So the efficiency is improving, the quality is improving, the rejection rates are coming down.

So backed up on coking coal on this because you have a blast furnace for Indian facility. So how is the coal tie-up done or procure?

So these are all the commodity and we purchase it from the suppliers. So these are market prices.

So normally, we have 1 month inventory or we keep large inventory there.

Generally, the market practice is 3 months inventory.

3 months inventory. Okay.

The next question is from the line of Miraj from Arihant Capital.

No, Miraj. We are evaluating various options. But as of now, nothing has been planned.

The next question is from the line of Pranay Gandhi from Green Portfolio.

So on a very general terms, I wanted to understand that considering the fact that the order book for EPIC is already booked for the next 2 years. So are we looking at some sort of expansio n. The underlying reason for this question is that generally, even if we get a new order, it would be served beyond 2 years, and they will certainly be clients who would want the order to be delivered sooner. And in a way, we are losing out on those orders . So how do you see that side of the business?

See, Saudi is that way, a very mature market, and the key customers like whether it's Aramco or whether it's SWCC, when they come out with projects and they put them out for bid and invite the quotations, they also look at the capacities, which are existing in the kingdom. And then they come out with those projects in a very judicious timed manner. And these are all long -term projects. So some of them go over 2, 3 years as well. So it's not a market, which gets overly crowded like suddenly a spate of projects will come up and capacity will not be there. It doesn't happen like that because of the maturity of the market and the maturity of the customers.

Fair enough. And so since w e are already on the track of exceeding the revenue target for this year, how do you see business shaping up of sales in the next 2 to 3 years in terms of the volumes or the revenue?

So I think over the next 2 to 3 years, we see our line pipe business holding steady and continuing to grow in India, U.S. and Saudi. We see exponential growth coming from our new businesses. So that is the DI pipes then also the stainless steel, Sintex. These will be the future engines of growth for Welspun Corp.

Okay. And sir, could you please put a number to it if possible?

So I think our investor presentation already gives you that. I think there is a slide, which gives you visibility rather projections till FY '26. So if you look at that, the line pipes is showing projected at about 1.2 million tons for FY '26. DI is projected at about 4,50,000 tons for FY '26. Stainless steel pipes is projected at about 8,000 tons for FY '26 and stainless steel bars at about 65,000 tons for FY '26. So I think we have put out a broad vision for the next 2 years. We don't have a specific guidance to give you as of now. But clearly, growth is a way of life at Welspun Corp. And you will continue to see the company growing.

My question basically was just answered by the previous caller. What we really wanted was a ballpark figure for the utilization at your Saudi entity or associates. Just to understand the capacity for winning projects on the short term. I mean are they in the high 90%, let's say 60%, 70%, just a rough numbers, just for us to understand.

So your question is for capacity utilization at the Saudi associate?

Yes. But just a ballpark number, if you don't want to give the figure. Just to know, let's say, they are in the 50s or the high utilized, just to understand.

Yes, yes. Now that they have an order book going beyond 2 years, obviously, they will be in a very good capacity utilization number.

The next question is from the line of Radha.

Sir, in the PVC pipes that we are looking to expand, I wanted to understand whether we are looking to supply more to the agri segment or the non-agri?

Both these segments will be addressed. So the entire market for the plastic pipes, and we are looking at OPVC, we are looking at UPVC, HDPE, the complete gamut of plastic pipes is our target. And it will be a pan-India presence. So it will be not just Telangana, but we'll be setting up operations at a few more locations as well. And the objective is to really enter the market in an impactful significant manner.

Okay. And sir, secondly, Sintex water tank business. So could you tell us when ca n we see significant pickup in the utilization in the water tank business?

So the water storage tanks business, which is the traditional business of Sintex, it has also been doing well. They have been showing growth as well there. And along with the plastic pipes capacities that we'll be putting up at pan -India locations, we will be obviously putting up WST capacities as well. So there are a lot of benefits when you can combine water storage tanks as well as plastic pipes together in terms of logistics and shipping costs and all. So both the areas of WST as well as plastic pipes will be growth areas for Sintex.

Sir, lastly, given that we are trending in the Middle East region for the DI. So you mentioned that demand is very strong on this $80 billion opportunity coming up. So could you tell us what is the total size of demand that will be generated for the DI pipes in India? And what that will be adding any addition to the current demand scenario in the Middle East region.

So the DI market in the Middle East region is growing rapidly. And we see that the current local players who are there, they are not able to cope up with the quality and the output that the demand is requiring. So it's actually quite a few imports coming into that region from other countries. So we see that by setting up a DI facility inside the Middle East, we will be able to at least immediately replace the imports and able to get a quick market share. And since there is growth there, we'll be able to scale up our operations also rapidly.

Overall the local players you are talking about?

There are quite a few local players there in different -- there are 3, 4 large markets inside Middle East region. So those are mostly domestic as well.

To answer the customer that will be targeting for DI, will it be similar to the extra customer? And these are -- will this benefit for us in terms of approval cycle given that in the customer profile could be similar?

The East Pipes Company is a completely separate business of line pipes and the DI pipe that we are talking of Welspun Corp on its own is also completely separate. So we don't see them really mixing anything with them. There might be some synergies in terms of customers, whi ch, of course, we will leverage on those synergies. But otherwise, the DI pipe business will be completely different venture from the existing East Pipes Company.

The next question is from the line of Dinesh Kulkarni from RDST.

Congratulations on a good set of numbers. I have a question on the DI pipes in the Middle East. Can you just explain the market here? Like how big is the market? And where do you see it's going in the next 3, 4, 5 years? And what could be a targeted market share you are looking at?

See, the water infrastructure market is quite strong, not only in KSA, but in the Middle East region also. If you talk specifically of KSA just as an example, then the Vision 2030 also has been investing heavily on i mproving the water infrastructure. And we already spoke about the Ministry of Environment, Water, Agriculture, which announced allocation of USD 80 billion recently. So I think all these are very strong signals that are coming up in terms of the water business. DI pipes as well as for line pipes. Line pipe is getting catered by East Pipes company, there is new DI business, which we will set up somewhere in the Middle East through our own wholly-owned subsidiary.

And do you need any debt on this further, like or this is enough for the time being, what you expect?

Sorry, do you need any?

Have you to raise any other capital equity or debt capital apart from this INR500 crores which you are investing right now?

Okay. And then what kind of an asset turn you're looking at in the next year...

Excuse me, sorry to interrupt, sir. We request you to return to the question queue for follow-up questions. The next question is from the line of Aasim from DAM Capital.

Yes. Just 1 clarification. The CapEx number that you talked about INR1,800 crores, for Sintex, it was INR800 crores. Can y ou just elaborate more what are, INR800 crores will be spent on, any breakup within that?

Sure, sure. So see that INR800 crores was announced some time ago, which was for the plastic pipes in Telangana. Now we are looking at in a different way . We are looking at setting up a pan-India, so there will be multiple locations, not just Telangana. Telangana will be one of them. And cumulatively speaking, we'll be spending an amount close to this, but not just Telangana, it will spread over into diffe rent products, all plastic pipes, so whether it is UPVC, whether it is OPVC, all inclusive.

So actually 4, 5 plants, we'll be spending INR800 crores in total?

Yes, you can say that, pan-India.

Ladies and gentlemen, due to time constraints, we take this as a last question. As that was the last question, I now hand the conference over to Mr. Sailesh Raja from Batlivala & Karani Securities Limited for closing remarks.

Yes. Thank you all for attending the session. We especially thank the Welspun Corp team for their time. Percy sir, would you like to make any closing comments?

I think -- thank you for arranging this call, and thanks to all the participants for attending as well. And I hope you have answered all the questions. If you have any further queries, please feel free to contact Goutam or Salil and will be really happy to assist you in this regard. So all of you to have a great day ahead. Thank you.

On behalf of B&K Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.