Indian Metals & Ferro Alloys Ltd (IMFA) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator (Adfactors PR): Ladies and gentlemen, good day and welcome to Indian Metals & Ferro Alloys Limited Q2 and H1 FY27 earnings conference call hosted by Adfactors PR. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Bhallada from Adfactors
Moderator (Adfactors PR): Thank you, and over to you, sir.
Vishal Bhallada (Adfactors PR): Thank you, Yusuf. Good evening, everyone, and thank you for joining us today on the Indian Metals & Ferro Alloys Limited's earnings conference call for the second quarter and half year ended 30th September 2026. Today, we have with us, Mr. Subhrakant Panda, Managing Director; Mr. Saunak Gupta, Chief Financial Officer; and Mr. Bijayananda Mohapatra, Whole-Time Director and Chief Operating Officer. We will begin the call with the opening remarks by Mr. Subhrakant Panda who will provide an overview of the company's business performance, the operational developments, and the outlook on the business. This will be followed by the question and answer session. Before we begin, I would like to remind everyone that certain statements made today or discussed on today's call may be forward-looking in nature and should be viewed in conjunction with the risks and uncertainties that the company faces. A detailed explanation of the risks is included in the earnings presentation that has already been shared on the stock exchanges. The company does not undertake any obligation to publicly update these forward-looking statements. With that, I would like now like to hand over the call to Mr. Subhrakant Panda. Over to you, sir.
Subhrakant Panda (Indian Metals & Ferro Alloys Ltd): Thank you very much. And good afternoon, ladies and gentlemen. A warm welcome from my side and on behalf of IMFA to this investor call for Q2 FY '27 results, which were approved by the board a couple of hours earlier. I will keep my opening remarks brief, and then jump into the into the Q&A session, which is, I think, the most you know, which is where most value is there for for you as well as for us. In terms of our Q2 performance and H1 FY '27 performance, these are noticeably higher than the corresponding periods from the previous year. And that is, of course, on account of two things. One, that there is significant capacity addition which has come online, and secondly that prices in general have have been better than they were in the corresponding period last year. In terms of capacity, as you know, we have we started operating KNR 2, which is the unit acquired from Tata Steel, we we started operating that from March of this year. We have steadily increased the production over there. Initially, in the first half of the year, production was slightly lower than we had planned, and I had shared the reason for that in the last call, which is that in two sets of transformers in two furnaces, the transformer parameters were not ideal and therefore, we were limiting load a little bit. But I'm glad to report that in the month of October, we have reached a rated capacity of roughly about 84,000 tons per annum production, which will go up to the full rated capacity of about 100,000 tons per annum from the existing four furnaces by December, when we will complete the changing of the transformers in the two furnaces. That being said, as far as our greenfield unit is concerned, KNR 1, the first furnace achieved hot metal tapping in on August 25th, and we have already initiated pre-commissioning activities for the for the second furnace, and we are expecting hot metal tapping around the 15th of November, give or take a little, a few days, but we are there and thereabouts, which means that we will you know, we will we will third quarter is a significant, I think, period for us where we expect to cross 100,000 tons of output in the quarter for the first time. I think market continues to be you know, to be strong. While prices have moderated a little bit you know, from Q1 to Q2, and we see a slight moderation happening in Q3 as well. And equally, I think, certain raw material prices like metallurgical coke are starting to move up. But again, that is not unexpected when you see you know, significant margins in the in the ferrochrome industry, then upstream there is a tendency for prices to raw material prices to move up a little bit. Luckily, we are mostly sort of insulated from that because the biggest impact comes from chrome ore, which is, of course, in-house for us. But even with a marginal moderation of margins going ahead, we have more than sufficient volume to
Subhrakant Panda (Indian Metals & Ferro Alloys Ltd): in that, in absolute terms we we outperform. But overall, I remain confident about about where the industry stands. While South Africa is scaling up output, but we expect that China will, I mean output of ferro chrome from China will will reduce. So we remain confident about the industry and we remain especially confident by God's grace about about IMFA's own position where we have worked very hard to to build resilience and competitiveness into into the business model and we are realizing the benefits of that now. One quick point, we are we have of course you would have seen in the press release that the board has approved a capex of about 375 crores for two things, one to increase the chrome ore raising from Mahagiri underground mines from 6 lakh tonnes to 7.5 lakh tonnes. Eventually this will take our total output beyond 1.2 million tonnes which is what I have indicated earlier in phone calls and and interactions. And secondly, we have also announced a capex for low-carbon ferro chrome. For producing low-carbon ferro chrome, which is of course a a value added product which will you know, bolster margins and diversify the product basket. So, that's broad overview of the business and I think it will be good to get into the Q&A now.
Moderator (Adfactors PR): Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only handset while asking a question. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the question queue, please limit yourself to two questions only. Should you have a follow-up question, please rejoin the queue. Ladies and gentlemen, we'll now wait for a moment while the question queue assembles. Participants, to ask a question, you may press star and one. First question is from the line of [inaudible] from 7seas. Please go ahead.
Joy Shah (Seven Seas): Congratulations for diversifying into low carbon Ferro chrome. Great that will definitely improve our margins. And question is I would like to have update about critical minerals. I think I understand that we are trying to get some critical minerals mine in the auctioning. So kindly let us know what is happening around this critical mineral front? And one more thing I've come across the report that IMFA is planning to go beyond smelting of 5 lakh tonne. So earlier you had said that after 2029 once we know result of underground mining of Sukinda new underground mining of Sukinda we will know extra output and then based on that we will be planning for expanding capacity beyond 5 lakh tonnes. So kindly give us some thoughts on this items also. Thank you.
Subhrakant Panda (Indian Metals & Ferro Alloys Ltd): Thank you for your kind words on the on the performance. As far as critical minerals is concerned, there is no update at this point in time because while we have participated in a couple of auctions prior to, I mean leading up to today, but we have not been not been successful in terms of a breakthrough. And of course, as you know that critical mineral auctions you know, happen on a you know, from time to time. So, we remain alive to the opportunity. That is a area of of interest for us. And we hope that sooner rather than later, we will be able to break through. But nothing to report at this point in time and I wish to clarify one point very clearly that not just with regard to critical minerals, but our overall approach to capital allocation is very clear, that we will only allocate capital when we see when we are confident about you know, our ability to to add value and create value for for stakeholders. So we would only move ahead on any opportunity if you know it meets certain criteria. Secondly as far as our smelting capacity is concerned, with you know, in in in terms of actual
Subhrakant Panda (Indian Metals & Ferro Alloys Ltd): capacity. We will go beyond 5 lakh tons with the commissioning of the seven furnace, which is en route which is which is happening shortly. And we of course have the partially built furnace at KNR 2, which we expect to be operational around July or so of next year. We have got some initial environment clearances and all that. But, I I think we will be able to give a more accurate timeline perhaps in a couple of months time when all the permissions are in place. But, we are fairly confident about commissioning that by by July 2027. So, our guidance in terms of tonnage continues to be 380,000 tons for FY 27. The slight reduction being on account of lower output from KNR 1 and a slight delay in KNR 2. And our volume guidance for FY 28 remains 475 to around 475,000 tons. And beyond that, in terms of further increase in ore output, the capex approved by the board today will eventually take us beyond 1.2 million tons. In what it'll initially do is is hasten the the the achievement of 1.2 million tons. Make it Make the timeline a little shorter. But, eventually, basically, our our 1.2 million tons was coming 0.6 from Sukinda and 0.6 from from Mahagiri. So, this underground, so this this capex will take Mahagiri from 0.6 to 0.75. So, net-net, it increases our ore-raising ability and we will, therefore, add further smelting capacity in due course.
Joy Shah (Seven Seas): Okay, thank you.
Moderator (Adfactors PR): Thank you. Next question is from the line of Parthiv Jhonsa from Anand Rathi. Please go ahead.
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