Indian Metals and Ferro Alloys : Transcript of Analysts/Institutional Investor Meet/Con. Call

INDIAN METALS & FERRO ALLOYS LIMITED

imfa

IMFA Building	01st June, 2022
Bhubaneswar-751010
Odisha, India

Corporate Identity No.

L27101OR1961PLC000428

TEL +9r 674 261I0OO [phone]oroo FAX [phone] +9r 674 2580145

[e-mail]

www.imfa.in

The Listing Department	The Deputy General Manager
National Stock Exchange of India Ltd. (Corporate Services)
Exchange Plaza	BSE Limited
Plot No.C/1, G. Block	Floor 25, P.J. Towers
Bandra-Kurla Complex	Dalal Street , Fort
Bandra (E)	Mumbai-400001
Mumbai-400051	Stock Code : 533047
Stock Symbol & Series : IMFA, EQ

Sub : Earnings Call Transcripts

Dear Sir/ Madam,

Pursuant to Regulation 46(2)(oa) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the transcript of the audio call recording of the Company's Analyst Call held on 25th May 2022, on the Audited Standalone and Consolidated Financial Results of the Company for the quarter and year ended 3 pt March 2022 is attached herewith.

The transcript of recording can also be accessed on the Company's website, from the attached-link:

http://www.imfa.in/investor-information/ParticipantsandTranscript.html

You are requested to take the same on record

Thanking you

Yours faithfully

For INDIAN METALS & FERRO ALLOYS LTD

(P�NDELWAL)

CFO & COMPANY SECRETARY

Encl : As above.

"Indian Metal & Ferro Alloys Limited Q4 & FY-22

Analyst Conference Call"

May 25, 2022

MANAGEMENT: MR. PREM KHANDELWAL - CFO & COMPANY SECRETARY, INDIAN METAL & FERRO ALLOYS LIMITED

MR. BIJAYANANDA MOHAPATRA - COO, INDIAN METAL & FERRO ALLOYS LIMITED

MR. DEEPAK MOHANTY - HEAD, FERRO ALLOYS

BUSINESS, INDIAN METAL & FERRO ALLOYS LIMITED

MR. BINOY AGARWALLA - HEAD, POWER BUSINESS UNIT, INDIAN METAL & FERRO ALLOYS LIMITED MR. SANDEEP NARADE - HEAD, MINES BUSINESS UNIT, INDIAN METAL & FERRO ALLOYS LIMITED

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Indian Metal & Ferro Alloys Limited

May 25, 2022

Moderator:Ladies and gentlemen good day and welcome to the Indian Metal & Ferro Alloys Limited Q4 FY22 Analyst Conference Call hosted by Perfect Relations Private Limited. 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 the '*' then '0' on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Mamta Samat from Perfect Relations. Thank you and over to you ma'am.

Mamta Samat: Thank you Peter. Good morning, everyone and thank you for joining us on the IMFA's Q4 FY22 analyst conference call. Today we have with us the senior management represented by Mr. Prem Khandelwal - CFO and Company Secretary, Mr. Bijayananda Mohapatra - COO, Mr. Deepak Mohanty - Head of Ferro Alloys Business Unit, Mr. Binoy Agarwalla - Head of Power Business Units and Mr. Sandeep Narade - Head, Mines Business Unit.

Before we begin, I would like to say that some of the statements that would be made in today's discussion may be forward looking in nature. We will begin the call with the opening remarks from the management, after which we will have the forum open for the interactive Q&A session. I would now request Mr. Prem Khandelwal for the opening remarks. Over to you sir.

Prem Khandelwal: Good morning, everybody. Financial numbers are already with all of you, it's in the public domain. We are published that. So, I'll start with the production sale numbers; production for Q4 is 61,462 tons and sales is 70,395 tons. Average realization for the quarter is around Rs 1,06,000 per ton and average cost is around Rs 82,700 per ton. with that we can start the question-answer session. Thank you.

Moderator:Thank you very much. We will now begin the question-and-answer session. Our first question is from line of Shubham Agarwal with Aequitas India.

Shubham Agarwal: Firstly, my question is with regards to volumes. So, if we see the production number this quarter versus last quarter, we have seen significant drop and if we also see the overall production number which was 2,46,000 for the current year, has seen a 5% drop compared to 5,59,000 almost 5,60,000. So, I wanted to know now going forward what kind of volume can we expect and is there some debottlenecking possibility from our plants.

Prem Khandelwal: Shubham you're comparing the Q4 versus Q4 of last year?

Shubham Agarwal: Yes, Q4 versus Q4 of last year and overall FY22 number versus FY21 number.

Deepak Mohanty: Shubham actually last quarter of the previous FY21 it was 67,000 versus 61,000. That's primarily because of the pandemic situation we were producing but lot of material remained unprocessed, which have been handed over in the fourth quarter. That is one of the major reasons for which number is 67,500 in that quarter vis-à-vis 61,500. That is one major. Apart from that particularly

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	Indian Metal & Ferro Alloys Limited
	May 25, 2022
	on annual figure if you talk about it's a drop of about 13,000-14,000. That also includes major
	quantities from backlog material apart from that we suffered sometimes on account of the
	oxygen shortage in the month of April-May, the Yash cyclone particularly at Choudwar and one
	of our substation transformer was out last year for that there was little bit drop in production.
	Also, there is another reason, we have produced this particular year ferro-chrome with higher
	grade like 61% as against 59 % in the previous year. So that accounts for also quite a bit of
	volume. With the same kind of ore with an quantity of ore we produce higher grade then you
	produce less. So, on those accounts basically is the difference. As you know we produced around
	2,50,000 per annum and every quarter it will be in the range of 60,00 to 62,000. In that manner
	it is more or less in line and particularly in this quarter that also will be in that range of 61,000
	tonnes
Shubham Agarwal:	Thank you for the elaborate answer. Secondly now coming to the cost of production. Basis the
	number that is given to us, it seems like we had a cost increase of almost Rs. 4,200 for a ton Q-
	on-Q. So, I wanted to understand and most likely this cost increase is because of coke and the
	coal. So, going right now from Q1 onwards do we see further increase in cost per ton or we kind
	of settled on per ton cost right now at 82,700?
Prem Khandelwal:	No Shubham I think we'll see some more cost pressure in Q1 on account of coke and coal because
	the prices have gone up, particularly the coal price has gone up very high so which is going to
	be consumed in Q1 and Q2. We might see some more cost pressure in Q1 especially.
Shubham Agarwal:	But as per your internal estimation what would be per ton increase in cost basis our raw material
	average right now?
Prem Khandelwal:	That we need to work out, we have not yet worked out that, depends on what kind of stock we
	are consuming. So difficult to predict at the moment.
Shubham Agarwal:	The cost increase will be similar to Q4 versus Q3 or it will be slightly higher than that?
Prem Khandelwal:	Q3 versus Q4 if you see the cost increase is around Rs. 8,000 a ton. So yes, maybe around that
	level we could see a cost pressure of around that level only in Q1.
Shubham Agarwal:	In Q1 versus Q4?
Prem Khandelwal:	Yes.
Shubham Agarwal:	Lastly on the realization part, so obviously we saw a drop in Q4 but since then I think the
	realization of ferrochrome has been very strong, upwards of almost 1,25,000. Firstly, I wanted
	to understand what was the key reason why this realization is so high and what is the
	predictability of this realization staying high.

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Indian Metal & Ferro Alloys Limited

May 25, 2022

Deepak Mohanty: You are talking about realization going up in the Q4 or you are asking from Q4 to Q1, what is thereason ?

Prem Khandelwal: Deepak Q4 to Q1 because Q4 realization has gone down.

Deepak Mohanty: Q4vs Q1 as you know because of the Russia-Ukraine was and other nickel prices went up and there was cyclone in Australia which affected the coking coal and all, so coke and all other prices went up. iIn order to take care of the cost push as well as the availability bottlenecksthe benchmarks increased by 36 cents in Q1 of this year. So that is the reason for the increase. But it is little bit truncated particularly in case of China because of the pandemic situation. Anyways, we are expecting higher realization in Q1 compared to Q4 of last year and in Q2, it will be more or less in similar lines because again in Durban, South Africa flood is forecasted.in view of continuous rain, which will affect Durban port operations.. Further, Chinese chrome ore stock has gone down to 2.4 million level from earlier 2.7 million and 3.5 million, industrial activities have come down but once the pandemic situation gets softened then things will be different and we are expecting more or less in similar line at least for next quarter going ahead minus slow down to that could happen.

Shubham Agarwal: There was also news that chrome-ore export out of South Africa went down significantly

because of floods there, did this also help increase in realization?

Deepak Mohanty: In China particularly the May tender price went up by 650 RMB from there 9,000 to 9,650 that mainly because of chrome-ore prices going up from the UG2 which is mostly used which was around 175 that went which is now 295 to 300 to that extent only. But the activity level has come down there also in China because of the pandemic. As you know the COVID policy by the Chinese government so for that reason and the stocks are coming down. Post once COVID situation softens, the rail voyage activity will go up and in that situation this Durban port which is the major port and chrome-ore availability things are going to go up faster than the present scenario.

Shubham Agarwal: Thank you for the answer. Lastly, I had few bookkeeping questions. Firstly, if we see the employee cost which has gone up by almost 20 crores on an average this quarter. If you can explain the reason. Secondly, on the deprecation side it has gone up by 10 crores without any CAPEX getting capitalized. I wanted to know this reason also. Lastly on that tax, what would be at our average tax going forward, these three bookkeeping questions I asked.

Prem Khandelwal: As far as depreciation is concerned Shubham, that has gone up because we have changed the life of some of the mining assets. As the auditor had pointed out that the mining assets life should be taken as per the mining lease. Till now we were providing depreciation based on Companies Act. Because of that the depreciation has gone up by 10 crores, changing the life of assets, mining asset especially and the taxation, since we have now opted for new regime. So, tax rate is going to be around 25% going forward. What was the third one?

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