Indian Metals and Ferro Alloys Limited (533047) Earnings Call Transcript
May 24, 2024
Earnings Call Speaker Segments
Ladies and gentlemen, good day, and welcome to the earnings conference call of Indian Metals and Ferro Alloys Limited, hosted by Veritas Reputation. [Operator Instructions]. Please note that this conference is recorded. I now hand the conference over to Mr. Abhishek Savant from Veritas Reputation. Thank you, and over to you, sir.
Good evening, everyone. We warmly welcome and express our gratitude to each one of you for being a part of today's earnings conference call for Indian Metals and Ferro Alloys Limited. I am Abhishek Savant, your host for this session and it brings me great choice to guide you through the proceedings as we analyze the annual financial results for the quarter and full year ended 31st March 2024. We are glad to announce an excellent operational performance during the year with the highest ever ferrochrome production, chrome ore resin, and captive power generation, which has set the stage for a strong financial performance. This achievement has come despite all external challenges and it further solidifies IMFA's position as India's foremost fully integrated manufacturer of ferrochrome in the metals and mining industry. While the detailed financial results are available on our company's website and the stock exchanges, it's essential to note that our discussion may include forward-looking statements contingent upon known and unforeseen risks, uncertainties and various other factors, to offer a comprehensive overview of our annual financial performance, and address any queries you may have. We are honored to have an esteem team members of our management team present today. Mr. Prem Khandelwal, CFO and Company Secretary; Mr. Bijayananda Mohapatra, Chief Operating Officer; Mr. Deepak Mohanty, overseeing the Ferro Alloys business unit; Mr. Binoy Agarwalla, who heads the Power Business Unit; and Mr. Sandeep Narade, who is in-charge of the Mines Business unit. Our agenda for today begins with a concise summary of our Q4 as well as annual financial performance. Following that, we'll open the floor for a Q&A session, providing you with the opportunity to engage directly with our management team. Without any further delay, I now hand over the call to Mr. Prem Khandelwal, our CFO and Company Secretary, to guide us through the financial highlights. Over to you, sir.
Thank you, Abhishek, and good evening, ladies and gentlemen. I welcome all of you to this Q4 and FY '24 earnings con call of the company. FY '24 has been very satisfying year for the company in the sense that the company has achieved the highest ever operational performance in terms of ferrochrome production, power generation and mining output and has been the second best year in terms of PAT. So financial numbers and consol numbers are already in public domain. So, I'm not going to repeat those numbers again. But I would like to clarify just one item that one-off item, which is in the fourth quarter results relating to Utkal Coal Limited. As you may be aware of, the company had invested INR 111 crores in the share capital of Utkal Coal and had advanced a loan of INR 243 crores to the company for coal mining projects. But on the principal amount of INR 243 crores, the company had stopped recognizing interest since the date of calculation of coal block in 2014. But in fourth quarter, the nominated authority has quantified the compensation amount at INR 353 crores, consequent to which the company has recognized the interest of INR 243 crores of principal amount, from 2014 to 2024, and the interest amount comes to around INR 220 crores. But as the compensation amount of INR 353 crores is not enough to cover the entire principal and investment amount along with the interest, the balance amount of INR 221 crores has been written off which is from the part of other expenses and the interest component of INR 221 crores from part of other income. Apart from that, all other things are normal things. So with that, I would now request to start the Q&A session.
[Operator Instructions] The first question is from the line of Aashav Patel from Molecule Ventures PMS.
First of all, I would like to thank the entire team for -- and congratulate the entire team for an excellent set of numbers in a globally very tough environment. To start with my first question is in quarter 4 consolidated P&L, we have seen an increase in other income by roughly around INR 50 crores compared to the usual range. So can you please specify what led to this increase in other expenses?
Other expenses? You're talking about consol d account or?
Yes, consolidated other expenses?
Consol other expenses, we had the usual like repairs and maintenance has gone up by INR 12 crores because of boiler repairs and furnace pumps repairs is done, these are one-off kind of expenses and the selling expense has gone up by INR 6 crores, primarily because of more tonnage we have sold in this quarter and the routine overhead cost escalation of around INR 10 crores and there is a write-up of goodwill. As I said in my opening remarks, we have written up the investment of INR 111 crores in UCL. So there was a goodwill amount of INR 21 crores also lying in the consol account, which we yet to write off. So if you put all these together, you'll get the figure.
Got it, sir. So all these items shouldn't be, for example, goodwill write-off and everything should be part of exceptional line item?
Saunak, why have we done? Can you explain that?
So primarily, this is on the basis of a routine expenditure and going by the India's requirement it is that since whatever was a indecent amount that we had in the standalone financials of IMFA in UCL, which -- when you also put amount of about INR 111 crores we are providing for impairment. On the same basis, on the goodwill, which has been created in the consolidated financials has to be also written off as a part of the other expenses and we cannot treat it as exceptional expenses. So that is why we have taken it in the normal course of business.
Got it, sir. Sir, my second question is that our EBITDA, what would be our EBITDA production cost for quarter 4? And how do you expect it to pan out in quarter 1?
Just a moment, let me see EBITDA cost. EBITDA cost for Q4 is around INR 82,000 -- INR 83,000 a tonne. And I think Q1, it should be in the same range, more or less in the same range.
Similar. But sir, we have seen coking coal has been correcting significantly in the last 6 months. And met coke is also expected to be corrected in a similar fashion. What was our coke cost in quarter 4? And what is the coke cost in our inventory.
Deepak, would you explain that?
Yes. Actually, our coke cost, it is something like in the quarter 4, it is around INR 15,500 around, okay. And which was in the previous year, if you consider it was something like INR 22,000, INR 23,000. So it has come down quite a bit because of the down trend. And our existing coke, whatever we have, what we are using at the moment, so that is more or less in line with these, but it is as you are telling also the prices have come down even we have booked for the -- what will be fit in the next quarter, early next quarter in June. So those will -- those prices are coming down quite a bit. So going ahead, of course, that will take 3 months and on all those things, actual leases will be after maybe 4 to 5 months. But still our coke cost for the next quarter will be hovering in the same line.
Okay. But for Q2 onwards, we can expect a significant decrease improved cost?
In Q2, no, no, it is remaining more or less in line. That's what in Q2. Q3, it will go down. So roughly about...
For how many months we hold the coke inventory, sir?
Yes. We keep around 3 months inventory because it comes from mostly from Colombia. So if there's a shipping time of 45 days and then stacking the material for shipment, all those things. So normally, we keep the inventory for 3 months.
The next question is from the line of Shubham Sethiya from Bajaj Finance.
Sir, what was the specific consumption of coal in quarter 4 and for overall FY?
Binoy.
[Foreign Language].
Sir, what was the specific consumption of coal for quarter 4 and then overall FY.
Overall specific coal is coming around ARB 1.01 per megawatt.
And sir, specific consumption of coke per metric tonne of ferrochrome production?
So basically, for ferrochrome, it is around 450 to 500 cases of the fixed carbon is required. So you can say 0.5 or 0.6, if you take on the fixed carbon basis, 0.5 to 0.6 tonnes per metric tone.
Okay, okay. Sir, my next question is on the power cost. So what was the tentative power costs for quarter 4?
Quarter 4 or you are asking for FY '25 Q1?
No, no. For FY -- for quarter 4 FY '24.
Power cost variable cost is INR 4.37.
And fixed cost, sir?
Sorry?
Fixed cost?
Fixed cost is around INR 1.30.
INR 1.3, sir?
INR 1.30. 3-0. INR 1.30.
3-0. INR 1.30. And sir, for quarter 1, what we are expecting?
We are expecting will be -- variable cost will be around INR 4.20.
Okay.
And fixed cost will be at par with Q4.
Sir, my next question is on the NSR side. So we saw a very good NSR for overall quarter 4 and then for FY '24. What is our forecast for this Q1 and Q2 in terms of NSR?
You mean net realization?
Realization?
Market has improved a little bit up to Q4. So I think we can see an increase of around INR 3,000 to INR 4,000 for Q1.
So total will be, sir, around?
This quarter, it was around INR 102,000. So we may see INR 105,000, INR 106,000 in the next quarter.
Our next question is from the line of Joe Shah from Seven Seas.
Prem, going back to our last con call, you told that construction of boundary wall for Kalinga Nagar project was not started, it could not be started because of some administrative issue. So now what is the status of this Kalinga Nagar lane, when we are going to start boundary wall construction?
BNM, would you answer that?
Yes. Regarding this Kalinga Nagar project site, so there is a R&R issue, compensation issue. The IDCO has already even the disbursement process started and they have initiated for administration, but in the meantime, election has already started, so they will discuss with our families after the election. So mid-June. So thereafter this process will be the strated, construction of boundary wall.
Let me shade this chart because there won't be delay on this side after month, so we'll be able to start constructing of boundary wall.
No, no. District administration will help us for the construction because of the election, they don't want any law.
Right, right. Okay. Okay. Okay. Now one more question about this ethanol. What is our annual capacity in liters per year, how many liters will be produced per year from the ethanol.
Sir, the projects we are putting is around 120 liters per day. Basically, it is from mainly sunlight and damaged food grain. So it would take 300 working days.
Now, production capacity. What about production capacity?
Production capacity is 120-kiloliter per day.
Okay. Okay. 120-kiloliter per day. And how many -- the strength of a rice bran we need for one kiloliter?
In terms of rice bran, we are more focused about the maize. So it will basically maize based because that area maize cultivation is too much.
Okay.
That's one. So that will be exact figure I have to check further.
The next question is from the line of Saket Kapoor from Kapoor & Company.
[Foreign Language] Sir, as you alluded to the earlier participant about the other expenses for this quarter, which is to the tune of INR 162 crores, that includes INR 21 crores of the royalty, the goodwill part?
Yes.
And other than that, sir, then the remaining INR 20 crores is also a non-rating one? Or what should we take into account for that remaining balance INR 20 crores.
Again, as I said, the INR 12 crores is repairs and maintenance, this is again nonrecurring, but INR 6 crores of selling expenses is because of higher tonnage. So that is recurring in nature and other overrate of INR 10 crores is again nonrecurring in nature.
Other -- last point, sir?
Other overrate of INR 10 crores is again one-off kind of thing, so that's may not repeat again.
Okay. Okay. Sir, when we look at your note #7 there is -- note #6 rather therein, you have proposed about some acquisition of 52 lakh shares of UCL. Sir, if you could explain the nature of the transaction and how much we will spend to acquire this 21% stake?
As you are aware of IMFA is holding 79% stake in UCL. So our balance 21% is held by promoter companies. And we are in the process of merging the UCL into IMFA, but we have been advised that if you should make UCL 100% subsidiary, the merger process will be much easier. That's what we are trying, but UCL since the value is nil, we are buying the 21% remaining stake at INR 1 to make it 100% subsidiary and then we'll launch the merger scheme.
Right, sir. And sir, when we look at the segmental reporting, therein, we find that under the mining category on a revenue of INR 139 crores, we have booked a loss of INR 110 crores. So are these all goodwill and all these issues that get captured into the segment under mining? Or how will you explain this, sir?
Saunak, are you aware of that?
So over there, what usually happens is that all the costs over in mine, everything including whatever is the expenses that has been incurred for resin as well as mining is actually shown under the segment. But since you know this is a captive consumption, so only those if we have sold outside are considered, otherwise, whatever the value of transfer, that is accounted there as a revenue, and that is what has given to our new business, the retail value business. So on a stand-alone mining, it shows the overall -- all the costs, which have been incurred in the mines are booked under the mining costs.
Okay. But this is only a one-off for this quarter only. When every quarter, we are putting -- we are booking revenue in this trajectory of INR 130 crores and the profit is closer to -- our loss is closer to INR 1 crores. But only for this fourth quarter, we are seeing this loss rising to INR 110 crores. So that was my only reason. Even last year also...
It is actually dependent upon whatever results of mining and dispatch plan to our ferroalloys business, so that can be quarter to quarter depending upon whatever is our production plan.
These are the extraordinary costs. It's a significant number, INR 112 crores for the year as a whole.
No, it's a routine cost of it.
Right, sir. Sir, when we spoke about this ethanol project, what is the CapEx that we have outlined for the project? And when will we start spending on the same?
BNM.
The project cost is around INR 140 crores and now we have applied for the single loan clearance to the Government of Odisha and also we have applied to this environment clearance to MoEF. So we have this one hearing on 14th May, where there is some concern that also we have replied. Hopefully, we'll get this by next month. So after that, this land belongs to us. So then we can start our land preparation and all these things. Then simultaneously, will go for the project execution.
And when will this -- any time line when will be commissioning this project?
This will be generally requires around 12 to 14 months.
12 to 14 months. And on a CapEx of INR 140 crores, what should be the expected top line is 120,000 liters you mentioned, I think so, kiloliters.
No, no, there is 120 KLD, we used to call the kiloliters per day.
Per liter, I said, sorry. So at today's value of ethanol, what should be our optimum revenue at full capacity?
Saunak?
Yes. So it is what you correctly mentioned, it is 150,000 or basically 150 KLD. And in that cost of INR 140 crores, INR 30 crores is related to our own land, so we will not actually have any pay out on that. So overall, our involvement will be somewhere around INR 100 crores, INR 110 crores.
Saunak, he is asking about revenue turnover?
Turnover will be somewhere around once we achieve that 150 KLD, it will be around INR 200 crores to INR 220 crores to start with. But it will depend upon the market sizes, which can increase.
Right. And the margins are also in double digits. That this product is -- because I think the OMC will be stretching the product from...
OMCs are the controlling authority.
OMC are the controlling authority.
Yes.
Right, sir. And last point is on the tax provision part, sir. We find that there is a higher tax outgo. Any prior period item also we are seeing? Or what could be the reason that the profitability is definitely higher. So what is our tax rate currently.
Tax rate is 25%, Saket. We have gone for new regime. So tax rate is 25%. I don't think tax rate will be high because of high profitability tax is high.
Correct. Right. And just to conclude, employee benefits also include the director remuneration, the promoter commission also. That is the reason why it has gone up for this quarter.
No, no, it has gone up because of the normal increment as well as the commission also because of higher profit, higher commission.
Yes. I would also like to thank the Board for the increased dividend payout and also the commitment with which Panda sir, alluded to during the television interview where he did attributed the fact that he will be sharing the payout with his investor as has been the case as a precedent be. So we are really grateful to the team for adhering to these facts and rewarding their shareholders in the best possible way.
Thank you, Saket. This has already been the management priority to reward the shareholders wherever possible.
Correct. Correct, sir. And we have acted on the same part.
The next question is from the line of Satyan Wadhwa from Profusion Investment Advisors.
So can you tell us what the production and sales number was for March quarter? And what would you expect for FY '25?
Production for March quarter is 65,000 tonnes and sales is 68,000 tonnes. And next quarter...
What are you planning for next quarter?
Next quarter is slightly lower because we had some maintenance in between from -- which we started from March and completed in May. So in PCP 2 and 1 furnace at Choudwar and one furnace at Therubali, so that will be slightly less, around 62,000 BKB in that range next quarter.
And for the full year, what would you project?
We are expecting around 215,000 to 260,000 as usual in that range.
So to 62,000 to 65,000 per quarter, is that what you are saying?
Actual -- normally 215,000 to 260,000 in that -- around 260,000 only it will be because we had some maintenance in the initial part of the beginning of the year and all. So taking that into which was -- which happens normally after 5 to 6 years in 2 furnaces. That will reduce and go to the different level probably. But it will be even around 260,000.
The next question is from the line of Aashav Patel from Molecule Ventures PMS.
My question is clear margin pressure is visible globally, even on large South Africa-based smelters like Merafe. What is the situation exactly in China right now given that they don't have captive ore what sort of margins do we think the nonintegrated players over there would be making? And do you expect it to inch upwards?
Let me answer. So actually, Chinese market, in fact that ferrochrome production has gone to 770,000 per month, which was in the range of 600,000 to 650,000. And then stainless steel production also accordingly has gone up there. Only thing in China, now they have a strategy to operate at a very low margin, but have higher efficiency and higher operational ratio. So which is going on and their domestic demand also is not very bad, but only the problem is real estate sector for which the government has given certain declarations that they will buy out and sell out this real estate, really that happens, things will become better. Otherwise, at the moment, the situation is quite steady. Demand supply are matching and going up and things are not -- it is not going to go up further at the moment unless government has communicated. Otherwise, it is more or less stable and in the range of around $0.98 to $0.99, which is the level is what's helpful for most of the business.
Got it, sir. And sir, on EBITDA business, the EBITDA per tonne basis will it be more profitable than Chinese smelters, right? Is that correct understanding?
Absolutely.
Okay. So what sort of chrome ore inventory is currently present in Chinese port? A rough ball park figure?
Yes, yes. It's around 2.6 million tonnes to 2.7 million tonnes, which is mostly 50 days consumption.
50 days consumption only. So the inventory looks to be quiet on the lower side of the spectrum compared to the usual.
Yes. A little bit delay in segment and resi issues, which is delaying the thing. But now they -- probably they are maintaining in that range.
But does this mean whenever the...
They are not maintaining like earlier 3 million more than 3.5 million. They were in the range of 2.1 million tonnes stocking. But what I'm telling that is at the ports. Of course, there will be some inventory in the plants and all, but ports stock wise also, it has now they've gone up from 2 million to 2.1 million to 2.7 million, 2.8 million in that they are maintaining that range.
But given that whenever the demand improved in China, does this slow inventory means that price increase could last for a longer time until they actually procure the ore again from South Africa and converted into ferrochrome and provide the supply in the market?
You see the demand if it goes up, naturally, prices will go up, but Chinese are trying to maintain a low margin both in ferrochrome and also in stainless steel rather some destocking took place which has got the stability in stainless steel, particularly destocking. So they are maintaining that as a strategy. So that's why they don't want to take it high and then bring it down in a large way, like which was happening earlier. But now they are operating with low margin at all the places, but maintaining operational level of 90%.
Sure. Got it, sir. Sir, my question -- next question is regarding the upcoming CapEx. So as we have already announced INR 1,500 crores of CapEx, I just wanted to know how the fund outflow is expected to be spread over the next 5 to 7 years.
You want year wise breakup?
Yes. Roughly year wise breakup. I understand it exact can't be laid down at the start of the project.
Yes. Because that will be difficult to give the year wise. But since the spread is over a period of 3 to 7 years, we are quite comfortable at the funding it through our internal approval.
Exactly. Okay. Got it. So except the smelter, the entire mining CapEx would be spread out. So in a single year, we won't require any significant amount.
Yes, even smelter will be spread over a period of 18 months. So...
And what is the current status of EC, environmental clearance regarding this one metric tonne enhancement?
EC, has been recommended for grant of EC. I think within a month's time we should be getting it.
And for chrome ore enhancement?
Chrome ore enhancement already we have got 50 for Mahagiri from INR 3 lakhs to INR 6 lakhs, we have already got secure and we have produced in the last quarter. And for essence also, we have got EC for INR 6 lakhs, announcing from INR 3 lakhs to INR 6 lakhs.
So mining has already been achieved.
Yes, yes.
But we cannot merchants -- we cannot sell this as a merchant miner, right? This enhanced chrome ore?
50% of that we can sell. But as a policy, we don't do that. That's why we are adding more furnace capacity.
Got it. And sir, given that we already have a robust balance sheet with INR 300 crores of net cash and also expecting the around INR 250 crores as a final settlement from Utkal C, I mean we are already generating INR 400 crores to INR 500 crores out of annual cash flow, which is sufficient to fund and announced CapEx of INR 1,500 crores, as mentioned by you. So my question is that in the past, management communicated of further expansion beyond this 1 lakhs metrics tonne capacity. So any concrete plans have been laid down on those parts.
No, no. As of now, beyond that, we have not planned anything concretely. Because any expansion will be along with the ore output, without ore, we cannot expand in the furnace further.
Got it. But sir, we are meaningfully increasing our ore. At the same time, we are increasing our public capacity only by 30%.
No, no, as of now, we see whatever extra ore we are going to get maybe after 18 months, 12 to 18 months, by that time this furnace come up for operation also. And in net sales, when we further road, then we'll plan the furnace. That is at very initial stage now. No concrete plan on that as of now.
The next question is from the line of Shubham Sethiya from Bajaj Finance.
So our annual production for the year was around 2.6 lakh tonnes. With adding this 1 lakh tones of capacity. So this year output will be in the same range only, right? 2.6 lakhs tonnes?
Yes.
From the next year onwards, we can expect like if we take 18 months of CapEx time for the smelter, so we can expect half of the capacity building from the next year onwards, right?
In FY '27, we can expect that capacity to be operational.
Okay. Sir, my next question is, again, is on the cost front only. So for the overall production in quarter 4, what was our specific power consumption?
Binoy?
Power consumption, so basically specific power consumption is around 4,000 units.
Sorry, sir?
4,000 units per tonne of ferrochrome.
4,000 units. Okay.
Roughly.
The next question is from the line of Anant Mundra from Mytemple Capital.
Just wanted to seek a clarification. You mentioned the current EC limit is 1.2 million tonnes for us already. Is that correct?
Let's say, EC, if you have 1.2 million tonnes, 6 lakhs on MNC, and 6 lakhs per Sukinda, okay. After EC we have got the 6 lakhs in production from Mahagiri, but 6 lakhs per Sukinda will start after getting with the underground operation, which will take 6 to 7 years.
Okay. So right now we are producing mainly for Mahagiri. Is that what you're saying?
And actually, we're doing this open cast mining from Sukinda that we are restricting to 3 lakhs. So that underground operation, we are at keeping those stocks. And the rest incremental, everything we are doing from Mahagiri. Because Mahagiri operation CTO that consent to operate that we have up to 6 lakhs.
Okay. So once the -- so currently, so Sukinda just respect to 3 lakhs and Mahagiri you will ramp up to 6 lakhs?
Yes. Yes. As per requirement without any consumption.
And once we have to do the Phase II expansion of Kalinga Nagar at that point of time, we will explore expanding Sukinda to 6 lakhs.
No, no, no. Upto let's say 1 lakh will be recovered around 2.5 lakhs ore, so 9 lakhs is there. 3 lakhs from Sukinda, 6 lakhs from Mahagiri.
Okay. Okay. So Sukinda will not go beyond 3 lakhs. That's the correct connection.
Because operation -- will go for underground operation, we have to reject our open customer stock.
The next question is from the line of Saket Kapoor from Kapoor & Company.
Sir, a small point, you mentioned that for this quarter, for quarter 4, we have some overhead expenses in the overall part and that we have booked for this quarter and the volume we will see in the next quarter. This is what you have communicated.
Yes. Those are overhead expenses, it has nothing to do with the volume, Saket, volume will be more or less around 60,000 tonnes every quarter.
No, sir. When we look at quarter 4 numbers, the production number is at 65,000. We are looking at a lower volume number. This is also not a monsoon quarter. That will happen later on. So for Q1, we are expecting production in the range of 62,000. So -- and for that, the expenses will be different. I was just trying to understand whether we have booked the expenses in March quarter or it will have a bearing again in the first quarter?
Deepak?
I think it will be basically -- something will be major equipments and other stuff when we issued and booked in the mark, something also will come in April, so some amount. But the production will be mostly in the level of 63,000. Okay.
Right. 63,000 should be our tonnage for the first quarter?
Yes, yes. Tonnage wise for this quarter.
And sir, our realization, as Prem sir, you mentioned are currently trending up by 3% to 4% for -- as of now, we have 45 days into -- the next 2 months into the quarter. So the realization trajectories, spot prices are up 3% to 4%. That is what you alluded to.
INR 3,000 to INR 4,000 per tonne.
Per tonne. That is the spot prices.
Yes.
Okay. And if you take, sir, the EC -- the percentage that we take for the quarterly run rate that we book every quarter, what is the trend there, sir?
No, I didn't get you Saket, can you repeat it again?
So we also have a contracted price index that is set every quarter. How -- where is that index currency? What is that indicating.
So basically, you are talking about the benchmark.
Benchmark, right, sir, I missed the word.
Benchmark price has gone up in this quarter by $0.08, from $1.44 to $1.52
Okay. And that benefits we will get in the Q1 realization in terms of the contracted volume.
You see we'll get benefit naturally for that we think it will go up and think what Mr. Khandelwal has told that it is increasing, taking all those things into account, will get INR 3,000, INR 4,000 in the average deal life.
Okay. But only dampener will be, we'll be selling less than what Q4 has been, Q4 is the highest at 60,000 -- closer to 68,000.
But as the production will be around 63,000 naturally the self projection is also at the same because we don't have really stock to operate, do beyond the stock. Already last year, we had done. So we are at the minimum stock. So that's the level what we are expecting 63,000.
And sir, [Foreign Language] mining league for which year when will the expiry or the renewal comes?
Mining is up to 2049 and 2055.
The next question is from the line of Joe Shah from Seven Seas.
Deepak, I understand that from June onward, Mara, South Africa, they will stop announcing the benchmark price. So what will the impact on the pricing, how we'll be able to decide on the price.
So it's a big impact, just that monsoon has come on 20th of this month, so people are working out, working out -- have to work out with people because that was a good base to start negotiation with, but which will not be there. But eventually things will people like there are many other indices like your CRU, cost masters and many other things are there. So it has to be dealt with individual customers, how to bring in certain whatever the way to -- for the negotiation and moving that, so of course everybody including Glencore and all, they are working on that. So a lot of issues were there for which they have now stocked it. But anyway, so the things start to change and tell that we manage well to who will be doing all those things in the coming days.
Right. Now, Deepak, one more thing. I need your view on macroeconomics because now our future for IMFA will be based mainly dependent on the ferrochrome price realization. We have stocked around INR 5,000, INR 4000, INR 3000, something like that. But now people are talking about the fed rate cut in maybe say 6 to 9 months to dampen. So will it increase the demand of commodity and stainless steel in IMFA, ferrochrome, what is your view?
You see, I just try and attended ICDA where SMR presents at a paper, where particularly for stainless steel sector, they are expecting around 4% growth. And given the IFSF have told also, there will be 3.6% hike in stainless steel consumption. And we are expecting, which is a 50 million stainless steel one production back to reach 59.5 million tonnes in this '24 calendar year. So I don't think there will be much issues at the moment, people are stringent. But I think it will not -- and then China trying to build out that residential this real estate people, if it happens, things will be more or less steady.
But suppose their fed rate cut, then it will increase the demand of our stainless steel beyond our target. Consumption will go up. It is generally, agree that with fed rate cuts, consumption will go up and...
You see, China, is producing more and -- but they have to have the opportunity to sell. And Europe, particularly German and many other places are not in very good step, economically, inflation, be it inflation and the interest rates and everything. So we solve those things. That's why people are even with the negative sentiment, they're telling that consumption is expected to grow around 3% to 3.5%, which is, according to me, is very good. And if that remains, things will not be the same.
As there are no further questions, I now hand the conference over to Mr. Abhishek Savant for closing comments. Over to you, sir.
Ladies and gentlemen, your presence on this conference call today has been greatly appreciated. We've had the opportunity to exclude IMFA's future growth strategy and discuss how we plan to navigate through this challenging time. Our optimism for the growth journey ahead not only within India, but also in other regions remains steadfast. On behalf of the company's esteem Board of Directors and dedicated management team I extend our heartfelt gratitude to each one of you for your active participation in today's call. Your interest and insights for questions have been a valuable confirmation to our dispose. Should you have any further inquiries or require additional information, please do not hesitate to reach out to us or you can contact my colleague Aryan Rana at aryan.rana@veritasreputation.com. We remain at your service to address any queries you may have. Once again, thank you for being a part of this conference call. We eagerly anticipate a promising future and a continued growth together in FY 2025. Wishing you all a fruitful and fun filling time ahead. Thank you.
Thank you.
Thank you.
Thank you.
Thank you. On behalf of Indian Metals and Ferro Alloys Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
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