Nava CFO Sultan Baig on a live discussion on CNBC TV18 today. He delved into our Q2 performance, business outlook, future projects, and more. Watch the insightful interview.
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About a particular company, we have Pharaoh Alloys manufacturer Nava, which reported what was a good set of Q2 numbers. Revenue and EBITDA saw strong growth. We had margins which expanded as well for the company. In fact, as of September 2023, the debt in the first half of FY24 lowered to around 1059 crores. So we do have with us Sultan Berg, who's the CFO of Nava who's joining in to discuss the performance gone by. Thanks Sir for joining in and Seasons greetings. For you, if you could just start by giving us a sense in terms of how exactly the Pharaoh Alloys business did. There was a bit of an underperformance this quarter. What was the reason for that and what is the outlook in the second-half? Thank you. Thank you for having us on the call. First of all happy Deepavali to all of you and you somewhat best wishes from our side. Ferroalloys as you know is a commodity market and we have seen significant downtrend on their prices realization of the silicon manganese because of the geopolitical factors especially Ukraine war has affected the off take markets Europia, Europe that's why we continue to see. Pressure on the silicon manganese price realization in the current quarter. OK. So can you just explain to us what the realizations were this quarter and what is your outlook and guidance for the second-half? Realizations for this quarter average about 70,000 per metric ton for noise and we anticipate that the realization will continue to be more or less in the similar levels. We feel that there are Silicon Manganese demand and the price will increase only in the next financial year. Right. Mr. Big, thank you for joining us. This is Mangalam here. Wish you and your team are very happy. Festivity seasons as well and seasons greeting. Just wanted your thoughts on, you know, the impact of the production of silico manganese, you know in Odisha works being temporarily stopped. Your results were good despite production stoppage in this facility. Could you give us a number as to how much of the loss was on account of this and have? Operations resumed here. We had an accident on the one of the bunker areas which affected the production of the silicon manganese in Orissa unit. We lost about 4 1/2 months of production. We anticipate the restoration works to complete and the production up by end of December. Though we lost some of the revenue because of the federalized loss, our power division in Orissa contributed significantly. We were able to. OHH continues to make revenue from the power through bilateral PPA short-term Ppas and that sustained the margins. And what was the revenue loss, if you would give us the number and by when is it likely to resume? It's likely to resume by end of December from January and the revenue loss was about 5000 metric tons of error alloys. And the revenue loss is insured or is it just the production, you know, ramp up or fixing the thing which is insured? Just wanted to understand that. Actually the material damage is not so much as compared to the loss of business. Our insurance policy covers the loss of business as well as the material damage. Insurance claim has been launched and I think it will be crystallized once we resume the operations. OK. Can you give us more details about the Agri business? So you know, what was it in terms of revenues? You do have an avocado project land as well. Where do things stand in that? Every coastal we are currently in the in the stage of exploration and doing the research on the completing the technical studies for determining of the mind reserves. We anticipate that the final results of the technical analysis will be with us by end of the financial year post which we'll be able to finalize a mine development plan and comments on the operations. As regards the avocado, the business we are in the plantation stage we our endeavor. Is to have a total outlay of about 1200 hectares of avocado plantation in phases. In the first phase, we are in the process of completing the plantation for 275 hectares and so on and so forth. Every year we'll be adding about 275 factors of avocado plantation and we expect that the commercialization of the harvesting of the first fruit will commence from 2026 onwards. And how much do you expect it to generate in terms of revenue and margins for you and profitability? Avocado is a very long gestation plantation. Initially the revenues may be the yield from the avocado plantations maybe about 30 to 40% by the 4th or 5th year. When this starts fruiting, that's when we realize the full potential from the plantation and as we start in the phases, so we'll have the first plantation giving us the harvest in 26 and so on and so forth. So we'll have the entire 1200 hectares. Of the plantation giving the full fruits by 20-30 and from the estimates of the avocado prices and so in the current scenario, we anticipate a revenue of about 50 to $60 million by year 2030. Alright. And you know just give us a fresh update on what's taking place in Zambia right now. I mean you had some receivables from Zesco, you also realize some of those receivables what spending, what is the debt now post this you had to you know give back some money to the lenders etcetera as well. Is it business as usual? What about the Zambian power tariff which was expected to be revised downwards, what give us an entire overview in there? Yeah, Zambia has been a remarkable turnaround story as compared to last financial year. We had receivables, about $570,000,000 outstanding receivables from Cisco, which went into arbitration and posed the settlement in last December. Zesco has been continuously paying as on date out of $578, 000,000, we were able to settle over $290,000,000 and the present outstanding is about $287,000,000 and we anticipate another $105 million also we'll realize by end of the calendar year. And this has been declared to the stock market another $180, 000,000 we anticipate to realize in the year 2024. On the operations front, knock on the wood, things are very fine. Both units continue to generate power and continues to take the entire power And Zesco is also continuing to pay the full value of the invoice that we are for the power that's getting supplied month on month. So there is no outstanding receivables for the monthly supplies. And. As you mentioned, there was a outstanding long term debt of about $412 million in the MCL last year and out of which we were able to repay about $290,000,000 in less than one year and the debt now stands just about one $8 billion. OK, Just a word before we let you go on the consolidated debt on the balance sheet, you have reduced your debt. What is your plans on further reduction? What would you be comfortable with in terms of an absolute level? I'll start with the stand alone. As a standalone entity we are absolutely debt free as on rate post September results. In the first week of October we cleared off another 64 crores of the long term debt and standalone operations are totally debt free. We have no debt and it's our endeavor to also clear the long term debt at Mamma called risk which is just about one one $8 million by end of the financial year. Basically it paves the way for distribution of the returns to. Equity sponsors. Alright. And finally, Mr. Begg, I remember the last time we spoke, you said that you were looking at appointing some real estate developers to sell your Hyderabad land, which is close to around 60 acres if I remember that correctly. What's the update then? What's the realizable value? As of now, we have put the sale of the Nacharam land on hold. The reason being the land prices in that part of the city are continue to appreciate. We want to hold on for some time and we thought we we feel that we'll be able to release much better potential by holding it off for some more time so that we deliver better value. You right now. It will be a speculation if I say the current ongoing value. Alright, OK, alright. So we're going to let you go on that note. Thanks very much for joining in and speaking to us. So that is now our limited talking about a whole host of segments in their business. We need to take a short break now, but up next we'll put the focus on Biocon which is slipped in trade after missing seals as well as profit estimates. Stay tuned.
