ASHAPURMIN - Ashapura Minechem Ltd Share Price

Management provided an optimistic outlook during the Q1 FY26 earnings call for Ashapura Minechem Limited, emphasizing both their Indian and international operations, particularly in Guinea. Here are the key forward-looking points:

1. Growth Projections: The company expects to export 15 million tons of bauxite by FY27-28. Current bauxite export capacity is at 16 million metric tons, projected to increase to 27 million metric tons by Q1 FY27.

2. Financial Performance: For Q1 FY26, Ashapura reported a consolidated income of INR 13.55 crores, an 89.8% year-on-year increase, driven primarily by operations in Guinea, contributing 79.3% to the top line. The EBITDA amounted to INR 187.73 crores, marking a growth of 106.8% year-on-year with an EBITDA margin of 13.85%. The profit before tax (PBT) stood at INR 131.84 crores, growing 102.5% year-on-year.

3. Demand for Bauxite: Management expects a 5-6% annual growth in aluminum demand due to various factors, including the rise of electric vehicles. Bauxite prices are anticipated to remain stable, which supports long-term confidence in the Guinea operations.

4. Expansion Plans: In addition to the expansion of bauxite operations, Ashapura plans to ramp up its iron ore business, focusing on partnerships for contract mining and logistics to enhance profitability.

5. Infrastructure Development: Over the years, the company has invested more than $135 million in Guinea, primarily to establish mining infrastructure and port facilities vital for scaling operations.

6. Focus on Product Development: The Indian segment will see continued growth through capacity enhancements and the introduction of high-value product lines, particularly in industries such as animal care and environmental protection.

Overall, management conveyed a solid strategy to ensure sustainable growth, leveraging the company's strong resource base and operational efficiencies amidst a supportive macroeconomic backdrop for bauxite and aluminum.

Q&A Section of Ashapura Minechem's Q1 FY26 Earnings Call

Question 1: What total amount has been invested in Guinea till now?

• Answer: We have invested more than $135 million to date in our Guinea operations. This amount covers various expenditures, including the establishment of roads, ports, and mine development.

Question 2: What is the timeline and progress of the iron ore mine in Guinea?

• Answer: We have a strategic agreement with a local beneficiation plant, and while it's too early to share specific numbers, we expect significant contributions to the bottom line in a few quarters, as the mine is in the last stages of development.

Question 3: Can you explain the expected volume growth leading to 15 million tons by FY27-28?

• Answer: We anticipate a linear growth toward our target, but there might be variances due to seasonal factors. Our current port capacity is 16 million tons, which we expect to enhance to 27 million tons to meet our goals.

Question 4: What is the expected EBITDA margin with the target of 7-8 million tons?

• Answer: While I can't provide an exact figure, our current EBITDA can be derived from our reported numbers. Nonetheless, we expect our EBITDA per ton to improve as our volumes increase in the coming quarters.

Question 5: How is the iron ore managed, and what is the arrangement for export?

• Answer: We are working with a local beneficiation plant to upgrade our low-grade iron ore for profitability. Our current contract focuses on local sales rather than exports.

Question 6: What has been the pricing for bauxite recently?

• Answer: The current bauxite price stands at $74.5 per ton, delivery to a major port in China, reflecting market dynamics influenced by various international indices.

Question 7: Are the ports developed in Guinea exclusively controlled by Ashapura?

• Answer: Yes, the ports we developed are 100% owned and operated by us, focused solely on facilitating our cargo.

Question 8: What is the company's plan regarding debt and guidance for FY26 dispatches?

• Answer: Currently, we don't offer yearly guidance, but we are optimistic about our linear growth leading to our targets for FY27-28. Most of our debt is managed effectively, particularly in our India operations where we have low to no long-term debt.

These answers provide a comprehensive overview of the key points discussed during the Q&A session, reflecting the company's focus on operational efficiency and future growth.