Ultratech Cement S/Gdr

We must remind you that the discussion on today's call may include certain forward-looking statements and must definitely be viewed in conjunction with the risks that the company faces. The company assumes no responsibility to publicly amend, modify or revise any publicity statement on the basis of any subsequent development, information or events, or otherwise. As a reminder, All parties and clients will be in the listen-only mode and there will be an opportunity to ask questions after the presentation concludes.

If you need assistance during the conference, please email an operator by pressing star and then zero on your touch-tone screen. Please note that this conference is being recorded. I now hand the conference over to Mr. Atul Daga, Executive Director and CFO of the company. Thank you. Hand over to you, Mr. Dhaka. Thank you so much. Good evening, everyone, and welcome to the Q1 FI24 earnings call for Allstate. This is the third year in the running seeing a high convention of cement. Going by the positive movement seen in the first quarter, we are excited to see a double-digit growth in volumes this year as well. We are aware of the erratic heavy monsoons that we have seen earlier on during the last couple of months, and have seen almost all season in the country, resulting in disruption in the stretches early on. The good part is that the fear of anemic seems to be subsiding. Things are going well for our economy. FDI is gaining momentum. Inflation seems to be under control. Fuel costs are on the decline. Interest rates and rate hikes have taken a pause. Infrastructure in India is improving rapidly. What I can quote as one of my friends said, God's up this into the Indian. I want to share some more data points on road infrastructure in particular. The government has given a directive to spend almost 80% of the budgeted allocation of 2.7 lakh crores by 2023. Almost 1 lakh crore has been spent by mid-June. Balance spending of 1.2 lakh crores, as was advised by the ministry, will be completed on schedule. We want to achieve a speed of 40 kilometers per day of road construction this year. they will most likely reach the targeted km per day, then the speed at which the execution is taking place. This quarter was the highest showed execution progress. The new orders were less, but we don't get bogged down by the slow down of the market, which is, to my mind, very serious. But it's not just the roads, it is the good infrastructure that has a fascinating effect on overall economic activity in the country. and so many guests who participate in the growth story. Let's talk about our own work. We have commissioned 4.3 millions of capacity till now, and it will be on June as well, and our cash flows will be in good shape. These new capacities will further strengthen our presence in the Northeast and Western markets. As for our cash flows, After a cash bend of 1096 crores on our ongoing capital in this quarter, we have further reduced our next supply to women's 33 crores, which I think is a fabulous achievement. We have completed the first phase of our expansion plan which was announced in the term of 2020, taking our all-India capacity to 131.25 million times. During the course of various expansion programs, we have identified some opportunities which will be completed during this year, giving us an incremental capacity of 2 million times. This is spread in four or five locations as we complete the announcement. We expect, as I mentioned, we should be able to complete all these programs in this financial year. taking our overall capacity from 131.25 million tons to 135.25 million tons in India. Another very important point to note is the improvement we have made in our jitka conversion factors, as we included a chart in our presentation. An improvement of 0.04 will generate an additional volume on manual jitkas of 2 million tons. Let me now talk about our sustainability agenda, and we take it very seriously. We are fast-tracking our green energy program. For that, we are participating in a hybrid solar wind project of 58 megawatts, taking our total renewable energy baskets to 1.25 gigawatts by the time the program is completed. And also, we intend to increase the footprint of our WSRS to reach 425 megawatts from the 232 megawatts that we ended Q1 SI24 with. These programs will be completed by the end of fiscal 26. And when all these projects are completed, I'm happy to tell you that we will have more than 60% of energy as green energy on our expanded base. WHRS accounting for more than 25%. around 20% and renewable energy, which is solar and wind account is important at this point in time. Depending upon the prevailing cost structures and investment in time, it will still be a sustainable addition to our system line. Some two points which I want to send to your notice, more from academic interest point of view. Firstly, on fuel prices. Today's output is is trading around $115 dollars $115 dollars per ton after a short fling in dollar level for a very few days. However, most of the time the spot prices are for ship loading which is 2 months antes, average 2 months later. And give the cycle 60 day shipping time 10 odd days of inland movement and existing inventories of anywhere between 45 to 60 days the second consumption may be around 5-6 months later on the date you are talking about seeing the contract. Second important point to keep in mind is the moisture loss. For us, the landed cost is almost 10% higher on account of moisture losses which is what we consume and what we report. That total On a net, this is our cost was $194 metric ton, which has reduced to $178 metric ton for this quarter. Depending on the availability of site scope, we keep on optimizing the field mix. This quarter, our site scope mix was about 42%. Another point for your academic interest, We all, this is about lead distance. At AltaTech, you would have heard our lead distance being more than 400 kilometers. Last quarter, we were at 10 kilometers. But an important point to know is that this lead distance includes lead distance for movement of clinkers from the integrated stand to the grinding unit. More important to keep in mind is our ability to serve our customers. With the current network of our grinding units, our terminals of the country, more than 120,000 channel partners, and the dense network of warehouses that we have, our lead distance from the point when cement is available through service is only 270 kilometers. It's a sundown from 281 kilometers past Swabia. And I think this is a real lead since for our customers. So we are practically able to serve any customer around the country within 300 kilometers of our service point. And that's why I say we continue to lead by a mile. Thank you ladies and gentlemen and over to you for questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and 2.

Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the political queue assembles.

The first question is from the line of Amit Muradha from Access Capital. Please go ahead. Hi, good afternoon, Mr. Hargad. Thanks for the opportunity. So the first question is around the new tax regime. So have you moved to the new tax regime for all entities, like including Najwara?

Yes.

Okay. Okay. And on the fuel cost, the consumption cost was $198 in Q1 and $147 in Q15. So by Q3, we should expect, assuming $150 continues, we should assume $150 to flow through by Q3, right? Yes. So $150, if it's a price, you would mark it up for moisture losses. So consumption will be $125 to $130. Okay, okay. So fortunately today all you need is $120, $125, so. Okay, understood. And what would it mean directionally for your current dual cost, let's say you had in these KCAL terms or as a percentage? Okay. 2.34 was KCAL for this quarter. Okay.

And assuming like that of the 15, like... Should it go down to like 1.7, 1.3? I think 1.3 would be actually good.

Downward, I haven't done the math because the mix will also have a place. I would like to add, yes, this is our comment. See, the outage ratio of dead cogs is also not too high because 115 to 125 depends on the mix and the time. And As you all know, the availability of the Petco is very limited. And it's coming, major part of the Petco is coming from US. So, again, there is a time of, cycle time of about 60 to 65 pages. So, it's all different how much, what kind of prices. You know, Amit, to add further, it's a very dynamic situation. I had seen one data point and which I can share with everybody. The heat wave which is going on in China and most parts of Europe, the coal consumption is going up. Last year, China generated the highest ever power from its coal sources, and they are still consuming only captive coal. Our philosophy, or not philosophy, our hypothesis is that as in when China opens up and they will start importing sometimes soon, cost may not remain at these levels. Okay, understood. And on this blending ratio of 1.4 to 4x that you've achieved, can we now expect 1.5x maybe a year? It will improve. I'm not able to quantify, but it will improve further. And also, Infra is taking now 10-day cement. Very minutely. Okay. And this is the last one from me. Like, you've already achieved 90% capacity utilization in Q1. Like, as we gradually get into Q4, which is three points down the line, but commissionings, I believe, mostly are happening later in 25 and on. So, would you... capacity tightness or unavailability of such capacity? No, I think, as I also mentioned, there will be surface cement available from summer increase in slinker conversion ratio, the deep water netting, which will give me additional 4 million tons of capacity, and we will try and bring in some more capacity at a much faster pace. As and when we are ready, we will let you guys know, but I don't think we will fall short of capacity. We will not lose a single customer. Thanks. Thank you. We have the next question from the line of Sumangal Nivadia from Kutab Securities. Go ahead.

Yeah, good afternoon. Thank you for the opportunity. My question is overall, I mean, a very strong growth in this quarter. If you could just share what is the sense, what would have been the market growth? And I believe it looks like a great question. So in case we can add some regional color as to which region we have performed quite substantially versus peers or the industry.

I think we would have done pretty well across the country because, again, 89, 90% capacity utilization, which means average 85% plus utilization in most markets. The only market like South where the earth is small, so we would have lesser impact. As compared to that, practically everywhere, we would have outperformed by a mile. too early to comment I would wait for some more results but certainly like last quarter there would be a wide gap between us and the industry some regional color we can change I just told you, you benchmarked me with my capacity utilization everywhere. We are more than 85% capacity utilization. So the bigger point is that all regions in the country, East, West, North, South, Central, are seeing huge demand. Okay. Got it. So second question on the prices.

I mean, do we expect the market to drive margins for, I mean, we are entering a seasonally weak period, so how should we see margins shaping up for next month and what is given some pressure on prices that we should see?

We have seen marginal increases, not to rejoice or party, but we are seeing price increases in North and West. Okay. Some increases in the month of July. South and East are still not showing traction in prices, but from our perspective, when we don't have capacity available, our efforts would be to service our customers who are paying the maximum price. Got it. If I can just ask one more question. Overall, in our growth, the

over the next 5 odd years if you look at the last 10 years inorganic has been a potential part of the growth but now we don't see our name participating in the ongoing equation of opportunity so is it that inorganic is largely behind us in terms of growth and consumption and future taxpayers should be largely nominated for organic is that the right way to think?

No, you know, one of one or two places if you don't see our name that doesn't mean that you can say architect is not interested, we evaluate opportunities and of course, given the network that we have, network as in our physical plant network, unless an opportunity is value adding, value adding from both growth and profitability, we will not deploy capital in those assets. unless we will keep growing, so if not inorganic, organic will lead the way. In terms of market share, there is no constraint. I mean, we can still grow inorganically. Yes. Barring, I would imagine, West, no, not West, sorry, East, where, because the inorganic target sizes will be large, so we will be... Hitching some roadblocks in East. Regarding that, I don't see a challenge anywhere in the country. Okay, that's very helpful. All the best. Thank you. Thank you. The next question is from the line of Pinnakin Parikh from J.P. Morgan.

Please go ahead. Thank you very much, sir. My first question is on pricing. Now, earlier in the morning, one of your competitors highlighted that East India, they have lost market share and they want to prioritize volumes over here. Now, East India is also seeing a lot of new capacity come through. So, in terms of pricing, particularly for East India, what is the company's outlook for the remainder of the year?

Well, I think we have... mentioned earlier also, East, given the kind of growth the Eastern markets have and the new capacities coming in, East will continue to remain a very tight market in terms of prices.

So my second question is that I'm just trying to understand the energy cost match. The flight mentioned $178 as the consumption costs in Q1, which at today's prices works out to around $125, a broad 30% decline. Now, PECCO is 40% to 50% in terms of the overall energy basket. Is PECCO prices there to sustain at today's level for the remainder of FY24? Should we assume a 30% energy cost decline, or will the overall energy cost decline be lower than the headline PECCO cost decline because of the other views?

Well, Yeah, she told, if everything remains Jesus quo, and let's say today's petco prices are at $125 and that prevails throughout, then obviously you would see it translating into a 20% to 30% decline in energy costs. Understood. Again, Pinnakhin, I try to explain the math around it. What means two months forward loading? blah, blah, blah. So, today's pot, which is what July end, will come into consumption only by January. So, that's how the maths stack up. Understood. This is very helpful.

Thank you very much.

Alright. Thank you. The next question is from the line of Pradeep Kumar from Jefferies. Please go ahead. My first question is on your on your story on

... ... ... ... ... ... ... ... ...

So we are growing big in competitive cement. Now competitive cement requires 45% clinker. There are some players who are doing much lower clinker, which we will get impacted negatively. We have started with 45% clinker, so we are pretty bullish about it. Competitive cement is getting very well accepted. in the market. This is one reason why one of the factors driving our improvement in our data factor. Also, competitive cement is still not settled down across the country. So, as it settles down, you can see a lot of improvement in the data factor. Coming to the LQ3 cement, I think it's a long story, because once

As of now, there is no identified large deposits where the cement plant can be set up based on the LCC deposits actually.

And obviously, it requires a little high investment compared to the normal cement plant. So, yes, it is good for future, but I don't think anything is likely to... So, no, you might not see anything can be done for the next 4-5 years?

Sure, and just a question on other experiments. So, there was some increase in other experiments on a quarter-to-quarter basis, where volumes were actually lower. So, is there any one-off experiment which was part of this quarter and was not part of last quarter?

I think it's got a bit higher. Anything else? And... So, Q4 maintenance was lower, and... This quarter, the advertisement and maintenance costs were higher. Nothing, so nothing, no one-offs. These are routine expenses.

On trade expense, you mentioned, you know, it had an impact because of the tone in less market. Is that only which is, isn't for interior and front spaces, or?

Yeah, yeah, yeah. That was one one-off impact. I would not have been there, we would have locked the market with another 30 million tons of sale.

These are my questions. Thank you. Thank you.

Thank you. The next question is from the line of Hashish Jain from Macquarie. Please go ahead.

Sir, my first question is... Sorry to interrupt, sir, but the line for you is not loud enough. If you could please use the handset and be closer to the mic, it would help.

Ashish, you're not very clear. There's a lot of static noise. I'll just tell that. All right. Thank you. Next question is from the line of Indraji from CLSA. Please go ahead. Hi, good evening, sir. A few questions from my side. We have reduced our usage of Petco. Is it just because of availability or on landing basis, oil is now cheaper than Petco for us? Availability. So, on landing basis, Petco is much cheaper in energy terms, which is better. Usually, it's more about availability of Petco. And what would have been our alternate fuel usage in this quarter? Alternate fuel was how much? 5%. 5%.

And how do you see that, you know, progressing?

So, yeah, we have taken a target to go up to 9% to 10% by the end of next fiscal year. A lot of investment was required, which we have taken up in this financial year close to 250 crores. Yeah, 250 crores of investment is happening in this financial year for shredders and feeding systems, handling systems for alternate years. and currently we are tying up also for alternate fuel. If we look at it in volume terms, you know, it's more than a million, more than 1.2 million tons of alternate fuel that we are already handling on a nanometer. That's huge volume. But anyway, as a percentage is what it is, so. Yeah, no, that makes sense. And given that we are now embarked on any change in our or what would be our No, no, no. We do not have too much of so it's all within my . Thank you. Thank you. Thank you. Question is from the line of from .

Please go ahead.

I just wanted to a couple of questions. One would be the entire renewable energy mix to understand would Altera take, I know this is a subsidiary of the entire renewable energy, but would the global Altera take this capital on this or would you buy it from outside? And based on where we are, what is the cost difference between the power you get from these renewable assets versus their own CCT? I'm not sure these would affect CCT or tech. Any difference in costing?

Yeah, so first and foremost, we will do a group captive scheme, so we have to participate with about 297 crores of equity into the SPV. And the second question that you asked was about pricing. So effectively, and because we are supplying power to multiple states, average Average landed cost, because there are transmission losses, open access charges, average landed cost would be around 5.25 per unit. As compared to that, the cost of power currently would be around 7 to 8 rupees per unit.

Yeah, I'm talking about average cost of power for our individual units. Okay. Okay. Okay. so as we mentioned we are reaching 155 plus 4 more let's say 159 already and we will announce perhaps

maybe if not September, this is June, September quarter or December quarter for sure, our next phase of growth which will take us further up from 155 upwards. So we are not going by what peers are doing. Our plan is very clear. We see India as a growth market and we are investing behind growth.

Thank you so much for your show.

Thank you. Thank you. We have the next question from the line of Sanjay Nandi from Veech Capital. Please go ahead.

Yeah, good to see you, sir. Congrats on the good sort of numbers. Hello. Yes, please.

Yeah. Sir, can you please guide us what kind of profit, like, Bitcoin prices we can visualize in the coming quarters? Just a kind of guidance. Very difficult. Very difficult. If you can tell me what the index will be two days and I will tell you what the price will be. Can you? It's very volatile. To be honest, it's very volatile. Got it. In 10 days, the prices have galloped from 110 to 125. It can come down also. It can go up also. I have no idea. Okay, sir. Thank you, sir. Thank you also much for that. Thank you. Thank you. The next question is from the line of Thomas Moraga from Access Capital. Please go ahead. Yeah, hi. Thanks for the opportunity again. So on this next phase of expansion, like the last two phases that we've announced, we've seen that the GDP cost per person has been quite low at $65, $70 per ton on average. Is it fair to say that the next phase of expansion could be like more greenfield and therefore the cost could be a bit higher? Uh, no, we will, because it will continue to remain a mix, and if I look at my next page, um, which one is green? One. Ah, this is coming now, right? So, I think, you know, I'm just looking a mental map on what is happening. So, it will still be a mix of green and brown, and cost will be very competitive. And I think earlier you had mentioned that you have a target of 200 million ton capacity, of which you are ready for 185 million. So, the numbers can hold for the future. Yes, absolutely. Absolutely. Bang on. So, we will clearly, you know, by 2030, we will surely 20, 20, anywhere between 20 to 30, we will reach a 400 million ton mark. And as I mentioned, the blueprint of our next phase of growth, the phase C, if I were to call, is almost ready. It will go to our board perhaps next quarter. We have, we are considering it, uh, you know, final touches. Hopefully, it goes to the board next quarter and I can announce it next quarter. Oh, God, this is helpful. And also, on Super Bala, is there any update or timeline for the arbitration? Arbitrations never have timelines. It can go on for pretty long. Okay, understood. Lastly, on the 24 cases, like, do you have a refresh on that or do you find it? It will be anywhere between 6,000 to 7,000 crores. Okay. That's all. Thank you. Thank you. The next question is from the line of from Goldman Sachs.

Please go ahead. Sir, thank you for taking my question. Sir, you had to explain something back how we are running at high-capacity utilizations and we would endeavor to

not to lose out on customers. And that's not a bad problem to have if the demand is so strong.

Now, given the fact that, you know, you are at such high capacity utilization, can you give a 12 to 18-month roadmap of how prices are going to head?

I understand it's difficult to predict in the near term, but any sense on... They will change and hold it. They will change it. Okay. I have seen, so the undercurrent, if I can be candid, the undercurrent in the heavy monsoon months, we have seen five increases happening. It is never heard of. How much to pay where? It's like two to three rupees or five rupees increases have happened in certain geographies and they are switching, so which is good enough. Okay. That's what I'm saying. The undercurrent is very strong, and you're talking about 18 months, I'm talking about 9 months. January, March will 24. The election, the capacity is available. We are being ramped up and we're bringing in more capacity. I already told you about 4 million tons coming in this year, more capacity. We are working break next week. We might try and commission some of our capacities earlier, markets will be very strong, which will entail price improvements. Let's hope for that. I'm telling you it's going to happen. Okay. That's reassuring. My second question is, in your presentation, is it fair that this country has grown faster than non-trade? I don't know how you are saying that. 26% growth, I think, non-trade. Yeah, yeah, yeah. So I mentioned that statement. I've given you an additional point that rural markets, yes, trade market. Rural is 65% of trade, and that is going at 24%. So, yeah, trade is going at a much higher rate. Thank you. Thank you for both those answers. Thank you, Kaiser.

Sure. Thanks.

Thank you. The next question is from the line of Ashish Jain from Macquarie. Please go ahead.

Hi, sir. How are you doing? Sir, my question is, you know, on the green power, you know, So, that 60% as you said is not on operational basis, right? That is more on your capacity share again. I didn't understand. So, you see on if I am consuming 1000, I require 1000 megawatts of power, I will have 60% as green power. Okay. Based upon this 1.2 gigawatts as you said. Yes. We will reach 1.2 gigawatts of renewable energy and 425 megawatts of WHRs. Both are green. And for 155 million per hour, how much power will be required? About 1,200 megawatts of power will be required, so 720 megawatts will be green energy. Okay, okay. And that will be highly remunerated. Nobody asked the question, which is very good, but yeah. Sir, secondly, in terms of capex, what is the capex you will need for this? Is it just if you have any approach to get the equity investment or? Yeah, that will be our further discussion. Okay. Sir, secondly, in terms of, you know, are we offering close to 100% utilization now, given, you know, in the same case itself, we are at 90% for the quarter. So, can you give some sense of a thinker utilization? It's more than 90% for sure. I think it's more than 90%. Okay. Sir, lastly, on power, I just wanted to ask, sir, like, given our view on power, are we today, you know, heavily talking about the prices available, given it is clearly attractive pricing, or we are still sticking to whatever strategy we have? No, no, no. We are also dynamic. I have increased my inventories. At the end of March quarter, we were 38 days off stock. Today, we are at 58 days off. We ended the quarter with 58 days off stock. Because, as I mentioned, if you heard me about China, I still feel China might start including. So prices could rise in the near future. What is the price trend there because I think that is mostly imported coal, right? Maximum is imported coal. We also have our FSA which is, you know, the linkage coal. Maximum is imported coal. If I were to look at percentages, just one second. There is Coila. fuel mix, TPP, just one second. Where is it? Where is it? So, 46% is imported coal, 7% indigenous coal, 42% coke, 5% alternate fuel, and midnight. Got it. Okay, thank you so much. Thank you. Thank you. The next question is from the line of Shravan Shah from Polar Capital. Please go ahead. Hi, sir. Most of the questions have been answered. Just a couple of things. First, in terms of the WHR, so currently 232 and we say 425 by FY26. So by FY20, 420, and by FY25, if you can help us, how much more we will be adding? Yes. we will have . This year. FI24 will reach 300, and I think between 25 and 26 . OK. And same way in terms of the solar and other . Yeah, yeah. So maximum will come by the end of 25. Sorry, sir. By end of 24, which project? There is maybe 100 megawatts more is in pipeline. 62, yeah, 6200 megawatts is in pipeline before March 24. Okay, okay. And for this WHRS, when we say 5-7000 crore capex for this year and next year also, I believe, this also includes the capex of the WHRS? Yes, absolutely. It includes my expansion capex, modernization, routine capex, WHRS capex, alternate cure and everything. Okay, okay. And when we say we are looking at double digit volume growth, so is it fair to say that it should be middle, mid-teen kind of a number that one can look at? I will not comment on that. So I'm already giving you an idea that industry will definitely see more than 2%. Okay. But in terms of the, considering the broader cost savings, including the lead distance reduction and everything, on broadly and the plus now the power and fuel, so broadly from now onwards, we should be seeing improvement in EBITDA parts on CO2 basis. Yes, most certainly. I hope, in spite of monsoon maintenance costs, I think we should do well in Epitaphata. Okay, okay, okay, okay. But this quarter till now, since June, in terms of the blended realization for us, still we haven't, you mentioned that we have seen a true 5 rupees high in some places. But on overall blended basis, till now we haven't seen any decline in prices for us. No, no decline. Okay. Okay. Let's do it.

Thank you, sir. All the best.

Thank you. Next question is from the line of Naveen Shahdeh from ICICI Securities. Please go ahead.

Yeah, hi.

Thank you. Yeah, Naveen. Hello? Hi, Naveen. Sir, the current participant seems to have dropped from the question. Yeah, yeah. We'll come back. Okay. Take the next one, please, sir. The next question is from the line of Bhargav Maheshwari from Asian Market. Please go ahead. Can you please break down the 648, the radio power into the, what is the solar and wind power in this? 200 is wind and 400 is solar, if I remember right. Just give me one minute, I'll tell you. If you have any other questions, then I can come back and tell you this. Yes, sir. Sure.

What is the blended mix for this annual power at a budget level for this 48 megawatt? We are looking for CLF utilization for this particularly.

About 40-45%. And 200 megawatt is wind is 368, solar is 260. Okay.

And the last question is from my side for the next one and two year where we are seeing the heavy introspective demand primarily the non-trade in the OPC segment. How will you see the price difference between the trade and non-trade versus ETC OPC?

The gap between primary and non-trading. Any chances you will see for the gap between the non-trade and trade? Okay. Trade prices will go up, yes. Non-trade is already high. Trade prices will go up. Okay. No further increase in the non-trade is the difference? No, I don't really know that. You know, it all depends upon how the projects are coming up and how we negotiate. Obviously, aim will be to realize more. Got it, sir. Okay, sir. Thank you. Thank you. Thank you. The next question is from the line of Jyoti Gupta from .

Please go ahead.

Good evening, sir, and thank you for a good set of numbers. I only had one primary question to ask. That is, we have reduced on a lead . Could there be a which could have been reflected this quarter? Second is, do you have the benefit in terms of the linker conversion? Because I've seen the presentations with something like 1.44. So while I was expecting, you know, that the fuel mix, in fact, reduction of the cost will actually be reflected this quarter. But apparently, it's not to the extent that they were expected. Even if the prices had gone by 100 percent, the impact of the fuel reduction would have upset the reduction in the prices. So in the second quarter, obviously, you are saying that we will see improvement of the virtual buttons. So what all factors will actually contribute in the improvement of the virtual buttons?

So first question was about the benefits that we accrue because of efficiency improvement are eroded by the digital charge was one and any other additional That was one major item because busy season surcharge has been eating away most of the improvements.

Is it, are we not having a railroad mix of 20-30? I'm sorry, correct me if I'm wrong. And busy season surcharge has, earlier it used to be on a seasonal basis, but now it's full year around the year.

It's full year, yeah.

So, will that actually, I mean, will that not be negated? I mean, like, this must have been factored in these rate costs.

So this adds on to my 30% road, and it's pretty high, I think 9 rupees. 30% rail, sorry. On the 30% rail network, that adds on to my overall costs, which negates the benefits that we are able to achieve on efficiency improvement. Luckily, food prices or diesel prices have not hardened over the last quarter. Your last question, which I remember, was about what will be the drivers for profitability improvement. Of course, other than prices, you will have the benefit of fuel price reduction, logistics cost improvement, and the increasing green energy share, which helps my bottom line.

So will that really reflect in the second quarter number?

No, no, no, not second quarter. The green energy projects are coming up by FY25. The big project which we spoke about on this call will come up by June 25. That is where it will reflect. Second quarter or third quarter? Second quarter I would not want to comment because it's raised. Third quarter you will see the benefit of improvement in prices followed by... fuel price gain. Logistics, if there are some other levies which take in or anything else, logistics will also drive home the benefit.

I think that we have actually advancement by a lot of B and C players actually applying, you know, movement of a lot of components across the region. I don't know. I mean, I'm sure you are that positive about the price improvement. After festivities, I'm sure there will be some improvement in the price.

Yes, yes.

And I don't think that it's more than 5 rupees per bag if all that happens.

If it is 5 rupees per bag on 100 million tons, we are selling 2,000 crore bags. 200 crore bags, sorry, 200 crore bags, so that's a huge amount of money.

But then he will say it will be negated by no improvement in your cost because he says, he's telling, he says that the green car will actually come by 25.

Jyoti, the big project of 648 megawatt will commission by June 25. There are several small projects which are getting commissioned during, as I said, about 100 megawatts is another project. Multiple small projects which are coming in during this year.

So, effectively, we will not see much gain coming from the fuel price and price. I mean, just at my calculation on the composition where, as you said, I had something like 46 percent of the cook side, 35 percent, 85 percent on the air side. Looks like There is no improvement as such that we've seen in the third quarter on the fuel side, isn't it?

No, we will see a significant improvement in fuel. We will see an improvement in fuel because of fuel. Fuel prices or the power and fuel chart that you see will be a declining chart in alternate.

Yeah, because power, I believe, I mean, if it's a 70 unit and at 6.5 and it goes steadily, it decreases by 30 paisa, body paisa, then somewhere you should be, they should be against it. Absolutely. Absolutely. But that does not seem to happen.

I request you to please rejoin the queue for questions. Yes. Thank you. Thank you. The next question is from the line of Uttam Kumar Sriman from Access.

Thank you.

Yeah, thanks for the opportunity, sir. Sir, my question pertains to your RMC business. This quarter we have grown by 37%. So, this growth will continue for the remaining of the year?

I hope so, and I think it will.

And sir, how much currency RMC plant we are operating and what would be our target for addition of RMC plant in next two years?

232 plants are in operation. We hope to reach a milestone of about 300 such plants by the end of this year, yeah.

Okay, okay, okay, sir. Okay, sir. Thank you so much.

Thank you. The next question is from the line of Naveen Shahdev from ICICI Securities. Go ahead.

Yeah. Am I audible now?

Yes, please. Yeah, thank you for the opportunity. I have a couple of questions. One, on the de-bottom making of 4 million tons, is that got to do with the increase in blending ratio that gives an opportunity, or we are having a commensurate clicker de-bottom making of roughly around 3, or I mean around 2.5 million tons, which will help get those volumes? We have Tafish and Twinker Naveen and these 4 million is all grinding. These are all grinding capacities. Primarily so that you can see this grinding side. Grinding side, yes. Okay. Then the other thing I just wanted to ask was about this other operating income. I see in this quarter it has gone up by almost 92 crore on a sequential basis. So, I just wanted to get some color. Is there any more booking of incentives that has happened this quarter? There's nothing on income tax. There's no abnormal incentive. My colleagues are just checking on it. What do you mean by this? Pali as a unit started getting its incentives, but there was 14 crores or something. There was only 14 crores. Yeah, yeah. I think it's volume length, maybe. I don't really have an answer. Sure, sure. I just wanted to get a sense because... Yeah, it was nothing abnormal. Sure, I was just saying that March volumes were higher and June was sequentially a little lower, but... Yeah, yeah. Nothing that comes to my mind. But I will just get... Sure. Just one mark, as you said, pricing, of course, is heavy in current markets. In fact, some markets, you said, have seen an increase. So, and the excessive fuel cost benefits, demand continues to grow. So, very broadly, for an exit FY2424, like, you know, last quarter of this fiscal, the EBITDA per ton that you could look at should be, would you write something like 141500 as a number for that mass quarter if, of course, things remain the same, the pricing and cost and everything? No. Everything remaining same, it will improve. I will not write you a number, but it will be significantly higher from this quarter.

But the point is everything remaining equal.

And it's not a static world. Yeah, yeah. I understand that. Like I said. Things are looking positive. That's the most important element. Yeah, I think, Naveen, my colleague clarified, it's generally incentives which I started taking in. In the other option incomes that you were asking. Sure, so from an annualized, so let's say from a quarterly run rate. Yeah, yeah, yeah. 200 crore, can you come up with a run rate going ahead? Certainly possible about it only. Sure, and just one last thing if I may repeat. You said pricing, of course, in current environment, the demand being strong is, of course, looking good, and it should pick up during quarters. Next year, which is, like, you know, after the elections, next year, typically demand may get a little soft, like it happened in FY20, where FY19 saw 13% plus kind of a growth, but FY20 was just flat. So if that happens, even in that scenario, would you be confident on pricing, or...? It's too far to talk about. The market generally is suffering also for a few months after elections. Thank you so much for the opportunity. Thank you. Thank you. Ladies and gentlemen, we will take that as the last question. On behalf of Altitude Infinite, that concludes this conference. Thank you for joining us. You may now disconnect your line.