Ultratech Cement S/Gdr

Ladies and gentlemen, today and welcome to the Alta Tech Cement Limited Q2 F524 Earnings Conference Call. We must remind you that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risk that the company faces. The company assumes no responsibility to publicly amend, modify, or revise any forward-looking statement on the basis of any subsequent development, information, or events or otherwise. 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 call, please signal an operator by pressing star, then zero on your touchtone phone. 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, and over to you, Mr. Daga.

Good afternoon, good evening, everybody. Welcome to the second quarter earnings call for Alta Tech. With me, I have my managing director, Mr. Casey Chawar, and my colleagues from my finance team, so that any questions that arise can be answered fully. Let me start by saying, talk a bigger picture about cement as an industry. I personally believe cement is not for the weak-kneed people. Go anywhere in the world, it's a long-term story connected to the fundamentals of the economy. So if you're looking for a growth story, then emerging markets cannot be ignored. And within emerging markets, I'm sure everybody agrees that India is the fastest-growing large-size economy, and then that's the place to invest in. If you're investing in India... then infrastructure sector is surely generating growth, which is likely to see investments. And for infrastructure, cement is one of the key pillars for growth. Let me now jump on to the burning topic of costs and how it has been impacting the industry. When Russia war started, coal was... coal shot up to close to $400. Petco was close to $260. We have seen ups and downs from there. And it is not prudent, according to me, to analyze the costs from a given date. Input costs are never static. Every day can be different. Petco costs flirted with about $100 mark for a very brief period in the first week of June or somewhere around that time, June or July, and now have climbed very rapidly. They climbed back to $140. Whoever was able to book shipment in that period will probably have a short honeymoon in Q3. Besides coal or power and fuel is not the only cost driver, second quarter is always a very high maintenance cost quarter for cement industry. At Ultratech, we had almost 24 kills under shutdown, maintenance shutdown, which is a routine operating parameter. Besides, we are still celebrating our 100 million tons of production dispatch and sales in one financial year, which happened last year, for which a one-off special bonus was given to the employees amounting to almost 40 crores. I thought of calling it out as a one-off. And we have to wait and watch how crude behaves given the global scenarios that are emerging. Similarly, selling prices also keep fluctuating. With the recent price hikes that have happened, it's definitely a good thing to have on on the P&L, but I believe it should be a wait and watch game. Given the pressure on costs, we expect that the prices should hold, unless some companies are not able to sell at a higher price and they start peering differently in the markets. As of today, beyond the quarter ended September, I would definitely want to highlight how the prices are shaping up. Comparing to the exit of June, all India prices are up 7% to 8%, which was about 3% or thereabouts from June exit to September exit. But if you were to look at the quarter average prices, quarter average prices were marginally at 1% or 1.5%. over the previous quarter. Each region has been experiencing good traction in prices, and as we speak, currently all the prices are holding steady. We have seen price increases. Now, depending upon the comparative period, I am looking at comparison over June exit. The prices in East are almost up 7%, 8%. Similarly, Maharashtra is up 7%, 8%. South would be maybe 5%, 6%. North, again, 6%, 7%. Central is perhaps flat at the moment. Let me now quickly touch upon our expansion. The 22.6 million tons capacity expansion, which is in progress. Work is going on on full swing. we are confident of meeting our timelines. In addition to the 22.6 million tons of capacity that is ongoing, we are adding three more slag mills, totaling to 1.8 million tons, which will get commissioned along with this 22.6 million tons. So effectively, the second phase of growth will be 24.4 million tons. At the end of this second phase of growth, we should be reaching 159.65 million tons of capacity in India. The target is, let's say, June 25, plus minus. But as we start commissioning, we will gradually keep commissioning projects one after the other, and we will update you closer to the dates of commissioning. As I already mentioned, most of the locations are tracking very well on execution. During this quarter, we have, which is very visible with the kind of cash spend that we have had. We have spent almost 2,545 crores on CapEx. A large portion of that CapEx was towards our expansion programs. In addition to that, upwards of 600 crores was spent on working capital. We consciously built inventories of fuel given the short window that was available where prices were low. We expect to bring down our fuel stocks back to normal levels of 45 days of inventory by the end of March 24. We continue to remain negative in spite of bulking up our working capital. We continue to remain negative negative working capital company. Our net debt at the end of this quarter has risen to 4917 crores from the previous quarter. This is the consolidated number but this is as per plan and we are not really concerned about it. We will be able to push our net debt down further as we progress into the season time for cement industry beginning this quarter. You would have seen that we have grown 50% in domestic volumes. Along with international volumes, the effective growth is close to 16%. This is in spite erratic monsoons playing havoc in different parts of the country, disrupting smoother movements of material. I want to again call out the cement lead that we have achieved. We have achieved about 403 kilometers of lead, and the secondary lead, which is from our warehouse or railheads to the customer, is dropped to about 40 kilometers only. This clearly shows our capability and ability to serve our customers, which is supported by nearly 1,100 warehouses, 280 railway sidings, as also 52% of our dispatches are directly to our customers without having any stoppage in between. The commentary will be incomplete if we don't talk about environment issues. Some people do get concerned about cement sector because of its high emission norms. Well, as I said in the beginning, India needs infrastructure, which needs cement. And cement manufacturing, as of now, is still with limestone and fossil fuels. And fossil fuels remain to be the main source of fuel in the country. So there will be emissions. It is important to keep in mind how we are investing behind the reduction of carbon emission and continuously progressing on that path. As we speak, our various investment programs that are in place will take us to 60% non-fossil fuel energy by the time we complete our current phase of growth. You would have already heard India is bidding for 2036 Olympics. That sounds fabulous for the country and it's music for our ears. With that, thank you, ladies and gentlemen, and I hand it over for questions.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. The first question is from the line of Amit Murarka from Access Capital. Please go ahead.

Hi, good afternoon, Mr. Murarka. Thanks for the opportunity. On the expansion program, Rick, you had mentioned in the last call that the next phase of expansion is being worked on. So is there any progress or by when can we expect a formal announcement of the same? Yeah, so it's almost stitched up. we will put up to our board and come back to you before the end of this calendar year. Okay. And this is in line with that 185 to 200 million ton capacity? Yes, absolutely, absolutely. In fact, our chairman had already put down his vision, articulated the game plan of doing 200 million tons of cement in India. We are very much on course for that. Okay, good. And the first half CAPEX seems to be a bit high versus the guidance. I think guidance was 6,000 to 7,000 crores. We seem to have spent about 4.5 already. True. No, so again, don't analyze it. My guess is while there's a bulk of spending has happened now, you might not have a similar level of spending, but 6,000 to 7,000 crores for the year should be a cap expense. And in case the team is able to, you know, race ahead, we are more than happy because the faster we complete the projects, the faster we will be able to bring cement to the market. Sure, got it. And any guidance on fuel cost for subsequent quarters? As of now, so if I look at it, this quarter, the consumption price was $138. Petco. Petco was $138, sorry. So, but Petco is only 39% for us. As of now, October, December quarter should also see... southbound movement in prices of fuel? Yes, just to add upon, I am KC Jamariya. The fuel market is very volatile, in particular because of the geopolitical disturbances, etc. So, let's see how it moves forward. If the geopolitical environment gets stabilized, then there won't be much of movement here and there. Otherwise, it's very difficult to predict, actually.

Sure, yeah.

So, Ahmed, to be specific, I think we have put it down in the presentation itself, the effective consumption cost, blended fuel consumption cost was $152 against $178, and pet coke was $138.

Sure, I'll come back in the Q&A for more questions.

Thank you. The next question is from the line of Rashi Chopra from Citigroup. Please go ahead.

Thank you. Just on the pricing, you have given the change in trends versus the June exit, but where are we versus the average of the quarter that you just reported?

Average of which quarter you're asking about?

Please write the September quarter. Whereas what price is versus that?

So from July to September, Average about 3% up. No, one second. Average, average, average. 5% up. Inside I have indicated that Rashi in the presentation also. Slide 18, it's about 5% up. That's October 23, I've already given a heads up.

Correct. No, just regionally it's possible to get that.

Difficult Let me work it out and I can share it separately.

Okay, sure. Then what was the proportion of trade volume this quarter? 7% trade. All right. Just in the 2.5 million tons capacity that you've added in this quarter, 1.3 million was in West Bengal in July. Where is the remaining 1.2 million?

So that was part of the de-bottlenecking? Yeah. So we had announced that 4 million tons de-bottlenecking. Out of that, 1.2 was the Magdala grinding unit in Gujarat. Okay.

So now you're left with 3 million tons of de-bottlenecking this year?

Yeah, 2.8 to be precise.

All right. Okay. Thank you.

Thank you. The next question is from the line of Naveen Sahadeo from ICSS Securities. Please go ahead.

Yeah, good afternoon, sir, and congratulations on the good set of numbers.

Sir, first question was on the fuel cost. So you already gave numbers that blended is 162 and pet coke is around 138.

And current spot rates, as we understand, Petco could be more like 130, 135 and imported coal also around 140, 145 range.

Yeah. Could you share what was the average imported coal cost for Q2? If I'm not wrong, it could be more like $150. I'm just trying to do some backward. Yeah, you're right. I'm on about $181. $181. Right. So, versus that, if the current spot rate is still at 140, 145, it could still mean at least 100 rupees per ton saving in fuel cost in the coming quarter? No, no. Which quarter would you estimate that? December, because you would have inventory and 180... Naveen, let me explain the concept of the spot prices. When the spot prices are being quoted, let's say 19th of October, they are for two months ahead of, loading is two months ahead. That's point number one. Those are spot prices. Then give or take 45 days to 60 days of shipping time, clearing time, reaching the plant. You have, I didn't put the slide or didn't mention it, but I'm carrying inventory of 60 days at the end of this quarter. The spot price that we talk about will not come into consumption before March 24. Agreed. But that logic, I would actually want to cancel in a much higher savings because in mid-July or in month of July, these imported rates were well below $120 also. Okay. I will tell you, typical of stock market, if you put a buy order, for 10% of our company, what will happen with that stock price? It'll go to the roof. All right. No, because you're on a serious note. You know, pet cook market is a very, very small market. Today, if anybody steps out to buy bulk quantities, the prices will just shoot up. So it is identical the way the market behaves. Pure phenomena of demand and supply. Please don't annualize because that's the message which I tried to give in the beginning of the call. Don't annualize the cost or any number. No, I appreciate.

Then I'll let you just put it simply. How much more savings can we expect in the coming one or two quarters?

Good question. Next question, please. So I know I'm not able to reveal that on the call, Naveen. So this is specifically for the call is for this earnings performance. Yes. On a serious note, not to leave Naveen unsatisfied, the cost curve is moving southwards. Yeah, next question, please.

Thank you. The next question is from the line of Indrajit Agarwal from CLSA. Please go ahead.

Hi, sir. Thank you for the opportunity. I'm just trying to bridge the net debt trajectory from June quarter. So we had about 2,469 crore last quarter, and now we have about 4,920 crore. And the CAPEX and working capital is taken together with 3,100 crore kind of outflow. And my back of the envelope calculation. Sorry, plus the dividend gets paid out 100% in this quarter. That is close to 1,100 crores. Yeah. All right. So that was... Thank you. And just to remind us again, how much inventory we are carrying right now versus 45 days average? 60 days. 62, 60? 60 days. 60 days. And... 45 days, we have built up to 60 days. And mix-wise, it is still the same, the inventory that we are carrying there in the sense... Yeah, so, you know... The consumption of pet coke from 40% could go up to 50%. It would be range-bound like this. And on a landed basis, pet coke, how does it fare versus coal today? On a landed basis, effectively, pet coke becomes cheaper. Certainly, the traded price is also economical. But the gap is not too big, actually, no? Because the petcoke prices are now, now petcoke is getting traded at around $140 or so, actually. So now, not a big gap, actually. Coal is also at $140, but yes, some weightage of the caloric value. That's why the effective price of petcoke is still marginally cheaper. Sure. And my last question is, based on your experience, what moves Petco more? Is it crude prices or on the demand side? Demand supply. Demand supply. By and large, it's nothing to do with the crude prices. It's purely, as Atul said, it's demand supply.

Thank you. Thank you.

The next question is from Mr. Satyadeep Jain. Can you hear us?

Yes, I can.

Yes, please go ahead with the question.

Hi, thank you. First question on the capacity expansion that you mentioned, achieving 160 million tons before take by 2025. Beyond that, the next leg of expansion should be assumed that the company will start committing to it after this expansion is completed. So the whatever 25, 30 million ton capacity comes 24 months or from there, or is there potential to maybe start working on it relatively soon so that it doesn't get so staggered? And tied to that would be how much more debottlenecking capacity potential could be there in the existing capacity base?

Okay, to your first question, we will not wait to complete so that the reason being that we should have a continuous supply of capacity available given the high growth trajectory that we are seeing in the Indian market. So we will definitely start work on the third phase of growth very soon, the moment we get a nod from our boards, which, as I mentioned, we will be presenting before the end of this calendar. As for de-bottlenecking, I think as we progress, if we unearth something, which we'll be more than happy to pick up on the side. As of now, on the existing projects that are ongoing, nothing significant has been identified.

Okay. Thank you. Secondly, on the eastern market, you mentioned rains and different factors. They do slow down. Any... ballpark estimate on, in your estimate, what could have been the industry volume growth for India as a whole and maybe East could have been maybe low single digit and given that now the quarter has ended and going into October, have you seen maybe a recovery to more normal volumes in line to the rest of India?

East continues to be slow and our expectation is maybe 4-5% growth is what we'll see for the industry in the eastern corridor, against which we have grown better than that. And all India, again, average expectation on the basis of whatever we have seen in the marketplace, industry should show a growth of close to 9% or 11%. Maybe double the growth, yes.

Okay. Just one housekeeping question on... On this slide, contact is signed with sale. Any maybe pricing indication? Is it much below spot pricing? What kind of pricing arrangement have you had for this slide contact?

Yeah, why do you want to know so many details? You look at the EBITDA performance next quarter. All right. Thank you, sir. Thank you.

Thank you. The next question is from the line of Ritesh Shah from Investec. Please go ahead.

Yeah, hi, sir. Thanks for the opportunity. I'll just pick up from Sathya's question. Sir, what is the sort of cost inflation that we are looking for both flash as well as slag? And do we have any long-term contracts on a percentage basis which are indexed to WPI, something of that sort, which can ease up on flash and slag for us? So I'll take the second question first. The contracts are normally not more than a year. Nobody does longer period contracts. And they are not linked to WPI. These are, again, negotiated contracts. If I were to deep dive, again, it's a demand and supply phenomenon depending upon, you know, the appetite in the market and availability, how the prices perform. Generally, the price discovery is used through the tender process or e-bidding kind of thing. So, that's the way generally it happens. Right. But, sir, has the slag inflation been quite steep in recent times? Basically, what we pick up is it's more expensive than clinker costing. The reason we called out slag and fly ash because these are the two biggest raw material cost items. Okay. That's fine. So secondly, so then you indicated we have around 60 days of inventory. Is it possible for you to qualify how much is the average cost over there? Cost of holding? Yes, sir. Inventory cost? It's around $162,000. That's the average cost of inventory. This is on a blended basis. $162. Hello? Yeah. Yes, sir. That was for the quarter. I'm saying quarter end basis. It's almost the same. Okay, okay, okay. That gives a fair indication. This is useful. So thirdly, how are you looking at other group assets? I'm asking question more from an inorganic case standpoint. There has been a lot of news flow around a lot of assets. How does a group approach it? What's the thought process over here, sir? There are companies which have some problems on the balance sheet side as well. So is the company open to say something like a preferential or the idea is to go for entire asset or we won't be even open to it? How should one understand this? Ritesh, I am so drowned in Ultratech, so much things to do that I don't get time to see what is happening in other group companies. I really don't know, I don't have any answer for your question. Let me put it the other way around, sir. If there are any assets available, is there any particular region which will be of more interest, something in Central India, Southern India, will you look at it or it's a possibility? Yeah, so one thing very clear is that almost entire geography of the country from regulatory perspective I think we can still acquire capacities that should not be a constraint barring perhaps east because the size of assets themselves are significantly large so then the next point is we keep on evaluating assets and it has to give us a profitable growth opportunity, then only it would make sense for us. Sure. And sir, last question. If you could provide some color on the white cement and putty markets, that would be great. And there is something called Birla Pivot. I'm not very sure whether it falls under our umbrella or any of the other Birla group entities. Last two questions. Birla Pivot is Gratson. They are doing something over there. So you'll have to ask them. White cement and putti market prices were subdued. We've seen volume growth happening. We have been getting volumes from Rack White also. It has been rebranded as Brilla White and consolidated. We are seeing volume improvement. Sure. This is helpful, sir. Thank you so much. Thanks, Ritesh.

Thank you. The next question is from the line of Rajesh Ravi from HDFC Securities. Please go ahead.

Yeah, hi there. Good afternoon. My question pertains to first on the regional demand and utilization in Q2. So could you throw some color? You mentioned the east growth could be to the tune of 4% to 5% on a pan-India basis, 9% to 11%. So which market do you, you know, more than 10%, 11% and also regional utilization? Very difficult to quantify individual regions. If we are growing 15% this quarter, AlterTech has grown 15% this quarter with 75% capacity utilization on 132 million tons, that gives you a fair perspective that it's fairly balanced. There would be sparks of high growth somewhere or mediocre growth elsewhere. And this demand, any flavor of which market, regional basis, which market view at what rate? I just said I think 15% is what we have grown. Practically all markets are doing well. Okay. And, sir, on the fuel cost, on a per-kilocal, the fuel costing was how much in Q2? Is it this? 2184. 2184, okay. Okay, 2184. Sir, you mentioned this deep water leaking. You did 1.2 million tons at Magdala? Yes, please. Okay, so from 0.7 odd, it is now close to 2 million tons. And which are the other places where this deep water leaking would happen? There are a few opportunities which we are tracking. We will come back once everything is done. Okay. Okay. Dinesh, that's all from my end. Thank you. Thanks, Dinesh.

Thank you. The next question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead.

Hi. Thank you for taking my question. Very good numbers, Mr. Daga. There have been a lot of questions around fuel costs, but I don't want to bore you. I just want to understand one thing. The company has seen around 20% deflation on fuel costs over the last three quarters, right? I mean, from $200 to $162. If I do just back up the math, is it fair to say that we would see another 7% to 8% decline, and that would be the end of it, given where current prices are. I know you can't comment on how prices move on a daily basis, but given the inventory levels.

So even if I took $10 or $11 reduction, it seems to be possible, but very difficult to forecast. As we saw, $100 remained for a very brief period, shot up to $140, $135. But yeah, if everything remains steady, no more global upsets, then yes, you could see a reduction of $10.

Perfect. Thank you so much. That's it from me.

Thank you. The next question is from the line of Tati Krati from Macquarie. Please go ahead.

Take the next person.

Sure, we'll move to the next question. The next question is from Raghav Maheshwari from Asian Market Securities. Please go ahead.

Congratulations on a good set of volume growth, firstly. Sir, my question is for the petcoke and the fuel side. You mentioned in your presentation your blended consumption is $162.00. where you have mentioned that Petco is particularly $138. Is it the right? Yes, sir. Sir, and the users of the Petco is the 39% of the total mixed fuel mix. This 39% is only for the kiln or at the TPP level also? I thought about kiln only and Petco goes only in kiln. No, just 39% is only for the kiln, right? Yes, please. Sir, now petcoks are not allowed to be used in thermal plants legally. Yes, yes. Sir, my question is from that, why is it the restriction for we are just using 39% because it's the availability side issue or it's the tillness specifications issue? No, it's more about availability. Okay, sir. And sir, what is the status for the petcock? It's particularly available at a domestic sale or it's mostly the imported only? Imported, mostly imported. Okay. Got it, sir. Thank you.

Thank you. The next question is from the line of Sumangal Nivedia from Kotak Securities. Please go ahead.

Yeah, good afternoon, sir. Just two quick clarifications. One is this 160 to 200 million tons of aspiration which we have. Over what period are we looking at? What would be the end year if you could just clarify that? I'm sorry, I missed your question. Can you repeat, please? Sir, this capacity expansion in the next phase, phase three, which we're talking about, which we're evaluating from 160 to 200, what is the end year for that? Over which period are we kind of working on? 2028, the next phase of growth will not take us to 200. Again, so we will do in blocks of 20 plus minus 20 million tons. So that from, so like, Mid-25, mid-calendar 25, we will reach 160. I'm just using a rounded number. Then again at 20 million ton, which will get completed by 27, calendar 27. So that will take us to 180. And then again, before we complete, I'm sure we will be ready for the next phase of growth. Every year, we will keep on looking at balancing our capacity book in line with the growing markets. Understood. And versus two years back, given the growth and the market share gain which we are seeing, I mean, some front-loading of expansion plan is expected, right? Can we assume that? Absolutely. Okay.

Got it.

And just one last clarification, the employee cost and other expense, are there any one-off or just purely seasonal? In fact, I mentioned about it close to 70 crores. Would be one of?

Yeah, 40 plus some other bonus.

Yeah, so 70 crore would be one of the retention and this and that. Close to 70 crore is a one-off cost. Is it non-cash or it's cash but not like this? Okay, okay. Okay, got it.

All right, thank you. Thank you so much, sir, and all the best.

Thank you. The next question is from the line of Jashandeep Singh from Nomura. Please go ahead. Hello.

Hi, sir. Thank you for the opportunity. Just wanted to understand from you how you are seeing the rural demand. And also, if I'm not wrong, last quarter we mentioned some market share, marginal market share lost in South. So have we been able to recoup that? My first question. The rural market for us... Rural market for us has been growing. Yes, the rural market is still robust. Actually, there is, we have not seen the kind of probably FMCG companies are probably having the problem. But, my knowledge, it is still robust because in rural also there is a lot of infrastructure and local body work, etc.

So, Still, I would say rural market is not impacted.

Marginally, here and there, there would be some pockets maybe. To add further to what Mr. Jamal said, if you look at slide 7, I have called it out. Rural sales were at 63% of trade, grew 15% for the quarter. That's how rural markets are performing and Again, you know, a bigger picture, the definition of rural markets is continuously evolving. Rural is no longer the old rural which you actually pure agree. As you were mentioning, there's a lot of infrastructure growth happening in the so-called rural markets as well. Right, sir. And on the South India market share that we mentioned last quarter, that margin loss was there. This quarter, have we been able to regain that? Yes. In the last quarter, we mentioned we lost marginal market share in the South India. So, were we able to regain that? No, I don't think so. I think we don't recollect having said anything like that. Okay, no issues. And so, on the linkage goal, what will be the percentage of domestic goal? If you can share that. Domestic goal is about 6%. 6%, okay. And so, it's... In-kill, I'm talking about in-kill. In-kill, right sir. Right. And so if I can squeeze one more, since we are now moving towards 200 million tons by FY2830, just wanted to understand, there is also enough cash balance and the company has become one of the biggest, it is one of the biggest human manufacturers. So is there any related sector also that the company is evaluating? like he has some exposure to the building chemicals. So I just wanted to understand whether the management is thinking on that line as well. You know, if you look at cement as a sector in India, what is the size of cement? 385 million tons? In billion dollars, it's 30 billion dollars? So looking at the size... Looking at the size of cement business in the country, there is no other adjacency which looks meaningful. And we will not do any diversification.

Unrelated.

Unrelated activities. So cement is, I would think, 30 is actually $35 billion worth of market. There's no other... adjacent business. Now whether it is tiles, whether it is whatever else you will have in mind, paver blocks, tiles or sanitary ware, etc. Nothing is so big. We are already present in white cement, RMC, we are doing pretty well, growing very rapidly. Gray cement remains our forte.

And this is it. Thank you.

Thank you. The next question is from the line of Raj Kiran Gandhi from SBI Mutual Fund.

Hi, thanks for the opportunity. So just here, you know, if I were to go by saying that, you know, you will reach 200 million 10 by 2030, as you mentioned, you know, it will translate to a CAGRF by 23 to then of about, you know, slightly over 7%. which seems to be a bit lower versus what your peers have guided in their strategy. So just any comments on that and also in light of the bunched up capacities that we are seeing in terms of watering and all. So how do you see the pricing from a medium term basis?

So what is your question? Whether our growth plans are inaccurate or not enough or I didn't get your... In terms of

in terms of your peer growth path, which they've guided being significantly higher versus the capacity growth guided by you. So in that sense, you know, how do you read that? So that was one.

No. So to answer that, you will ask to ask them on what their plans are. I really am not in a position to comment on their plans. Uh, when we give out our plans, it will be with nuts, screws and bolts, everything stitched together, uh, you will know where our capacity is coming, how much capacity is coming, unlike some pigment of imagination. So when we are announcing our expansion plans, they are very rock solid. With an underlying economic hypothesis basis, we understand the Indian market very well. We know how the Indian market will grow, where it will grow. Accordingly, we will add capacity. And also it's a revolving one. Sure.

Okay.

Okay.

Thank you. Sure. The next question is from Shravan Shah from Dollar Capital. Please go ahead.

Yeah. Thank you, sir. Just to clarify, 70 crore extra one-off, you said this is only for the staff cost. Staff cost and others. Yeah, we have one-off. For staff costs, how much one can think of from next quarter, how much one can think of to lower? 40 to 50 crores will be out of it. Okay, and raise 20, 30 crores would be the maintenance cost extra. Extra maintenance cost, yeah. okay okay got it uh second on the pricing so you mentioned that uh five percent uh uh current prices are higher versus the uh 2q average uh in terms of the non-trade also the similar trend one can uh look at yes please okay uh that's a great uh second in terms of the Fuel mix, you said 6% is a domestic coal, so broadly 39% was petcoke, so how much was entire coal, imported, domestic, everything, coal, there was how much? 51% imported coal, petcoke 39%, alternate fuel 4%. Okay. And sir, on the green share particularly, both WHRS and solar, so last time we have talked about to reach a 1250 megawatt by March 25 or maybe 1Q when we will complete this 22.6. So not 22, but 24.4 will complete. So broadly how one look at from current by March 24, by March 25, how much one can look at in terms of the increase in the both capacity and the green cells. So currently 22%. So how one can look at. So ultimately what I am trying to understand is for 26, my broad calculation says we should see at least incrementally 60-70 rupees per ton kind of savings only from the incremental green capacity that we are adding. I don't want to quantify that saving because the rates also not for renewable energy but for other activities rates could change. But yeah, in terms of percentages, we have reached 22%. we should be reaching more than 50% or actually 60% by 2025-2026. Okay. So currently, broadly, is it fair that the grid cost would be a 6.5 or 7 rupees and the solar cost for us would be a 2.5? Yeah, the grid rate is varying from 6 to 8 rupees actually. And renewable energy is not 2 rupees, it's 4. Yeah, differentially it's not more than 2 rupees actually because there are a lot of government levies, willing charges and some close subsidy incentives. See the generation cost, you are right, but that is at the... generation point. From there, for transmission, reading charges, etc., loaded, it comes to close to 4 rupees. Okay. And then... It goes down to 7 bucks. And then in terms of the lead distance, it's great that it is slowly reducing, so 406 now. So by when we complete this 24.4, how much one can think of 30-40 kilometer further reduction is possible structurally, I'm saying? It won't be so much, but yes, it should be downward only. okay okay okay and then broadly in terms of the this out of this uh the next phase uh by one edge of fy25 uh is it fair uh seven to nine million ton can cannot be can come up by next september and race maybe by march or june yeah possible okay and in terms of the clinker also roughly 15 million ton would be the clinker to support this uh expansion yes okay Okay, okay, okay. Great, and thank you on all of this.

Thank you. Thank you. The next question is from the line of Patanjali Srinivasan from Sundaram Mutual Fund. Please go ahead.

Hi, sir. Am I on? Yes, yes. Yeah, so my first question is on what is our margin being like for the RMC and rights business because it looks like we've done much better there. compared to the previous orders.

Correct me if I'm wrong. So margins for RMC are, you know, RMC is an incremental margin business. 3% to 4% is the margin that we can 5% to 6%. 4% margin is what we have now, incremental margin. So we do a transfer pricing from cement to RMC.

Okay, sir. And one more thing, realization-wise, have we taken any price hikes towards the end of the quarter? And what has been the decision from our end for this? Because a lot of news about companies taking price hikes came in.

I think you were not there in the beginning of the call. We have taken price, I think September, mid-September onwards, we have seen price hikes happening across the country, yes.

So if you could just tell me what is the closing price at the end of the month? What price do you close at?

Closing price, but each market and I don't know if you are in Mumbai, the price in Andheri will be different and price in Thane will be different. So difficult to say a closing price, but if you want to look at increase in prices, 5% to 7% increase has already happened since June.

Okay, okay, sir. Sure. Can I take it as a summer realization from the previous quarter? It should be like 5-6% above, right?

In this quarter? Yeah. Yeah, in this quarter, obviously, if the prices hold... then you could see an improvement, a proportionate improvement.

Okay, I'm just trying to get that number quantified from you.

And I'm not wanting to quantify it.

Yeah, yeah, okay. Thank you.

Thank you.

Thank you. The next question is from the line of Naveen Sahadev from ICICI Securities. Please go ahead.

Yeah, so thank you for the follow-up. Sir, you mentioned that phase three is about to be announced by end of this calendar year, but you said that it will largely get completed in 2027. So I'm just trying to understand because typically any CAPEX takes about two years or two and a half years. So by that logic, calendar year 24, 25, so maybe around 26, shouldn't that be a reasonable expectation or do you think there could be some greenfield sites which could take much longer a period. Yeah, it's a mix. It will always be a greenfield, brownfield mix. And in two, two and a half years, we have done a record of shooting greenfield project in 15 months also. So, again, it depends on the site. There were advantages that we had on that site. There was You deferred from the team, no doubt about that. So you cannot straitjacket us in any shape and form.

Fair point. And just one thing to confirm.

In the previous call, Q1 results, you talked about the bottom making of a total of 4 million tons that was to come in FY2024. Yeah, so is that so when you give these numbers at the end capacity, I don't think you are including that in the numbers. Now I'm including that when I said 159.65 million tons to end by at the end of this phase, we have included that 4 million tons as also another 1.8 million tons of slag capacity that we I just mentioned in this call, we are going ahead.

understand. That's really important. Thank you so much.

Thank you. The next question is from the line of Prateek Kumar from Jefferies.

Please go ahead.

My first question is on pricing.

We have taken a pricing action. Has there been any impact on demand? We understand in September the demand was very soft, but Has the increased pricing had the same impact on demand during Q3 as well? Too early to say anything at this point in time. We're just 19 days. The biggest thing is prices are holding. There might be some market somewhere, some slowdown, some resistance, but I think that will pass over. Okay, and in relation to, like, several states have announced election dates, so in relation to state elections or coming up with national elections, is there any moderation in working capital release from the state government or from any government? According to me, the governments want to maximize execution of projects, so they should not This is just a logical analysis that they should not hold back payments for all the contractors, otherwise it will impact progress of work. Hence, the working capital of all the infrastructure companies should remain strong as far as their receivables are concerned on government projects.

Right, and the last question, on your other operating income, that on a quarter-on-quarter basis seems to be slightly higher from around 220,000 to 250,000 this quarter.

Again, specific components is one of them. Intended. Intended. Yeah. Then, what was the extra? No, just how much is other operating income is? 281 crores versus 271 crores. Is that a significant difference? No, so we were looking at 277 crores versus 18 for Q1. So consolidated 277 crores last year was 297 crores. It has fallen. Okay, so I was just seeing quarter on quarter, so okay, maybe we should see it here on here. So quarter on quarter, yeah, one or two incentives would have kicked in. Quarter on quarter. Quarter on quarter, yes. Quarter on quarter, yes, but some additional incentives kicked in. Hello, Prateek? Sure, sir, these are my questions, okay, thank you. All right.

Thank you. The next question is from the line of Weber from Philip Capital. Please go ahead.

Yeah, thank you. Good evening, sir. Sir, I have only one question. You mentioned earlier enough that pricing can be very different in different parts of the country. So like Altatype was earlier contemplating and what we gather is that you are talking of one India pricing or one district pricing or one region pricing. Can this be a reality for the industry in the long term that we have one city or one district or one industry? We never said that. I think to the best of our knowledge, we have never said that one country, one price because it's not possible because you know the logistic issues, cost structure is different in different parts of the country. So To me, it looks difficult, some... wrong that somebody must have... No, no, no. But actually, they're confirming that they never talked about it. It cannot be. It's not logical. Yes, sir. No, I know that, sir. I understand. I understand, sir. I was just asking you from a perspective. Can we have one district or one city or one state, something like that, more uniformity in pricing rather than what is currently what I was asking. That was my question. I will explain to you that this is a very small experiment, not all India pricing. This is one small geography.

Okay. Okay, sir. Understood, sir.

All right. Thank you, sir.

Thank you very much. We'll have to take that as the last question. On behalf of Ultra Tech Cement Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You can now disconnect your lines.

Thank you so much. Thank you. Thank you.