Ultratech Cement S/Gdr

Ladies and gentlemen, good day and welcome to the Ultratech Cement Limited Q3 FY24 earnings conference call. We must remind you that the discussion on today's call may include certain forward-looking statements and must therefore be 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. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star and then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Atul Dada, Executive Director and CFO of the company. Thank you, and over to you, sir. Thank you so much. Good evening, everybody, and welcome to the earnings call for Quarter 3, SI24 for Altratex Cement Limited. I will try and keep myself brief today and giving more opportunity for questions. One of the most critical points which has been doing the rounds is about demand, whether there's a slowdown, et cetera. We believe that this quarter, the industry should grow somewhere around 3% to 4%, not more than that. And there are several reasons around it. And I should clarify it up front before too many charities start doing the rounds. Q3 is a fiscal season which is generally subdued due to absenteeism of workers from project sites. And this has been a routine phenomenon year after year. Besides, a large country like ours will have something or the other going on. Such issues do hamper the movement of goods. Specifically in this quarter, we had election in four major states, Chhattisgarh, Madhya Pradesh, Telangana, Rajasthan. Fiscal challenges in the states of Bihar, Jharkhand, West Bengal. There were floods in Tamil Nadu, cyclone in Andhra, sand and aggregate shortages in some parts of the country, NGP-related construction ban in NCR since last quarter, which still continues, and severe weather as we speak. We also had rains in Himachal which impacted the movement of goods. You must already be aware that the first two days of January were also impacted by the trucker strike, which would impact not just us, but the entire economy, let's say. So one should not panic because of such situations. There have been news items like government orders have slowed down. I believe if so, it is only temporary. India is fundamentally poised for a huge infrastructure growth, which will benefit all the cement players alike. The bigger point is that any project that has been initiated will go on, and we are seeing substantial construction activities across the country. So, long story short, fundamentals around growth for cement in the country continue to be the same. We have already started seeing improvement in demand since the middle of December. Slower demand leads to correction in prices, and most of the gains achieved initially have been surrendered. While QOQ and YOY, there has been an improvement in prices for the quarter, but towards the end of December exit, prices had corrected largely. You are all monitoring daily prices, but I wish to reiterate that prices are always guided by demand. As and when demand improves, prices are bound to improve. It's a pure economic phenomenon. Jumping on to our expansion plans, I think we are happy to tell you that all our expansion plans are on schedule, and in fact, some of them are ahead of schedule. Given the way we are seeing things going up in the country, we are quite satisfied with the way our expansion plans are panning out. On the last announcement made for 21.9 million tons of capacity, which we call internally phase three, orders have already been placed for critical technology items. Civil work has commenced on a few sites. We are confident that the plans will be commissioned as per schedule. This year our CapEx cash flow will exceed our initial plans, which we have outlined. and we will spend around 9,000 crores. Next year also, we could see our cash flows on CapEx being around 9,000 crores. Working capital has taken up some opportunistic bets on purchase of coal and petco, because of which our working capital is slightly extended. Both of these elements added to a marginal increase in our debt position at the end of December 23. And given our belief that Q4 will be a high throughput quarter, we should be seeing a further improvement in our cash flows and shrinking net debt. Everything else remaining the same, we are working towards reaching a zero net debt position by the end of March 25. Going forward, we keep seeing an improvement in costs. As per current data, imported coal and pet coal do not seem to be spiking up, albeit the ocean freight flare-up due to the war issues. We achieved a fuel cost of 2.048 per kcal this quarter against 2.184 per kcal last quarter. Blended cost of fuel consumed net of moisture in dollar terms was $1.50. We use very limited domestic fuel, which is around 6% of our total fuel consumption, and maximum energy is from imported coal and pet coal. We expect to see a further reduction in our fuel costs in the foreseeable future. With 455 megawatt of renewable energy and 264 megawatts of WHRS, we are now at about 24% of non-fossil fuel-based power. and work is in progress to nearly double this percentage by the end of FI25. To give you some more numbers, we today in all have 44 kills in operation out of which 29 kills have already been covered by WHRS. Work is further in progress on five more kills. The ongoing expansions by the, which is at the end of completion of phase three by fiscal 27, we will have in all 48 kilns and 41 kilns will be covered with WHRS. All future expansions, current and further, will always be with WHRS and zero thermal power. That is our commitment to sustainability. I have covered briefly upon costs, demand, and our expansion plans. Last but not the least, I must communicate about the recent acquisition that we have announced of cement assets of Kesaram Industries. We have already filed a team of stock exchanges. CCI applications should be filed shortly, perhaps by the end of this month. And after that, there will be an NCLT process. Two NCLTs will be involved, which is namely Mumbai for us and Kolkata for Kesaram. The effective date of merger has been kept as 1st April 24. Hence, as and when the merger gets completed, the numbers will be consolidated with retrospective effect once all regulatory approvals are in place. That's all I had to share with you today from my side and look forward to questions from you and any more inputs that you may have. Thank you and over to you. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Murarka from Axis Capital. Please go ahead.

Yeah, hi. Thanks for the opportunity. The first question is on other expenses. Q2 has higher other expenses, which we saw, and Q3 simply witnesses a drop, but this time that drop is not visible. The first thing I wanted to highlight was, I wanted to check was, was there any one-off in other expenses?

It's not a one-off, but when we saw the slowdown or lukewarm response in the markets during October-November, we did some preemptive or early pre-ponement of some maintenance costs, which would have become part of the overall costs during this quarter.

Okay. So recently this campaign has also been launched with Shah Rukh Khan. Of course, congratulations on that. But that is already in the P&L or will that come? Who is Shah Rukh Khan?

Yeah, it is. Obviously, we will book the expenses. We don't keep anything for a later date.

Okay. Lastly, I see the slide on the capacity commissioning schedule. What will be the clinker capacity addition in Phase 3 and where will you go on total clinker capacity at the end of Phase 3?

I think I had already mentioned last time 10 to 12 million tons. I'm not getting into details on clinker capacity, but 10 to 12 million tons. So we will always be clinker, but that is the most important aspect. Just one second. See, the first of all, Jatul has already just said that all capacities are always clinker-based. We never put the surplus grinding facility and not having the clinker on the back side.

Okay, okay. Sure, I'll come back and make it. Thank you.

Thank you. The next question is from the line of Navin Shahdev from ICICI Securities. Please go ahead. Yeah, good evening, sir, and congrats on good rate of numbers.

Just two questions. First, I'll take on prices. So you said by the end of December, prices will... had turned fairly weak. So the exit for the current peak, I won't say weak, but the gains which were there in the quarter were largely surrendered. Fair. So can we say that the spot price in January is at least, let's say, 2% or some number to it lower than Q3? Lower than Q3, yeah. So I think it would be currently lower than Q3, marginally. Yeah. Okay, marginally. Fair, fair. And sir, my second question was on your recently incorporated company in Northeast and a very peculiar name to it, you know. So just trying to understand, it seems like something is already formed up and, you know, very soon we could see either a greenfield expansion or some venture in that state. If you can throw some light on this. So I will throw some light when I have the torch with me. So, sorry, I don't know why I started joking on the call, but we will come back, Naveen. Yeah, we are making progress on our expansion in the Northeast. It has been long, long overdue as per the legal requirements. We need a separate entity with local partnerships, local directors, et cetera. So that has been structured. We will come back with details as and when we are ready. Fair. I mean, my only question was, given the peculiarity of the name, I could sense that it could be a greenfield venture because there you don't have to really go into an auction of a mine as such. If you have land already in place, you can start. Yes, absolutely. Absolutely. Great, great. Thank you so much. Thank you.

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

Yes, sir, a couple of questions. First, sir, you used the word we have taken opportunistic bets on fuel. Sir, can you please provide some more color over here? You did indicate on the piece per KKL basis for the quarter. If you have taken some nice bets, does it mean it is lower than the prevailing spot prices? How should we look at it? So let's keep it for the next quarter. Why should I spill the beans right now? I also mentioned that you will keep seeing our cost curve sliding down continuously. We will reveal the numbers as and when at the end of the next quarter. Okay, so if I put the question the other way around, would we have taken... Okay, okay. Right, so I'll try to move to the next question then. Sir, you did indicate that incremental clinical capacity you had earlier indicated at 10 to 12 million times. This corresponds to phase 2 and phase 3 together? This was about phase 3. This was phase 3 and specific corresponding to phase 2? 14 million tons. Okay. And the incremental announcements which we have detailed, are we incentive-backed on most of the states? Because I see a few states... I'll tell you which places have incentives. So we have Rajasthan. Rajasthan has incentives. Andhra doesn't have. Bihar has. Yeah. UP. UP. UP. UP. UP also will have it. UP has. Tamil Nadu doesn't have. Punjab also. Punjab first. Punjab first. Punjab is in phase 2. So Punjab also. In phase 3, you will have Rajasthan, UP, Bihar. Yeah. These states will have incentives. Okay, so AP doesn't have, I presume Tamil Nadu also would not have, right? Yeah, Tamil Nadu is very small. Okay, and sir, when we give IRR number of 15%, what is that? We don't take incentives into account. We don't take incentives into account. Okay, that's useful. Okay. And so lastly, if you want to just touch upon probably the rationale behind KSORAM and given we have already announced phase two and three, would there be a motivation to look at further inorganic assets given we have a very strong pipeline already in place? So, Ritesh, inorganic is always opportunistic and each transaction has to be examined on its fitment with Ultratech given the fact that we are pretty densely present in the country. So each transaction has to be examined on its own merits. Both, so fundamentally I have maintained that we are looking for profitable growth opportunity. So it has to give us growth as well as has to be remunerated. So at the end of the day, it has to the value accretive actually, otherwise there may be number of opportunities. If it doesn't add value, I don't think it makes sense just to add capacity. question was will there be anything specific that will make us move or motivate us to look at it something in southern India which is rich in limestone would it be of southern India let me comment about the entire country so if it's a profitable growth opportunity that point since you touched upon limestone obviously it has to be limestone back okay Sure. And sir, Kesaram, basically the motivation to go for Kesaram? Oh, it has good limestone. We can certainly add value to ourselves, to our customers. We can service our customers in a much better way. Markets are very attractive. And also the good brand, the markets where they are present. Sure, sir. Thank you so much. I'll join back with you. Thank you again. Thanks. Next. Hello? Yes, sir. I'm good. Thank you. All right. Thank you. Next question, please. Thank you. The next question is from the line of Rashi Chopra from Citi Group. Please go ahead.

Actually, just on utilization, your utilization is about 77% in this quarter. So what are you expecting in the fourth quarter?

Fourth quarter, you know, historically, if you see, I would expect this quarter also to repeat. However, election date depends on election date, as in when the election dates are announced and the code of conduct set in. It's very, very... confusing to put a number, to put a finger to a number. As I already mentioned, mid-December onwards, we started seeing demand pick up and the signs are very good. Still, if I have to put a number, we will definitely cross 80-85% for sure.

Okay. And in your opinion, like for the full year, what should the industry demand growth be?

Oh, We were looking at close to double digits. So 8%, 9% is a possibility. Yeah. Anything between 8% to 9%.

Just some bookkeeping on your trade volumes and blended payments for the corporate.

Trade was 64%. Yeah. Blended around 58%.

And while you're doing the blended coal price, what was the petcoke price? So like last quarter you mentioned the petcoke was $138. This quarter?

$126.

So this should continue to go down?

Yes, that's what the trend looks like.

Sorry, $126 you said, right?

$126.

Okay. And lastly, on the waste heat recovery, your capacity is 256 megawatts right now.

Yes.

Anything more getting added this year?

Yeah, about 26 megawatts. In the last week, maybe 16. Some more will come in. One or two more lines will come in.

So what is the total megawatt capacity expected by FY2025 on waste heat recovery?

About 16 to 20 megawatts additional will get commissioned by the end of March 24.

And then beyond that in FY26?

25 also we'll have. So we have five existing lines under implementation out of which you will see 16 to 20 megawatts getting commissioned by March. So three lines would have commissioning in the next fiscal year also.

Okay. Just one last thing. I don't really want to discuss EBITDA for the next quarter, but generally speaking, directionally, prices have basically corrected. I know costs have come down or will come down as well, but I mean, this probably remains like a steady state number?

I assume so. I think I'm confident that it's a steady state number.

Okay, thank you.

Thank you. Next question, please. Yes, the next question is from the line of Indrajit, an individual investor. Please go ahead.

Hi, sorry, Indrajit Agarwal from CLSA. Indrajit, after the CAPEX of 18,000 crore in the two years, how much will be remaining for Phase 3, till Phase 3?

we had total cost of 13,000, 12,000, right? 25,000. 25,000, yeah. Out of which 18 is getting completed, so balance is there, 67,000 cost.

And given that not all the capacity, about 2 million tons of capacity at KSORAM is not clinker-backed, so could we look to realign some of our organic expansion projects to support that or how do we?

Yes, we are looking at it. I think in the next, we have plenty of time. So once we get TCI approval, we'll work more closely with them to understand their plans and how we can realign our capacities.

Sure. And, sir, last question. On this post-KESO round, we will be at around 190 odd million ton capacity, right?

Very close to that number, yes. Very close to that number.

Yeah, and our target is 200 by 28. Yes, in India. And our target is 200 by 28. So do we have enough organic opportunities for getting to that additional 10 million?

Organic, most certainly.

Okay. All right. And all those organic, we are still confident it is truly lower than, like, say, $90 to $100 per ton, right?

Absolutely. No doubts about that. Okay. Thank you. That's all from my side. Thank you. Thank you. Next question, please. Yeah. The next question is from the line of Ashish Jain from Macquarie. Please go ahead. Hi, Ashish. Yeah. Ashish, your line has been unmuted. You may proceed with your question. I think the next person here has dropped off, I think. Yeah. Hello. Am I audible now? Yeah. Yeah, you're audible. Sir, you know, you gave some numbers on, you know, films with WHRS. And while that, you said that currently we have 44 films. And by 27, we will have 48 films. So are we adding this 25 million turn between Phase 1 and Phase 2 just across four new lines? I will not hear about that. Yeah, there are four lines, four greenfield lines getting added. For 24 million turns of film films. Okay. Okay. Thank you. The next question is from the line of Pratik from Jefferies. Please go ahead.

Hello. Yeah. Hi. Good evening, sir. My first question is on last quarter's demand growth. You said it's around three, 4%. Would you have like region wise distribution of how this growth was?

Very difficult at the moment. We will wait to see, uh, numbers from regional players, then it would be better to comment on that.

And your utilization of 77%, how would that be region-wise?

More or less evenly spread, you know, the highest being 80-85% and the lowest being 74-73%.

Okay, so south utilizations have like, I believe the south number would be lower number of the range. So south utilization for yourself and for the industry has like sustainably moved up or is like we are operating at significantly high?

So we are, so when we are growing at a pace higher than the industry, our capacity utilization will also be higher than the industry. That is one. South market has been consolidating and improving continuously. Gone are the days when southern markets used to operate sub 50%. So you are seeing south markets also going up above 70% for sure.

Okay. And over next six months as you conquer, like volume growth may sort of get impacted. How do you see the pricing during this period?

The pricing is pretty determined by demand, good demand across the country. And I have seen first you know, in the past also, when all India capacity utilization crosses 85%, prices become very strong. So it's a play of demand. If there's good demand, prices tend to improve.

Right. But like versus last quarter when we like sort of seen like start of the quarter, we had like 5% higher prices, like all of that rolled back. We are like sort of having a similar view on pricing like we had that time?

My sense is if capacity utilizations in January, March, which has been, which has precedence, you know, if you go last two, three years, capacity utilizations have been strong, the prices could improve. We are heading into election period, so there might be, you know, how demand pans out, it remains to be seen.

Sure. And lastly, this 25,000 crores of capex, you said nine, nine and maybe seven for three years. Is this maintenance capex also included in this?

All in, all in, all in.

Okay, so maintenance includes, we have 25,000 crores to spend.

One second, sorry, sorry, sorry. So it's going to be phase two, phase three, yeah, yeah. So maybe 1,000 or 2,000 crores on maintenance capex, give or take. There will be WHRS also, which is under implementation. But all put together, capex, which I am seeing this year, we have already crossed about 6,500 crores. Okay. for the nine months. So we will very easily touch 9,000 crores on that which includes both which includes both our growth capex as well as routine capex or maintenance capex. This is a trend which we see at least next year for sure.

Sure. So 9,900 and next FI26 will have like 6,700 plus?

It will be higher only. It will be not 7,000 because there will be maintenance capex also.

And in between, there will be like acquisition EV of around 7,500 crores.

Yes, that is coming in. So in my commentary, when I mentioned FI25 net cash on the balance sheet, I am not taking into account this acquisition, which will bring in a debt of 2,000 crores.

Right. Okay. That's it for my side. Thank you, sir. Thanks, Prateek.

Thank you. The next question is from the line of Devesh Agarwal from IIFL Securities. Please go ahead. Thank you for the opportunity, sir. So, firstly, in terms of cost, you did mention that the cost will continue to slide. But based on our inventors, can you give some sense what could be the decline we can expect in POPI? We're at 150, no? This quarter? Yes. So we are at $150 of consumption this quarter. I would expect 7, 5%, 7, 8% reduction over the next six months for sure. It could be higher also. Okay. And secondly, based on our acquisition, you do have some capacity addition plans in phase three in the southern India. Can there be any rethink or those remain intact? So I think somebody had asked about this. In the next six months, we will come back in case there is any change in our existing expansion plans. Okay. And in R&C business, what could be the margin for the company? In what? R&C business? Yes, sir. R&C business generally delivers 3% higher? 4%. Sorry, 4% margin. Okay. Thank you.

Thank you.

The next question is from the line of Satyadeep Jain from Ambit Capital. Please go ahead.

Hi, thank you. Just a couple of questions. One follow-up to Naveen's question. On the foray in North East, just want a clarification. You already have some limestone assets there in North East?

Identified, yes.

Oh, but not existing assets. Secondly, on Naval Guard, in the phase three, we don't see Naval Guard yet. Is there land acquisition?

No, no, no. That will come in phase four.

Yeah.

Land acquisition is happening. Because right now, we are doing expansion in Rajasthan, which is part of our phase two. Phase two. which will get commissioned, and then we will take up further expansion in Rajasthan in Phase 4, if I can call it that way. Sorry?

Just land acquisition is still going on there.

Sorry, and Nardwara expansion, my colleague corrected me, Nardwara expansion is also happening right now. Okay.

All right. Thank you so much.

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

Hi sir, good evening. Am I audible? Yes, please. So, could you share the breakup of the pending 2.6 million ton beer bottle making which was due in second half and also the three slag grinding units which are expected next year? So, slag grinding units, one is in south, one in Bengal and two in Bengal and one in south. And as far as de-bottlenecking, I think I've corrected the numbers in this presentation as compared to earlier. So once we are through, we will come back with the details on de-bottlenecking. Okay, okay. The de-bottlenecking, there are changes. And this Burnpur is already amalgamated, end of QC? Yes, Burnpur, we had acquired the assets and not the company. Ah, so this is already done, okay. Already in our balance sheet. And also, can you share the phase 3, you mentioned some 10-10 million ton of kilter additions? Yeah. Across which, what would be the reason why kilter additions for kilts? That's happening in east, east, north, And south, south, south. I'm working with the breaker because south we see that we are adding one last green thing, 6 million ton in Andhra and one brown thing, 2.7 million ton, which is in, again, EPCW. So almost 9 million ton addition. Rajesh, let's focus on cement capacity instead of getting into flinker details. Okay. And total you said is how much, sir? Total of what? So, then, change across these three regions would be how much? Give or take 12 million times. Okay. And, sir, lastly, Q3 volume numbers for various regions have been impacted. But in Q4, would you expect, is it feasible to see a 10% plus growth? You have the capacity in place. Is that a reasonable number you are looking at, 10% plus growth in Q4? Yes. You know, right now, given the weather conditions in North to North is still not doing full steam. Otherwise, all the other regions are performing well. We should see a good improvement in our Q4 numbers. I don't want to comment on a number which is unnecessarily giving directional performance for Q4. Okay. Just as if you work out the way that sequentially you're able to deliver 25% volume growth, year-on-year it would still look at some 78% growth. So is it that this effect will also come in play is what I was looking at. As I mentioned, Rajesh, I don't want to preclude or reach a conclusion on Q4 in this call. We are focusing on Q3 performance. Yes. Thank you. Thank you. The next question is from the line of Shravan Shah from Dollars Capital. Please go ahead. Thank you, sir.

Sir, one data point. What's the premium share for this quarter?

23%. 23%.

And second, sir, definitely as you mentioned that in terms of the demand for fourth quarter, we are looking at it to improve. But overall, if you look at for FY25 also, will there be some slowdown in the first half and nicknames for the full year? Will it be fair to say the max we can see is 6.5% kind of demand growth at industry level in FY25? Maybe. I think so. It is a possibility.

But our growth will definitely be much better than the industry growth.

Yeah, we will have higher growth. Definitely. Okay. And on the profitability front, sir, if you can repeat what you mentioned, I was not clear.

Did you mention that the profitability still have a scope to improve given the cost is still going to be on the declining side? Or will it be going forward in FY25, will it be more from the pricing perspective, we can see the profitability to improve?

I didn't comment anything on future profitability. What I said was you could see improvement or reduction in cost of fuel further. It all depends on how volumes play, how other levers of the P&L play out. Okay. Thank you. 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 audible? Yes, please. Yes, sir. Firstly, congratulations on this set of numbers. I wanted to know what a gray cement EBITDA per ton would be. Gray cement EBITDA per ton. We are at Rs. 1,200 per ton. depending upon operating EBITDA, how you calculate operating EBITDA, it would be around Rs. 208 per time. So our India business, when we decline numbers, I think it includes our white cement RMC also. So I'm just trying to understand if grey cement EBITDA would be slightly lower, but because of RMC, it will be a blended number of 1 to 0.8. Is my understanding correct? Yes. RMC is obviously part of our great event business. Okay. And from a KCL perspective, what would be our cost for the quarter? From what perspective? KCL. KCL. I already gave it, I think, 2.04. Okay. And where do we see it going in the coming quarter? Yeah, you should have been on the call earlier. I expected... No, no, I worked there for directionally. I just wanted to know how much... It will be reducing. Again, I also mentioned 6% to 8% reduction is a possibility. It will be more. It will be less. I don't have a control on that. Okay. Okay. Got it.

Okay, sir. Thank you.

Thank you. Thank you. The next question is from the line of Ashish Jain from Macquarie. Please go ahead. Hi, sir. Good evening. Sir, my first question was on the expansion. When we acquired Nadwara, one of the arguments was that we can easily double the capacity. But even in phase 3, there's only 1.2 million tons coming in Nadwara. And we have hardly added after the acquisition.

And from profitability point of view also, I think in the past, they've highlighted that Nadwara is fairly profitable.

So why are we going so slow on Nadwara expansion? Nadwara, actually, what you are talking, 1.2 is the cement, actually. But the slinker is 3.3 million tons. Obviously, the grinding has to take place not entirely at the gem site, but in the market. Right, right. So think of it as you're adding pay between Nadwara. Got it, got it. And secondly, in terms of Keturam, is it possible to quantify the potential Keturam offers? I missed your question. Repeat, please. I'm saying, Keturam, is it possible to quantify the potential Keturam has in terms of capacity addition, given that was one of the reasons you said for the acquisition? So, whatever we studied, their existing location in Karnataka, that definitely has limestone and land available to expand. Okay. So my last question, you know, like this quarter, if I see, nearly two-thirds of your renewable power is coming from wasted recovery. So out of the 24%, 16% is wasted recovery. So in 2027, the 60% target that we have, are we seeing the dependence on solar or wind going up or the mix will be maintained? Yes. No, no, no. It will go up. So what will be the next then ballpark if we have any, but I'm sure we will have a long-term plan. So solar would be around 34% out of 60 and 26% would be WHR. Sorry, out of, okay, okay, 34%. 34% would be renewable energy. Sorry, sir, I thought 60% target by 2020. Total, that is green energy. Right. Okay, got it. 85% by 2030. Right. Which will be largely delivered by renewable energy. Okay, got it. Thank you so much. Thank you.

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

I have two questions. First is we have given a long-term carbon intensity target of 462. This includes scope 1 reduction of 27% from the baseline and 69% on scope 2. Is there a roadmap which is there to reduce carbon intensity? I would presume clinker factor would be one of the variables. So when we are looking at phase 2 and phase 3, are we looking at this particular variable to shift significantly? That's the first question. So to answer yes, clinker factor will be the largest driver for reducing the CO2 emissions. We have a concrete plan in place to reduce clinker factor. New products which are getting added, variants which are getting added, which help improve the clinker conversion factor. Sir, would it be possible to guide any particular clinker factor number, say, by FY26, 27, or, say, 28, something in interim before 2032? No, I would not want to reveal that. Okay. And, sir, as you indicate, we will focus on clinker factors, and how should we understand the demand-supply dynamics for flash and slag? It could provide some color over here and specifically on the cost inflation for both this variable. My sense is that the country will not have any shortage on account of fly ash and slag availability. Cement industry will not suffer because of that. Okay, but from a cost inflation standpoint? On these commodities? Yes. It's a matter of demand and supply. For example, fly ash can vary from zero cost to 500, 600 rupees per ton plus freight. So it purely is on demand and supply. Sure. And so you said new products getting added. Are we referring to, I don't know, LC3 or something else? Also would like to have your thoughts given BISF come up with the norms over here. So is it a variable that we will look at going forward? Yes, the LC3 is still not, I would say the commercialized some pilot scale production has started in the Western world, at least India, nothing has happened. But yes, it is very much on the radar and we are working on it. Okay, so we have the product ready. It is just that we have not commercialized. Should we read it that way? It's not a question of product, because the product is not so important to produce. But I think overall the technology and the scale, actually, because if somebody can produce in, say, a thousand TPD plant, but it should be scalable to a higher level. And at the same time, the environmental availability is also to be ensured, actually, at least for 30-40 years. Sure. And, sir, second last question, sir. Can you give some color around – it's good to see bulk cement terminals being added. If you could provide some color on why the rationale behind the location where we are. And after phase two, phase three expansion, any broader thoughts on distribution? So I see a lot of jetties on the western coastline, but we have hardly anything on the eastern coastline. So how should we understand that and the location of the bulk cement terminals? Anything on the distribution, say, four years out, five years out? They are clearly determined by the market and, you know, the market and the kind of demand that exists in those markets. And for East Coast, you want to say anything?

The East Coast, because, again, the availability of the right kind of ports, etc.,

is generally hampering unlike where the terminals are there in southern India. And ultimately, it's a very composite subject in terms of where you have your integrated facility option and what are the markets which can be conveniently served actually to those markets. So it's a question of taking integrated holistic approach of putting up either bulk terminal or grinding in it. But again, sir, we don't see much of bulk cement terminals on the eastern coastline. So what we have is pretty few actually. Because in the east it is not there because everything is to be moved by rail only and the rail availability of brakes itself is a major challenge in the eastern India.

So there is no like the sea movement which is happening from Gujarat to the southern side.

It's purely... the land movement because the most of the cement is coming to the Eastern India Farm certificate cluster. Sir, I just need one bookkeeping question. Will it be possible for you to give a split of OPC, PPC, PSE and composite? Probably for the last fiscal or probably I can take it afterwards. What did you ask? Product mix, OPC, PPC, PSE and composite. Everything is blended is one and rest is OPG. I wanted to break that thing up. Probably I'll connect off time. Thank you so much. Thank you. The next question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead. Yeah, good evening, sir. Just one question left. So Gratian will be launching its paint venture soon. And at the time of the 4A, there was some sort of discussion that the wide distribution network will be used of Ultratech. So any sort of compensation or benefit we will get? Any quantification since it's very close to launch now? We are working on business sharing agreement. But as far as dealer network is concerned, it's a free market. There's no really a royalty that we will get from them for accessing those dealers because they are not our private domain. They are not our proprietary concerns. There are individuals whom anybody can approach to do business.

Okay, so nothing meaningful from this?

They are working independently. We have no role to play in their working model or whatever they're doing. Understood, understood. And just if I may, second question, I mean, if you see from an industry perspective, last 1801, there's been three or four big M&A announcements by us and by a few peers. Over the next, say, one, two years, do you see there's further consolidation happening in the industry and any sort of broad capacity you would like to and what sort of consolidation is left in the industry that could happen? I think consolidation will be a theme for a few more years. Things will keep happening as we progress along, as the industry progresses along. That is a given. There are lots of names and I'm sure you would know them yourselves. Instead of me, for me to repeat them on the call, the names are quite evident who will be there on the radar. Got it. Got it. All right. Thank you so much and all the best, sir. Thank you. Thank you. The next question is from the line of Vishal Periwal from IDBI Capital. Please go ahead. Yes, sir. Thanks for the opportunity. I think in the call you briefly mentioned that cement prices in quarter four is slightly lower. Region-wise, will it be possible to share how they are? I don't have that immediately. Okay. Okay, fair enough. And second, I think you did touch upon that fuel cost will be lower in quarter four. So the six to seven percent number, that is for this particular quarter, quarter four, on a quarter-quarter basis, or it is six to eight months? Two quarters, safely. Okay, okay, sure. So one can say that probably a split between quarter four and quarter one. Yes, yes. Okay, sure. Thank you so much. Thank you.

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

Yeah, thank you for the opportunity. So just one question. Given the plans of Phase 3 coming in end capacity by FY27, But is there any indication how much we could see in FY26 as such or it will be like a lean year as such? No, no, no. So it will be spread and keep coming gradually. And as we progress on work, we will give a further granular schedule. Because right now, as I mentioned, technology orders have been placed. A couple of sites have started civil work. Major work will start, I'm assuming, in 2025. Once there is traction, we will give a schedule. The way we have given the schedule for Phase 2, we will give a schedule for Phase 3 as well. Understood. We'll look forward to that. And just one more question. You said for the quarter, the blended cost is around $150, and within that, that quote was more like $126. So at current spot rates, which are more like $115, $116, the blended cost will be around $130, $131, which is roughly $20 saving from current level. Everything gets converted. Everything is at $115 and you have the math. Yeah, you are able to get at $150. Everything. One shipment gets over $115. But you all know well that the availability of pet coke is very limited. And with every parcel, the price gets increased. Okay. Thank you. Thank you so much. Thank you. The next question is from the line of Amit Murarka from Access Capital. Please go ahead.

Hi, thanks for the opportunity again. So my question was in the carbon trading, which the Indian government is now looking to implement, the CCTA scheme that is. So could you help understand, like I believe the trading will start in FY26 and FY25 will be the year when the monitoring starts. So where do you think the benchmarks will be and is there any potential cost that would come in because of that?

No idea whatsoever. I think I'll have to learn when you learn. Let me know if you come to know about it. I think there is a lot of talk, but I think it is too early to get a real sense because there are multiple levers that the government is yet to take easy.

Okay, got it. And also on this blended fuel cost of 150 and Petcoke 126, So, the coal, which means, implies about 170-75, correct? I mean, if I'm not wrong in assuming a 50-50 split. And spot coal, as I can see, at least RB1 at all is now at close to 100-105 dollars. So, the difference seems to be quite big in that respect, if my calculations are correct.

So, Amit, this is at 7,500 CVs.

Okay, got it. But what is the split between petcook and imported coal right now?

50-50% in terms of next. 44-46. Yeah, you're right. 44-46. Okay.

And lastly, Kesaram, rebranding strategy, if you could highlight about like earlier, we have seen you shift quite fast into ultratech brand. So will the strategy be similar here or will it go slower?

We are not doing anything on case around as yet. First focus is to get regulatory approval and start working on it after that. There's plenty of time.

Okay, thanks.

Thank you. Thank you. The next question is from the line of Aman Agrawal from Equitous Securities.

Please go ahead.

Yes, sir. Thanks for the opportunity. One question from my end on the eastern market. So, you know, many peers have been highlighting for quite some time about the slowness in demand in the eastern market, especially in states like West Bengal and Bihar. What would be your take on that? What would be the key reason why demand is still not panning out as buoyant as other regions? I think there have been, as I mentioned in my commentary also, there have been fiscal challenges in the states of Bihar and West Bengal because of which there has been a slowdown. Okay. And then second, just lastly on industry growth that you would be expecting for 3Q. I'm sure you said that Alphatex has kind of grown better than the industry. Any number you would like to assign for the industry? Like I mentioned, I think we expect the industry to be anywhere between 3% to 4%. Okay.

Sure. Thank you. Thank you.

Thank you. Thank you. Ladies and gentlemen, that was the last question. On behalf of Ultratech Cement, that concludes this conference. Thank you all for joining us. You may now disconnect your lines. Thank you.