Ultratech Cement S/Gdr

Ladies and gentlemen, good day and welcome to the Ultra Tech Cement Limited Q2 S525 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Atul Daga, CFO of the company. Thank you, and over to you, Mr. Daga.

Thank you. Good evening, everybody, and welcome to this earnings call today. This quarter, I believe, has turned out as expected. Pre-election slowdown, followed by a slowdown in April, June, with elections, and then monsoons, which have been intense in most parts of the country and also the longer duration of monsoons this season. Some parts of the country have been witnessing rains as of now also. All of this put together has resulted into ultra-tech capacity utilization at 68%, delivering a 3% growth in volume terms. Good monsoons is not just not good for the short term, but results in a good season for rural markets in the long run with improved cash flows. Thus, we envisage and expect good rural demands in the coming seasons. Agricultural production for both summer and winter crops likely to be higher, as reflected by the sowing activities during summers and increasing water reservoir levels, which bode well for the winter season. We have to also keep in mind global events which have an impact, which do not directly impact our business because it's domestic, but global events being of the nature that they are, can always have an indirect impact. Ocean trades, to name one of the key elements, which can go up and impact our input costs. China has introduced a stimulus package. We have not yet seen the big impact on the global market, but I'm sure there will be some positive, some negative out of that. Let me come to the burning question of all quarters fuel costs. Our high cost fuel contracts have almost come to an end with a very small impact left in Q3. You would have noticed petco ratios have gone up 54% this quarter. And rupees per kcal has dropped to 1.84 from about two rupees in the last quarter, a decline of almost 8% QOQ. The most important factor would be demand, which we need to keep an eye on. Urban housing has been doing well so far as is being visible from the growing number of registered projects across the country. We believe that new infrastructure projects orders will start gaining momentum. Although it has been a subdued start from Q1 and during the quarter and the reporting, we believe that things have started moving and awards have started picking up. 589 kilometers of projects have been, road projects have been awarded by NHAI and MOTS. though lower on a year-to-year basis. During the quarter, various projects approved to improve countries' infrastructure have come to light. Some of them are Chennai Metro, 63,000 crores, Mumbai Ring Roads, 58,000 crores, Pune Ring Roads, another 42,000 crores, the PMGSY fall, 70,000 crores, or with 15,000 crores for roads. Central government approval for Bangalore Metro Phase 3, approval for Thane Integrated Metro Rail Project, and so on and so forth. So the list will keep on increasing. We are very confident that there is not going to be a slowdown. We have just few announcements, as I mentioned. With government's continuous stress on infrastructure, investment outlay is estimated to increase to about 75 trillion INR over the next five years, increasing to 1.6x from investments of 47 trillion over the last five years. Housing launches are continuously growing at double digits since last few years. Urban population in the country has increased, from 26% in 1990 to about 36% in 2024. And we believe that the pace of urbanization will continuously accelerate further. Urbanization is currently to increase in demand for housing across all categories, affordable, mid-level, luxury, ultra-luxury. Also, we have to keep in mind that This is forming a low base. This quarter is forming a low base, which will generate good growth in percentage terms. We are also seeing improvement in demand in the commercial space, which is represented by commercial offices, warehouses, data centers, and the likes. Talking about our own growth plans, our expansion projects are on track. and we will commission another 8 million tons of capacity in H2, taking us to 157 million tons of capacity by the end of fiscal 25. And as per our announced organic growth plans, we should be reaching 184 million tons of capacity by FY27 in India.

On to the acquisitions.