Ultratech Cement S/Gdr

Ladies and gentlemen, good day and welcome to the Ultratech Cement Limited Q3 FY25 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 conference 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, Chief Financial Officer of the company. Thank you, and over to you, sir.

Good afternoon. and welcome all of you to our earnings call for Q3 FI25. First and foremost, wishing you all a very successful and a happy 2025. We often talk about a lull before the storm. Most part of the calendar 24 was a lull for cement industry for multiple reasons known to all of you, which we have been discussing from time to time. The lull ended somewhere in December on a positive note. The storm is a positive storm, and we have benefited from a continuous increase in demand, which has also boosted the sentiments on cement prices. We have seen a movement in realizations. Q3 average 1.4%. This was QOQ. North and West saw the best performance in terms of price improvements, which was more than 3%. January, we have further seen improvement in prices in Central and West. North remains the star performer, as I said, increasing prices and profitability to the highest. And talking about stars, well, this was an offer on the table which we chose to invest into. I'm talking about our investment in Star Cement. As you know, it's only a non-controlling financial investment. We have been trying to identify opportunities to deepen our presence in the Northeast markets. Hopefully, this investment will help us understand the markets better and what are the opportunities in those markets for us to grow. When we had done the transaction, there were lots of different numbers floating in the market. I want to clarify we have purchased 8.42% in the company at a total investment of 776 crores. Let me now touch upon India Cements. Open offer was subscribed 110% concluded on 21st of Jan at a price of 390 per share. We will now hold about 81.49% equity in the company and there are regulatory processes to be followed to bring it down to 75%, which we will be doing in as per timelines allowed. This will result into our average cost of equity at 359 per share. Net debt in the company as at 31st December 24 is 877 crores, 877 crores. Thus, the EV of the company at our acquisition cost works out to about 12,075 crores for a capacity of 14.45 million tons. I leave it to your calculators and your exchange rate interpretations to derive the dollar per ton cost of this acquisition, which is certainly not $120. It's way below, but it's below $100 per ton. Further added to that, the debt will get reduced with cash generation from non-core assets, which the company has. We have started engaging with our team at ICL and studying the opportunities that lie before us. The initial review gives us an opportunity of de-bottlenecking some of the capacities towards the plants. There is a de-bottlenecking opportunity as well as Some brownfield expansion opportunities exist in another set of two or three plants, which will help us in our growth journey in years to come. Our focus is to turn around the performance of ITL in less than 12 months, starting January 25. There will be some return-based CapEx plants which are being worked upon. As you know, we entered the company only on 25th of December and have not even, not spent even a month studying their operations. Allow us one quarter to revert with our full plans. We are awaiting the last of the approvals for transfer of mines in Telangana and Karnataka and we are tracking every step. There are multiple steps within the transfer formalities We are tracking all these steps and we expect to consolidate the assets of KSORAM within this financial year. Organic Apex. All our project sites are progressing well. The target closing this year at 185 million tons of capacity. This includes the two acquisitions of KSORAM as well as India Cement. Let's talk about demand. Demand seems to be opening up, which is good for the industry. We are seeing it across all sectors. Pent-up IHB demand, infra-growth, urban housing growth. Urban housing growth is maturing or slightly slow, but still continues to consume cement. Rural markets are, of course, driven by the housing demand and continue to grow strong. A point worth mentioning Mentioning here is that rural demand should be positive with the good monsoons that we have seen, good crops, and good harvest, which will generate good cash flows for the rural markets. Capix programs have been gaining momentum from the end of Q3, but it is still a long way to go. There are stimulus for mass housing programs which are coming back. Cement demand clocked an improvement in December 24 after being subdued in October and November. And it's likely to further increase as we speak in the current quarter, quarter four FI25, with a pickup in government capex and demand overall. General government capex which dropped 20% After this, YY growth in 24 was down about 12% in April to November 24. State government CapExes were also down. CapExes by PSUs were also not growing very strong. We believe that the government CapEx will start improving and consequently, cement demand shall start improving from January 25 onwards. Whilst April to November was a slow period for cement demand in India. I believe that the demand momentum is picking up and it will remain strong in the years to come. And Indian cement industry is gearing up to meet the surge in demand in the coming years. At Alta Tech, work is in full swing for adding additional 10 to 15 million tons of organic capacity in the year 2026. This will take us to a 211, 212 million tons of capacity at the end of our expansion program. Talking about our efficiency improvement programs, which are also on course, Blinker conversion ratio of 1.45 for this quarter as compared to 1.44 in Q4 last year. Lead distance is at 377 kilometers this quarter as compared to 400 kilometers when we started this journey on efficiency improvement program. WHRS was at 324 megawatts up from 278 megawatts at the end of Q4 24. As far as WHRS is concerned, we had spelt out our targets to reach 450 megawatts for Ultratech capacities. This target will go up to 511 megawatts of capacity, taking into account the additional WHRS expansion, which will be done at India Cements and Quesoda. 511 megawatts of WHRS, which will be completed by FY27, on our 211 million tons of capacity at that point in time, will account for 24% of our power requirement. Similarly, renewable energy is up at 752 megawatt at the end of this quarter from 612 megawatts. And as for targets, we had given out a target of 1.8 gigawatts by the end of FY27. Taking into account the requirements and opportunities thrown up by ISM and KSORAM, this target is now standing at upwards of 2 gigawatts, about 2.1 gigawatts is what we are looking at to complete And this will support about 30% of our power requirements on the 211 million metric tons of capacity. Lastly, about fuel. At our size of operations, we don't have too much of a choice but to use coal also as a fuel given the overall global supply situation for Petco. However, we have been continuously increasing our Petco consumption with the fuel mix reaching about 58% of petro this quarter. Our fuel costs have come down accordingly to about 1.76 Kcal from 1.84 per Kcal in last quarter. Based on current spot price, we expect our fuel costs to be around 1.7 Kcal in the near future. And to conclude, We achieved an EBITDA permit return of 964. This quarter, we jumped more than 30% over Q2. And we expect further improvements going forward. Thank you. 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 the touchtone 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 question queue assembles. We'll take our first question from the line of Sumangal Nivatia from Kotak Securities. Please go ahead.

Yeah, good afternoon.

Thank you. And congratulations for a great set of numbers. So first on the volume growth, is it possible to share what would be the contribution of whatever six, seven days of India's event in the results, number one? And if you could give some more regional color as to which other regions, I mean, this is

10% odd growth, which regions we've grown versus the industry, higher or lower.

Yeah, I mean, that's my first question.

I'll ask the second one later. I'll forget your question. So we haven't taken into account the volumes of India segments in those last seven days for reporting our growth number. It does not make any sense. This is only the ultra-tech organic growth. I have already forgotten your second part of your question.

Sir, I just wanted some regional color. Which regions have done better than the other regions and where we think we should market share?

North and West continue to do well. I would imagine East was at the lowest rank as compared to the other regions.

And South will be the lowest? Or the weakest?

I would imagine would be the lowest and south. Then you climb up to central, north and west.

Okay. And what is our sense of industry growth in this quarter?

Industry growth, I think we'll have to wait and watch for some more numbers. But my sense is we should be looking at somewhere around 5%.

Okay, okay. That's quite heartening to see every quarter we managed to lead the industry. So great, great work.

We are the leaders of the pack.

Yeah, clearly. So my second question is more on the South region. Now we've seen four acquisitions in the last year, two where we've been worked.

I mean, what would be our strategy? I mean, whatever you can share with respect to South or the coming year with respect to our brand, penetration, use of India Cement, Kesuram brands, and then any market share target versus where we are today? So there are no market share targets. That's the easiest one to answer. Without having talked about it yet, we would definitely want to keep growing. If I look at the capacity utilization of India Cement, they were at about 57% for the quarter. Certainly there is an opportunity for improving the capacity utilization from that target entity. Out of that 14.45 million tons, how much is, 13 million tons is in the south. About 1.5 is in north and 13 million tons in south. So there is the opportunity to increase capacity utilization. Second point, Kiswaram, yes, they are slightly better off in terms of capacity utilization. They are operating at about 70%. I don't remember last quarter. 70% is what they were operating at. So there might not be too much headroom to improve, but maybe 4%, 5% we could improve capacity utilization in the southern markets for the Kiswaram set of operations. As for brands, all are parcel brands. We will wait and watch. It's too early to say how we will look at the various multiple brands of India Cement. Kesaram brand is also equally powerful. So it's more about there's no rush to change the brand, but at the same time, brand transitions will happen at the right time. Yeah, and just a follow-up, sir. I mean, last time, I mean, the profitability of these assets are quite low, even in terms of efficiency, etc.

So, earlier also, when we had merged JPA, there was some dilution of the blended, which eventually got transited to our levels of margins and efficiency.

So, what should we expect when we start reporting all these consolidated and blended numbers? What is the transition time we are looking at to bring these assets to our level of efficiency and marginally?

look at at least 12 months to improve the performance of India Cements to bring it up to a reasonable level. And as I mentioned that there are WHRS investments which have to be done for India Cements also, which is a return by itself. So WHRS investments would typically take, if I'm counting work start from January 25, we would start seeing the benefits of that only towards the October-December 26th quarter. So there will be one leg of improvement that you will see towards the end of 25. And then further improvement after. Efficiency improvement based CAPEX programs get completed. Similarly on KESORA, there are opportunities to improve the cost of production as well as realizations. There's a lot of opportunity that exists to improve our logistics costs on a consolidated basis. Now from our 25, we had how many? We will now reach about 60 million tons of capacity in South from 20 million tons? From 20 million tons of capacity. So obviously the density of our network increasing will help us reduce the logistics costs significantly. So there are lots of opportunities that lie ahead of us.

Got it. Thank you so much. I'll join back the queue.

Thank you.

Thank you. Next question is from the line of Amit Murarga from Access Capital. Please go ahead.

Hi, good evening. Thanks for the opportunity. So, my first question is on India Cements. So, is there any thought around like any brand transition or tolling arrangement for India Cements as well or will it be sold in the quarter?

Yeah, I think give us some time as we are studying the opportunity. We've just entered the company from 25th of December. So, perhaps next quarter results, we'll be in a better position to give more clarity.

Sure. And like Capex, I think you had earlier guided for a number, but including the KSORAM and India Cements, I think you had guided 8,000 to 9,000 crores earlier for 26 as well. So what would it go to now?

No, so 8,000 to 9,000 crores of CAPEX is on our Ultratech balance sheet. India's balance sheet needs to be studied, and it has to have its cash flows to meet those CAPEX requirements also. As for KSO RAM, I think we were looking at 400, 500 crores of CAPEX for KSO RAM, which gets baked into my overall numbers of plus minus. 9,000 crores for next year. These are the units which we are acquiring which will get absorbed in Ultratex from day one. India Cements is a separate listed entity.

And just lastly on fuel cost, you had earlier mentioned that by December all your higher price contracts will get over. Is that done now?

Yes, that's done.

Okay, but I think you said 1.7 rupees KKL. That would still be higher than I think market price. I think it's 1.4, 1.5, I think, for Petco.

That's why I qualified that statement by saying that we will have a fuel mix of coal as well as Petco. We will not be able to do only Petco. Had I been in a situation to do only Petco, the cost could come down dramatically since we'll be using a mix of this remains slightly higher. And, you know, if it is 1.7, it could become 1.6 depending upon spot market. My colleagues were telling me between two days, the spot prices of FedCorp have gone up by $4. So, this is, it's a continuously moving target.

Got it. And lastly, for KSO, could you provide nine-month financials as well?

Well, We haven't seen that yet. It would be there on their own website.

No, I think they're not showing cement business.

It's there as part of notes. It's there. Anyways, I'm asking Ankit to share that with you separately.

Okay. Thank you very much.

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

Hi. Thank you for taking my question. Atul sir, I understand, like you said, utilization rates for KSO Ram and India cement will improve over a period of time. Can you help us understand how to look at the overall volumes for next year? How does KSO Ram and India cement higher utilization rate help you gain further market share on volumes? So that's first question.

Okay, so we will go into the next financial year with about 185 million tons of capacity. It's in decimals, but I'm just using a rounded number of 185 million tons. We would look at a double-digit growth next year on our expanded availability. And I would assume a capacity utilization of anywhere around 80 to 85%.

Okay. That's a, that's hard to hear. Thank you so much. My second and last question is, I remember until last quarter, you used to give a comparison of a fuel cost on a consumption basis and a fuel price. So I see a fuel cost has come off by 6% sequentially. Can you help us understand where the price are on a blended basis?

$125. $125 per ton. Not mentioned. Okay.

Okay, thank you so much. That's it.

Thank you. Thank you. Next in line is Prateek Kumar from Jefferies. Please go ahead.

Yeah, I'm here, sir. My first question is on your leverage. We have not been given consolidated net debt. That was last quoted for 2Q at 8800 crores, including India Cement, now open offer. Where are we looking at our current net debt? Also, another related question.

Let me just show this to you first. I'll give it to you first. So, 3142 crores is the cost of open offer. Now, India net debt was 12,141 crores December. I'll request you to do the math. You know, no dumb numbers. I can do the math. 877 crores is India's cement. That takes us to 13,018 crores. Open offer will be about 3142 crores. That would be the consolidated net debt. 16,160 crores at the end of open offer.

Sure. Okay. And why do you say investments net debt as like 877 and not like they used to have like 2500 crore on net debt?

That's the magic of alternate experiment. That's why I, sorry, in a lighter way, as I said, the earlier expectation was that the EV per ton we have paid is $120. It's not $120. It's about $97 or $98 per ton. The debt actually as of December is $877 crores.

Okay. So, they will be still publishing their finances, right? So, that will now reflect a lower number versus… Two days ago, they had their board meeting.

They have published a result. They haven't published a balance sheet, but their press release carried. I have seen their press release, which carried the death numbers. Okay. I see that. And there is one question on this, again, in decimals.

Is there also evaluation of potential merger between two companies and you like sort of issuing like in case of case around share swap, likewise can happen in S&M?

Too premature, too early to comment on that. We have to evaluate the assets and how do we operate them? What is the profitability that we can bring it up to? There are lots of litigation that need to be resolved. from that company. As I mentioned, there are a lot of non-core assets which we will want to sell. There's no point in transferring those non-core assets onto the alternate balance sheet. So as of now, I think give us some time before we can spell out clear plans.

And the last question on your realization, you put one and a half percent for the quarter average. How is the exit pricing versus the quarter average for third quarter?

Sorry, exit, there are too many, exit, December.

Exit December pricing.

Exit December over?

PQ average.

Over Q3 average. So, it was marginally up. A percentage up.

This is Q3 average.

Just one second. Yeah. 1%.

Sir, these are my questions. All the best.

All right.

Thank you. Next in line is Jashandi from Nomura. Please go ahead.

Hi, sir. Thank you for the opportunity and congratulations on a good set of numbers. Sir, my first question is on limestone, especially in Tamil Nadu. Even if you look at India Cement, I think most of their limestone reserves are in Andhra Pradesh, Telangana region.

How is, you know, both Ultratec and India Cement placed on longevity and brownfield, you know, optionality in Tamil Nadu? Is there enough limestone in Tamil Nadu with India Cement? Yes, as of now, we have availability of more than 25 years of life. on the India cement. They are old plants, so Sankarnagar and Sankri, the two plants which are old plants, and they have a visibility of more than 25 years of life. Okay, that's good to know, sir. And my second question is largely on operating cost. I understand that on an organic basis, Alta Tech has set a target of reducing it by 300 rupees per tonne.

But on a console level, will the FY26 will see a significant increase in operating cost, given that India Cement is on the highest end of the cost curve? And since, you know, before acquiring this asset also, you would have, you know, this asset you would have studied. So any idea of how much CapEx or a ballpark figure would be required to bring it to, you know, the efficiency level of Ultratech?

That's my second question. Yeah, so the second part of the question, we entered the assets only on the 25th of December. We are studying. There will be CAPEXes. The no-brainers are the WHRS and New England Energy, which are return-based. But there will be some upgradation CAPEX also, which the team is studying. And we will revert back on the CAPEX that we want to do. As far as operating costs are concerned, I think we have started seeing reduction in their operating costs in the first month itself. And while I don't have an exact date or exact period by which the costs will align, but you will have end 26, October, December 26 is when the WHRS implementation. That's a long-needed KF-X project which will get completed. So, by that time, you would see an alignment of their costs with our costs.

Okay. Understood, sir. And just last thing on the, you know, Shankar Nagar plant. If I'm not wrong, there was some, I think they had applied for an EC extension or something. So, they are sorted on that front? Just to clarify, sir.

I'll have to study that to find that out myself. Not aware. No worries. Thank you so much.

I'll join back with you.

Thanks. Thank you. We'll take our next question from the line of Phulkit Patni from Goldman Sachs. Please go ahead.

Sir, thank you for taking my question. Sir, in the previous acquisition that we've made, rebranding has been a very big kicker in terms of the differential realization that Ultratech gets versus other brands. Now in this case, if rebranding is going to happen over time, at least not immediately, what are the levers where you can see such a significant cost cut that we'll be able to improve profitability? So first of all, what today is the realization differential between Ultratech and India Cement in the same micro market?

Just one second. How much is the difference? That's on a selling price basis. Selling price basis about 20 to 25 rupees a bag is the difference. And we are, as I said, we are evaluating. There are low-hanging fruits in rebranding at the ICL units. We will start seeing rebranding as we progress. So day one, you will not have 100% rebranding, but in due course of time, maybe, nine months, 12 months, you will have a rebranding effort. But first quarter also, we will start seeing some plants doing rebranding.

And also, Sangi, you used to give a quarterly roadmap of when your EBITDA per ton would actually merge with the main brand. Any sense on how that will be for Kesaram and India Cement? Eight quarters, ten quarters?

All of Alcatec Cement.

Yes, sir. We are trying to project profitability of Ultratex Cement only.

No, no, but don't ask me questions about Sanghi Cement.

No, no, I'm just saying that in terms of projecting that improvement in EBITDA per ton, is there a roadmap whether we'll be able to do it in six quarters, eight quarters, ten quarters earlier? I mean, just a sense of that.

Also, I was saying, no, I don't know why you mentioned Sanghi Cement in our call first. That's why.

Oh, no, no. I'm so sorry. No, no. I meant Binani.

All right. So we are looking at at least 12 months to turn around the performance of the India Fernand assets.

And when you say turn around, you mean the same profitability that our mother brand gets?

No, not the same. Maybe 200, 300 rupees lower.

Okay, sir. Thank you.

Thank you. We'll take our next question from the line of Ritesh Shah from Investec Capital. Please go ahead.

Hi, sir. Thanks for the opportunity.

Sir, first one, are we looking at any contingent liabilities specifically after the Supreme Court judgment which has allowed states to levy taxes on minerals, including limestone? So, first and foremost, we also hear that there is thinking within the central government to do something about this judgment because there are a lot of PSUs getting impacted in a far significant way. Secondly, we are impacted by the levy only in the state of Chhattisgarh and Rajasthan. We are not impacted. However, India Cement had a liability. No? No. Okay. Sorry. So we are not looking at any adverse liability. However, now you would have read about Tamil Nadu wanting to levy a new tax, Karnataka wanting to levy a new tax. So these things will surface for the future periods.

Okay. So nothing adverse?

No, nothing adverse. Nothing adverse.

Okay. Great.

So, second is that industry level, what is the sort of supply that we are looking at based on your estimates for, say, FY25, FY26, FY27, broad numbers would be quite useful. So, as I mentioned, we will do about 15 million tons of capacity and taking other bigger players, we will see about 50 million tons of capacity getting added in FY26. Okay.

Okay, that's useful.

And I said you have given separately a revenue number for UBS on slide number 26. Is it possible you quantify the number for nine months and also EBITDA and PAC numbers? And if there is an incremental game plan over here? If we don't have it immediately, I'll share it with you, Ritesh. Sure. And sir, what's the game plan on UBS stores? The count has increased. I think one of the slides mentioned the significant contribution of Graysam and Saleswire UBS. So are we looking to monetize this? How should one understand it? This is the way we are monetizing it. It is helping us sell big volumes of cement in the retail market. Do you want to think about listing it as a separate entity? No, there's no plan like that.

Okay, sure. This is helpful. Thank you so much.

Thank you. We'll take our next question from the line of Rajesh Ravi from HDFC Securities. Please go ahead.

He's not there, I think.

Mr. Ravi, can you check if your line is on mute?

He's not there in the queue.

Since there is no response, we'll move on to the next question from the line of Naveen Sahadev from ICICI Securities. Please go ahead.

Yeah. Thank you for the opportunity and, indeed, great set of numbers. My question was first on this northeast plan. So I think a year back, we had floated this or incorporated this company by the name of Lytian Valley, if I'm not wrong. So what is the progress there? Is there like, you know, since you incorporated, I believe, could have been with a local partner and land and like, you know, the location is identified, but we haven't heard anything there.

Yeah, because mines is required and northeast is. seemingly a complicated market with involvement of tribal in land ownership, mine ownership. So we haven't been able to identify a clean mine land as yet. And as soon as we do that, you will hear from us.

My second question was then on the outlook for pricing in south. one of your peers in South mentioned of expectation of huge, like, you know, intense competition or competition further rising with the ramp up of Penna and India Cement, even Kesaram to some extent. So would you concur with that, that rising in South could continue to remain subdued despite demand picking up or how should one look at it?

If demand picks up, my guess is prices will also improve.

Understood. And my last question, sir, can you just mention what is the console net debt?

I just gave that number a minute ago. I'll go back to it again.

It was the enterprise value calculation, I think.

16,160 crores. After taking into account the money required for open offer.

Okay. 16,000 is the current net debt. Understood. Thank you. Thank you so much.

Thank you. We'll take our next question from the line of Patanjali Srinivasan from Sundaram Mutual Fund. Please go ahead.

Thank you for the opportunity. Am I on?

Yes, please go ahead.

Yes, sir. One thing I noticed in our presentation, so our power cost per ton has actually stayed more or less flat like in over a year. Whereas a share of green energy has gone up from 24% to 33%. Can you tell me, like, why the drop in costs has not really happened here?

So, yeah, from 424 to 402, that's the drop that has happened. And if I were to, I think, index it with the coal cost, coal costs might have gone up. It's relatively lower. So, you know, the delta will be small between solar power, you know, generation cost versus landed cost. There is about 40%, 35 to 40% difference between renewable energy and the thermal power cost. So, this is what it is. I will, in any case, deep dive and revert to you.

Sure, sir. Thank you. And just one last question. Are CAPEX numbers for 26 and 27?

So, 26 will be around 9,000 crores and 27 will taper down. Maybe 6,000-7,000 crores to complete our expansion program.

Okay. Sure, sir. Thank you.

Thank you. Next question is from the line of Bhavin Sheda from Inam Holdings. Please go ahead.

Good afternoon, sir. Very good set of numbers across.

So a few questions. One of the consolidated debt which you mentioned, 16,160, that includes the number of what you said, Indian cement, 877 crores?

Yes, please. And the open offer money which will get paid on the 4th or 5th of February.

Sure.

But sir, when I am seeing the India Cement numbers which were available for September 24, the debt was roughly above 2000 crores. So, what has happened in last 3 months or is there some different calculation what must have happened between these 3 months? How could India Cement debt come down so sharply in 3 months?

They have announced the December number. I don't know what was their September number.

So December, the balance sheet was not disclosed.

They have mentioned it in their press release and we have taken over a debt of 877 crores.

That's roughly a net debt number.

Yeah, at that number.

And the additional question on that press release itself is what I was going to discuss with the revalued assets which you will be consolidating. So there is a revaluation of roughly 5,300 odd crores where the land, mining land and plant and machinery was revalued before the Ultratech taking over consolidation. So can we assume that the large part of revaluation has happened on the land part?

Mainly on land.

So we should assume that could be the unlocking potential when it comes under our fold?

As I mentioned, there are lots of assets, non-core which I count. So land, large part of the land is required because that's the mine land and the plant land. Besides those, they have lots of land which are not... fit for a cement grinding unit or an integrated plant or a bulk terminal. So those we would want to monetize. Sure. And there's a last question on the lead distance.

Very good to see a reduced lead distance in the quarter, which was, I think you mentioned the number of 377 kilometers. And now with new acquisition coming into fold, so you have much more capacity where you can service the market from nearby plants. So would there be enough space to again reduce this lead distance when you look at your overall portfolio?

Certainly. We would look at this number dropping down further 5-6%. That would be great. Thank you and best of luck. Thank you. Before we take the next question, I wanted to clarify about the question which was asked previously on the power cost. There was a one-time charge which was levied by Andhra Pradesh government which amounted to about 47, 48, 48 crores, which we had to account for in the December quarter. And that is why the December quarter number is looking slightly higher. The impact of 15 rupees. So 402 would drop down to 387. Yeah. Go ahead, please.

We'll take our next question from the line of Rashi Chopra from Citigroup. Please go ahead.

Thank you. Just continuing on the cost, so from here on, like how much more improvement can we see? I think earlier on you were mentioning about Rs. 300 by September 26. So how much of that is already done and how much can come?

I haven't calculated. You have a calculation. Thank you. Okay, thank you. Okay, so let me complete it in the March quarter, Rashi. We'll give it in the presentation.

Okay, that's fine. Then on the realization you mentioned that the December exit is about 1% higher than the CQ average, right?

Yes, it is.

And January, there will be further increases in Central and Western India?

It will be about 1.5%, yes.

In Jan, 1.5%?

Yes, as of now.

Got it. And what are the expectations, I mean, for the remaining quarter?

Yeah, we definitely want prices to go up further. That's our expectation.

Got it. And then lastly, on the CapEx, so this year, what will be the full year CapEx? So next year, you said it's 9,000?

Also, we should cross 9,000. I didn't go up. It should be 9,000. We are already at 6,000. Can it cross? We have already completed 6,300 crores. January, March should be doing 3,000 crores more.

I'm sorry.

This doesn't include KSORAM, right?

Yeah, this does not include KSORAM.

Okay, thank you. That's it.

Thank you. Thank you. Next question is from the line of Satyadeep Jain from Ambit Capital. Please go ahead.

Hi, thank you. Satyadeep, just one question on coastal transport. You already have, say, a program. I just wanted to understand, there was obviously another asset in play in the vicinity, but it didn't seem ultratech was looking maybe competition CCI since you're already there. I just wanted to understand what's your experience being – is that plants would be similar in utilization and profitability to other plants you have. When you look at the overall mix in transport, for you going forward, do you see higher share of coastal transport in the mix?

Yes, we will see an increase, but in the overall ratio, it's about 3%. We'll not go beyond 5% of the overall mix. As far as the Sevagram plant, the Kach plant is concerned. It's a low draft area which has made it challenging for birthing bigger vessels. So my belief is rail is becoming available in that market very soon. So rail network will start improving the capacity utilization from that market.

So even for Sevagram, you would see, so currently utilization level you're indicating for that plant would be lower, but with the railway line coming up, utilization... It will pick up.

It's a hot market. It will pick up.

Okay. Thank you so much.

Thank you. We'll take our next question from the line of Shravan Shah from Dollard Capital. Please go ahead.

Hi. Most of the questions have been answered. Just a couple of things, sir. In the fourth quarter, how much demand at India level we are looking at? And if possible for FY26, how much are we looking at cement demand growth? FY26, it will definitely be a double-digit growth. And quarter four, generally, it's a very high quarter. What is the base that you are comparing it with? Over Q3, obviously it will be growth over Q3 easily. No, sorry.

Sir, I'm looking from an industry perspective and not from your, definitely you have said you will be growing double digit.

I was talking about industry perspective. Industry will definitely achieve a double digit growth next year, given the fact that sorry, you're asking about industry. Industry would do about 6-7% growth. We will do about 10% plus growth is what our game plan is for next year also.

And for this quarter, fourth quarter at industry level, 6-7%, that's the number one can look at or it could be a much higher?

Easily, it should be higher, I think. The way January-March quarter is... It should be higher. Okay, got it.

And, sir, what was the clinker utilization in the third quarter? And is it possible how much clinker capacity we would have added in this nine months? And what is more are we planning to add?

So, clinker added during this period is 6.7 million tons of clinker was added. Another 3.35 million tons is about to get launched in this quarter, clinker capacity. And the next question that you asked was about 76% is the capacity utilization.

Okay. And in FR26 also, would there be close to 10 million ton kind of clinker capacity will be adding?

Yeah, 10 million tons. Exactly 10 million tons.

Okay. And, sir, you mentioned that the cost reduction plan previously you said 300 odd rupees that we were looking at by FY27. That now we will be disclosing this number after the fourth quarter results. That is what you mentioned?

Yes, sir.

Okay. Thank you, sir, and all the best.

Thank you. Thank you. We'll take our next question from the line of Anuj Jain from Globe Capital. Please go ahead.

Good evening, sir, and congratulations on the good set of numbers. Just wanted to understand, I mean, in today's presentation, you have mentioned that for the merger of KSO Ram, will they require additional approvals for those two mines, Telangana and Karnataka? And in the opening remarks, you have said that by financial year end, you will integrate all the, you know, the case around with UltraTech. Just want to understand, generally, these states, you know, take much longer time than we anticipated. So, how much delay one can expect, you know, for the integration? So, I have kept sufficient buffer in my hands before telling you the end of the year. So, as I mentioned, these are at the last stages of two or three approvals pending within the authorities, which should get completed very soon. And we are very confident there will be no slippages beyond March 25. Got it, sir. Thank you so much. That's it from my side.

Thank you. Next question is from the line of Rajveer Dandan from Ventura Securities. Please go ahead.

Thank you for the opportunity to give me the question.

I'm going to use your handset mode, please.

Yeah. Hi. So the first question I had was for the 8,000 to 9,000 crore KPEX that you are planning, will you be taking any additional debt for that?

No, this can be funded by internal accruals.

Okay.

We expect our debt to start going down from next financial year in small steps. Next year, because CAPEX plan is big, so you will not see too much out there deduction, but it will not go up.

So this 8,000 to 9,000 crores figure is for how many years?

For next year.

Okay.

So can you give an estimate? No. The CAPEX, if you're asking, 8,000 to 9,000 crores is next year and The year 27 will be much lesser. It will be the remaining elements of our organic growth plans, which has to be the completion stages. So 6,000 crores plus minus is what we are looking at.

All right, so my second question was, do you see the EBITDA button figures for India Cement and KSRM to reach the levels of UltraTech by FY27?

Yes, please.

Yeah, all right. Thank you so much.

Thank you. Next question is from the line of Sanjay Nandi from VT Capital. Please go ahead.

Yeah, thank you for the opportunity, sir. Congress made a good set of numbers. Like most of the questions are answered, sir, can you please help us with the regional utilization levels if possible, sir? I think I had answered that question. And we had east, which was below 70%, and other regions were in the plus minus 75%. Got it, got it, sir.

Thank you for the opportunity, sir. Wish you all the best. Thank you.

Thank you. Next question is from the line of Prateek Kumar from Jefferies. Please go ahead.

Yeah, thanks for the opportunity. I have just a couple of clarifications. Firstly, on F527 CapEx of 7,000 crore, so that would be excluding India Cement related optimization.

Yeah, this is only on our expansion program which was going on. Which is going on, sorry.

So including capex on, which you said KSRAM is like not so material, but indefinite capex included, capex may again like still be 8,000, 9,000 crores kind of.

Yeah, if you have to count the capex of indefinite, I don't know how much will it be. It will be 13 more than 500 crores. So the 500 crores was what is being earmarked for KSRAM.

All right. And one clarification on branding. So, Inesiment has like most of brand and then obviously there are associations like IPL, etc.

So, when we integrate these brands, so these will like sort of migrate to AlterTech.

You said that there's 20-25 rupees gap there. And then all these other associations like IPL also like sort of moves to you or there's some royalty fees there.

How does that work? IPL? No, there's no cricket with us. So that company CSK has already been iced off long ago and there's no IPL as in cricket IPL, right?

No, no. So that was the branding partner, right?

The investment is used as a branding partner for CSK. Maybe I'm mistaken.

No, no. We will not be. No, we will not be. We will not be branding partners for cricket. That is one. And you asked something else also.

And the various brands of India Cement moves to AlterTech?

So all the various brands are part of India Cement owned by the brands are owned by India Cement as a legal entity. They continue to be with that company. So CSK as a cement brand exists which will be owned by us. CSK? Cement brand, yeah.

There is no association with credit. Right. Thank you.

Thank you. Next question is from the line of Kamlesh Jain from Lotus Asset Managers. Please go ahead.

Thanks for the opportunity. Just one question on the part of Yeah. Sir, are there any loans and advances which have been given to India Cement which has resulted in loan attack? Just a bookkeeping question.

I am sorry, what?

Sir, have we given any loans and advances to India Cement?

No, no. Alta Tech has not given any loans and advances.

Okay. So, can you summarize like what was the reason for the debt to go down?

Has there any been

land sale there because I believe in such a short period such deals can't happen at like say We have monetized assets which has helped release cash flows to reduce debt.

Great. Thank you.

Thank you. Next question is from the line of Ishwar Arumugam from ITOP EMS. Please go ahead.

Sir, thank you for taking my question, sir. So, the first question I had was the Southside cement prices, sir. It has been very dull this quarter and the pricing cases have not been able to speak much.

Moreover, there used to be a disparity between the TN Kerala prices and the Andhra and Karnataka prices.

But TN Kerala used to be better priced than Andhra and Karnataka. But the prices are converging now. Is it because players are fighting to gain market share? Or is it just because of the demand?

I really won't be able to comment on that micro analysis that you're doing. But my belief is Andhra Pradesh is going to improve demand sentiment and it will benefit the entire south. which will help improve prices in the respective markets. Sir, you said that you've grown from 20 million tons to 60 million tons in South. So what would be the approximate market share gain for the company in terms of volumes? In terms of capacity, I believe South is 180 million tons, 196 million tons of capacity. So... We are very close to 30% capacity share.

Okay, right.

And what is the outlook and future plans for UBS, sir? Is there an increasing trend, you see, of people in the urban areas preferring building material solutions instead of cement?

What is the outlook there, sir?

Outlook is very bright, especially in Tier 2 towns and Tier 3 towns. UBS as a platform is convenient for individual home builders. It becomes a one-stop shop for the home builder to get all his needs, and our interest obviously remains why to service the customer as also to increase the throughput of our sales.

Thank you.

And one question I had was on the inland waterways that you used, the national waterway you used for the grinding in Parthali Putra.

So is there any plan to ramp up the capacity?

And if we do ramp up, how much logistic crops can we look at? So it's too early. I think we will definitely want to ramp it up. It is eco-friendly, cost-effective. a high volume opportunity, it will be definitely of big benefit. So this was more of a test run? Yes, please.

Okay, thank you.

Thank you. And, you know, there were a couple of questions asked about how much have we completed on our efficiency improvement program and the reason I'm not able to comment on that because Quarter to quarter, it will vary. The monsoon quarter is a depressed quarter. January, March will throw up another number, and hence it is better to look at the efficiency improvement program deliveries at the end of the year. Having said that, we have already quantified the lead distance. The implementation of renewable energy and implementation of WHRS, which are very, very measurable and, you know, from 400 that we started and we reached 377, 23 kilometers, 23 kilometers is almost 60 bucks. It's 70, 20, 23 kilometers is almost 70 rupees per benefit which is available as part of the efficiency program. Similarly, WHRS implementations on the increase in the capacity of WHRS, the power cost keeps dropping by almost 90% on the incremental capacity. These are measurable numbers, but I would still want to reserve my comments for the end of the year. Thank you so much.

Thank you. Ladies and gentlemen, we'll take that as the last question for today. On behalf of Ultratex Women Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.