Ultratech Cement S/Gdr

Ladies and gentlemen, good day and welcome to the Ultra Tech Summit Limited Q1 FY26 Earnings Conference Call. As a reminder, all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Atul Daga, Chief Financial Officer of the company. Thank you, and over to you, sir.

Thank you so much, Ayo. Good morning, good afternoon and good evening to everyone and welcome to our Q1 fiscal 26 earnings call. Let me straight away dive into burning issues with demand. We believe that the markets have been steady to say the least. Fundamentally, the government spends on roads continues with announcements of some new projects and push for expediting land acquisitions. The government traffic program has shown a marked improvement in the first two months of this quarter on the low base of April 8, 2014. We are seeing rising state government spends statewide Bihar, Andhra, Gujarat, Maharashtra are doing much better than the other states YOY. The country has already built 2,108 kilometers of highways in the first quarter of the current financial year, marking an 8.9% increase YOY. Mega projects like Vadawan Port, some dams, Maharashtra-Shaktipeet, Shaktipeet Expressway, the 802-kilometre expressway between Maharashtra and South Konkan are starting off. On a full year basis, we believe that the government CAPEX will generate a good growth marked by a low base of 525. This should be, all in all, very good for cement demand. Diving into my focus, our current quarter in the report. Actually, we have got used to double-digit growth till fiscal 24, year after year, quarter after quarter, and anything less seems to be slow. Consolidated ultratech cement has grown at 9.7% YOY, including KSORAM in both the periods, though for all engine purposes, Kesaram cement business got consolidated with us or we started managing the operations effectively from 1st of March 2025 it's been just 4 months but as per the NCLT scheme we have consolidated the financials of Kesaram in the last reported quarter which is April, June 24 also has been recast to include it in our results of Weather gods, as usual, have been generous this quarter, giving the country a relief from the heat waves, but the heat waves caused a lot of turmoil in the initial part of the quarter. The monsoons now having spread across the country will be good for the rural markets. Rural markets continue to be doing this hands-on and we expect them to grow favorably in the future months and future quarters. Urban housing, as per some ITC reports, first half of the calendar has been slow, but the number of deals being signed up, land purchases already registered, and transactions being undertaken clearly speak about a rebound which should be visible in the future quarters in the development market. The redevelopment market remains strong for Mumbai and Pune and we are seeing continuous launches of new projects. These new projects which get launched would see cement consumption commencing only after 12 months to 18 months of their launch. This is very important to mention because Mumbai as a city might be close to 3% of all India's cement demand. One more important point that I want to make at this juncture. We had stated during the last quarter, and this is just anecdotal, we have stated in the last quarter that cement demand in the country was around 4% for January, March 25, and there were talks and reports of the growth being actually 6.5 to 7% from various quarters. Well, I admit I was wrong because Considering the performance of 90% of the installed capacity of 655 million tons in the country, Q4-25 was not 4%, but 4.3% growth. This is just to set the record straight about Ultratech and its analysis of the cement market. I want to talk about India Cements now, the company that we are acquired on, concluded the transaction on 25th of December, 2024, it's been six months or two quarters that we have been in charge of that company and the companies on our recovery path, going and working to the plan. The team has done a full assessment, as mentioned earlier, and we will be undertaking a case plan for efficiency improvement, efficiency and productivity improvement going forward. Most of these projects will have an attractive payback period and will generate positive returns. Projects would include WHRS speed or modification, cooler upgrades, alternate fuel technologies, to name just a few. Today, the cost of production is higher than average, but fiscal 28 will see substantial improvements in operating costs as we complete the KFIX program. We are increasing the renewable energy quotient with 219 megawatts of WHRS and, sorry, 21 megawatts of WHRS and 219 megawatts of renewable energy, thus taking the green power quotient for India's cement from 3% to 86% of their power requirement in fiscal 28, helping us reduce its carbon footprint. The CAPEX program, the details of which we will definitely share in the next quarter, will be all funded with debt and internal accruals and we expect to reach a debt level of under 50 crores by the end of the program. And thus reaching almost a net debt positive, net cash on the balance sheet. Fuel costs, as you have always been tracking, have been in control, which will also help the India Cement, the operations of India Cement. This performance of India Cement, which recorded about operating EBITDA of 400 rupees per ton, was after taking into account the introduction of line zone royalty of 150 rupees per metric ton in the state of Tamil Nadu. we are rapidly integrating the operations of India Cements with that of Ultratech, getting the advantage of brand Ultratech as we move along, and we are confident of reaching an EBITDA per metric turn in excess of thousand rupees by fiscal 20 at all. Yeah. Beyond that, we have already started integrating the, we are nearly, completing the integration of Kesaran assets, which have blended in very smoothly with our operations and are on a course for capacity expansion in terms of capacity utilization and improving their efficiency further with WHRS installation. Costs have had some impact. There were global price volatilities. Fuel costs have been higher. In fact, they went up. Petco prices consumed during the quarter were slightly higher as compared to previous periods, which is reflected in the overall fuel cost. Other than that, there is nothing much that we are concerned about. In conclusion, I would like to reiterate that alphatex cement continues to be well positioned in the Indian cement market. Our strategic investments in new capacities, cost optimization initiatives, and commitment to green technologies position us for continued growth in a competitive environment. We believe our results this quarter demonstrate our ability to adapt to the changing market scenario whilst we deliver on our financial commitments. I'd like to thank all of you for joining us today and look forward to taking your questions now. Thank you so much.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and 1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Rahul Gupta from Morgan Stanley. Please go ahead.

Hi, thank you for taking my question. First of all, congratulations on a very good set of numbers. I have two related questions Patul sir. First, we have seen India semen numbers improving at a fast pace over the past two quarters. Now I understand semen pricing was supportive in first quarter, but is there a case that operating performance for both KSORAM and India Seed Bench run faster than your earlier guidance of blocking thousand rupees per ton by fiscal 25th and 28th respectively?

It could happen, you know, pricing as such, nobody has a control. As of now, the prices, as of now, the prices are favorably poised in spite of, in spite of monsoon, heavy monsoon, the prices have not taken a beating yet. Or they hold, I've seen prices improving in July also over the exit quarter. So, prices holding up obviously could go back, could go back, you know, could help us achieve our targets earlier. But besides prices, most important is the integration effort and there are a lot that happens in an integration effort. It's not just pricing, it's right from people, processes, product, quality, logistics, everything is getting integrated which helps us realize our goals.

Got it. Now, my related question is, I understand south price hikes sustained month after month during the quarter. Now, this was also on back of multiple months of unsustainable weak pricing in the region and second, demand was pretty good in the region during the quarter. Now, my question is how should we look south from here? I mean, should this continue or is there elevated competitive landscape can bring back what we saw last year? How should we look the entire region? What's your view on this? Thank you.

So, you want to look south, go north. Don't go southwards. That's in a lighter way. But our sense is that the south market is getting consolidated. are in good shape. So we should not feel any negative pressure as of now. Luckily, you know, there are mega projects which are happening in the southern states. If I look at the markets, commercial markets for data centers, offices, warehousing, everything is adding up. So it should be good. Let me request Dhawanji to add his thoughts.

Just to further add upon what Atul said because one is the south prices were so low actually so the entire industry suffered very badly in last one year. So that's number one. Number two I think there is a good trigger on the demand side particularly the change of state leadership in Andhra Pradesh where the Now, again, new capital is being planned and lot of infrastructure projects have been announced. Even in the Telangana, which is still not up to the mark actually, but there are good green foods there, they will also pick up. So, and the Tamil Nadu is also going for election after some time. So, I think south in terms of demand should do well. And if the demand is good, hopefully, yeah, so south could be a new north.

We look forward to it, sir. All the best. Thank you so much. No, sir.

Anything else, sir?

No, I am good. Not much in the results.

Huh? There is so much in the results, sir. I would feel good in my results.

No, my point is that your voting number could be good. Alright. Thanks, sir. Thank you.

Thank you. The next question is from Rashi Chopra from City Group. Please go ahead.

Thank you. Just a question on the realisation that 2.2% increase, have you seen it sequentially? Is that, when you say it's an alternate brand, that includes KSORAM as well?

No, that's at alternate level. Because KSORAM still has its own brand state and we are migrating. India Cement also has its own brand. Of course, India Cement is not included in this number. But This is speaking about Ultratech as a brand. And that's what I've highlighted on the slide also.

So, if we were to, I mean, if you could give us a standalone realization as an Ultratech Plus case, so I'm not India Sunom, but Ultratech Plus case, and what is that differential sequentially?

You know, considering the volume, Rashi, it might be a 0.1% or so lower. That's it. Because the size of the... Size is very less. Very small, sorry.

Understood.

So, it will be 2.3% and not beyond that.

Okay. Got it. All right. And possible to share the building product number for 1Q last year? Revenue?

One second. If I have it readily. So, I don't have it readily. I will announce it. Around 185 crores. Ankit tells me that.

And lastly, what was the capex during this quarter?

It has been around 2000 crores, you know, generally that's been the run rate every quarter. So, I don't remember the exact number, but it should be around that level only.

Okay. And this is not, I mean, this doesn't include what you're planning to send to India Cement. Oh, you have sent it.

No, no. So, India Cement will fund its own capex. Got it.

Okay. Thank you.

Thanks, Ash.

Thank you. Next question is from Amit Murabha from Access Capital. Please go ahead.

Hi, good evening. Thanks for the opportunity and congratulations on a great result. Just firstly on the brownfield expansions, so you will be reaching 211, 12 million tons and I believe that's going to happen in like 15 minutes, 15 to 18 months of time. One is like how much more brownfield expansion scope is already there in the portfolio, in the expanded portfolio and by then can we expect the next round of expansion to be taken up.

Amit, I think I must have told you also that we are, the blueprint for the next phase of growth is getting fixed and ready. We will present it to our board and before the end of this calendar or worst case, before the end of this financial year, we will come back with the next phase of organic growth. You will have to wait for that. Let's remember you also.

Yeah. So, fundamentally, as you said rightly, I can only say that the Alta Tech would continue to partner in the growth story of the country. So, we all know the demand is going anything between 5 to 7 percent, 8 percent. So, obviously, Alta Tech would like to partner in that growth journey. And that is where we have to, as Atul said, we have to plan out our growth journey on a regular basis.

So, Amit, you've got the answer. If industry is growing at 5, 7 percent, we will not get left behind as to be able to support the growth of the economy and the industry. I've been going around. There are enough opportunities for us for doing brownfield and greenfield opportunities are also coming up. This will be our fourth phase of growth that we'll be announcing. There will be a fifth phase of growth, which the team has started working now, which will come up at an opportune time.

That's great to hear. And also on the rebranding strategy for Kesuram India Cements, is there some tolling happening between India Cements and Ultratech? Yes, please.

So the way we are dealing with it, whatever output is getting converted into Ultratech brand and the prices that Ultratech is able to realize on that, everything is passed on to India Cements. except for a small margin which takes care of the marketing expense which Ultratech incurs, which is roughly Rs. 10 a bag or Rs. 200 a ton. And if I were to account that component in India Ferments P&L, the reported Rs. 400 per ton would actually be Rs. 458 per ton.

So you mean to say that the volume that you are selling the Ultratech name, that benefit is also being passed on to investment channels?

Yes, absolutely. And KSRM, there is no... pricing because KSORAM sits as part of Ultratech TNF. There is no differential.

Right. Any volumes you could provide like how much is Coromandel brand and how much would be Ultratech coming out of India?

So actually we are wrapped. I wouldn't want you guys to your mind getting diverted with quarterly numbers because month after month the volumes are ramping up and we should be able to conclude that the grant transition program before the end of fiscal year we should be able to complete 100%.

Thank you.

Thank you. The next question is from Prateek Kumar from Jefferies.

Please go ahead. Thank you. My first question is on pricing. You said 2.5% increase in pricing. I guess is it largely Related to south and all, how are the other regions?

South and east, which had trailed behind, took the maximum advantage or maximum gain, followed by north and west.

Okay.

Sir, it's funny, sir. No, no, no. Sorry, I paused you in between. Please go ahead with your point.

I was saying that in July also you said like prices are slightly higher. So how are that region-wise?

I would say east continues to rise. And I have seen increases in other markets except north. North and west we have not seen any increases because they are already very well priced. Other markets are seeing very small increases.

Okay. Fine. Is it possible to give out Chesuram volumes in the base so that we can adjust our quarterly base of volumes?

1.58 million times was Q1 fiscal 24. Fiscal 25, sorry, my bad.

No, I mean quarterly, like for next two quarters also, because you'll be giving the without.

Yeah, understood. Karthik, I'll ask Ankit to give it to you offline. I don't have it readily. You want each quarter break up, na? Yes, yes. Okay.

Okay, I have more questions. I'll get back to you.

Sure. Next question, please. Yes. The next question is from Pulpit Patni from Goldman Sachs. Please go ahead.

Sir, thank you. Thank you for taking my question. Sir, mine is also a bookkeeping question. If you could just break down the volume a little clearer. So, 2.18 million is India's cement and 32.46 is the rest of it. Now, within this, what is Alphatec and what is Kesaram if you could help us split that?

34.64 is including India's cement. India's cement was 2.18. Now, project splitting is very difficult because we go on market basis and markets could be operating from various plants. So, it's next to impossible because, you know, when we have multiple plants in the same market, for example, Kesaram's Sarlanagar plant and our Rajasthi Cement plant both are in Karnataka. They supply to Karnataka, they supply to Maharashtra and various other markets becomes little difficult for us to segregate. I request Jammuji to add further.

No, I think it has been explained very well. I have nothing to add. Because it's a question of the overall optimization of AltaTech, the product optimization, cost optimization, the market optimization, and at the time the customer optimization. So, we don't look now as a separate unit or a separate company. The entire focus is on Fundamentally, the integrated approach is what makes sense for the company. That's why at times if some plant is inefficient, we don't operate plant to that extent.

Sir, I fully appreciate that. What I am trying to come to is what is the kind of annual volume growth that we are looking at given the base exchange is making a little difficult for us to be able to calculate it. which is why a base number would help. But if not, if you could give us a sense of what's the annual volume growth approximately that you are looking at?

We would target a double-digit growth given the fact that we have got new capacities into our fold. We would be commissioning, we have already commissioned 3.5 million tons this quarter. We'll get stabilized by the time we reach January, March. we'll have further close to 10 million times further. In our capacity, close to 10 million times further we'll get commissioned as we move along. But on the base of fiscal 2025, we'll do a double-digit growth definitely.

Sure. So, my second question is,

is on your finance cost again at the console level has come down meaningfully is there scope for that to come down more has the interest rate been reset across the board how should we look at that also so there is one more reset which has already which has last announcement has not yet come in the last RDI rate cut which happened has not yet come in and I believe there could be one or two more rate cuts within the Indian interest rates which will benefit us

Sure.

By average cost of borrowing would be 7%. 7% for the previous quarter. Yeah. For the previous quarter was 7%. It will come down as, this 7% will come down with the rate cuts which have already been announced and further, if at all anything happens.

Sure, sir. Thank you.

So, we have also been able to reprice, refinance, India cement borrowings also, they are also getting rated AAA. with more or less the same kind of rate.

Same rate. Sure, sir. Saw that. Thank you so much.

Thank you. Thank you. Next question is from Ashish Jain from Macquarie. Please go ahead. Hi, sir. Good evening.

Sir, personalization, double digit growth you spoke about in fiscal 26. Is it with Kesaram in the base or that is without Kesaram?

With Kesaram in the base.

Okay. Okay.

we will, Aashi is not very sure, we will grow higher than the industry.

No, there is no doubt on that. Because KSRM can make a big difference to that.

Yeah, yeah. But not really. Aashi, it's not really because KSRM is 14 million tons and out of our 180 today? 180. Out of 180, 6 million tons, it's less than 8 or 9% of our total capacity. will not make too much of an impact. We will still be able to grow. Okay. And the move point is to make an investment. So, it will generate return. Yeah. Sorry. Go ahead. Yeah.

Sir, secondly, you know, just on capacity, I have two questions. One is, you know, when we, you know, if I go back three, four years, when you first spoke about this 200 million ton target by 2030, if I remember right, now we have achieved that or we will achieve it much, much ahead of 2030. So, how... How, you know, would you be able to put a number to, you know, capacities that we can think, let's say, the following three, four, five years? Because at some point of time, shall we start thinking that there's enough capacity in the industry and that can reflect in our expansion?

Actually, let me give you a bigger picture answer. All of us know India requires a lot of growth. A lot of cement is required as yet. We are... while we call ourselves fourth largest economy, but look at Japan's infrastructure and look at our infrastructure and everything else that is around infrastructure. There's huge amount of growth potential. And I think next 10, 15 years, and I request, once I say I request, Jammuji also to give his input. But there is a long way that India will keep seeing growth. And as long as India keeps seeing growth, I don't have a number. But we will grow in line with India's growth requirements of cement. Yes, we might reach a saturation point in the distant future.

Yes.

I'm very sorry to interrupt. I just want to add one more point. Because we have heard this for many, many years and some of it has played out also in terms of growth. But then, you know, I'm just wondering to understand why cement growth is so volatile. Let's say even 4Q, if it was 4.3% growth, why are we not seeing that prolonged period of high single digit growth or let's say 7-8% growth at least?

So, Ashish, we can have a long discussion offline and to understand what happens in the industry. But there are multiple factors. Last year what happened and year before last year, fiscal 24, we saw double digit growth after COVID-19. Coming out of COVID, industry saw double-digit growth year after year. Fiscal 25 had its own challenges. If I recall, Fiscal 17 had its own challenges because GST was introduced or something, then RERA was introduced. So, there have been structural changes in the economy which have had their share of impact on demand. But structurally, as you see, the number of kilometers of roads that need to be done in India is humongous and once the infrastructure growth comes the big incentive is all around the development of newer town cities social infrastructure you know commercial spaces etc. which will get developed.

That's what I was about to say Fundamentally, even if you see the demand model or the growth model in any country actually, once the infrastructure, the first feature is infrastructure growth actually. And once the infrastructure growth happens, then the, as Atul said, just now the housing, social interest in new cities coming. there will be lot of migration of people moving from cities to the suburb and the distant places because the infrastructure becomes very efficient for commuting from one place to another. So, we believe it is going to follow at some point of time once we reach reasonably good infrastructure. Number two, because as just now I said and I will also explain, we are very clear that the country has a huge potential for the overall economy to grow and the cement is a basic building block. So we would definitely like to partner in this growth journey. And I don't see personally at least this growth is going to taper down at least in next one decade actually. Nobody knows how. And you must have seen that recently the day before yesterday when our road and surface ministry, Mr. Varkari also said that now we are targeting 100 km per day rather than 35. Yes, we have challenges in the country in terms of land acquisition, flow award of contacts, education and so on. But I think government is conscious about it and speeding up the all infrastructure projects and so on.

So, huge potential. Let me delve into one project example, Vadavanport. It's 300 million ton cargo handling capacity. Do you know what is the peak cargo handling by JNPT? Less than 100 million tons. Somewhere around that is done the data. Just imagine it's a 76 billion for getting the value of the project, huge project. while it consumes cement, but the ancillary industry growth that takes place, the employment opportunities, the increase in housing income that takes place, opens up the floodgates of growth for companies like us. And there are going to be several such projects in the country. I think we will be busy producing and selling cement. Okay.

I just have one last question on power, on... Will we see further increase or we are fine?

No, I think we will see declines now. This is one element which we don't have a control on. Some global event takes place and prices go higher which will impact consumption going forward. As of now, as you have mentioned, range bound or it should not go up. Let me put it this way. Okay, okay. Thank you so much. Thanks, Ashish.

Hey, I can't hear you. Hello. Hi, Ritesh. Hi, Ritesh. Yeah, hi. A couple of questions. Sir, first is, does... You didn't like my performance. I remember. So, that's pretty much in line. So, thanks for that. Sir, couple of questions. First is intercompany elimination has been mentioned by Vadyo and Vadyo. How should we read into this and how should we look at this number going forward?

So, intercompany elimination is between Alphatec and ISM now, right? Or?

I don't see it.

Sorry, this is between like cement which is supplied to our own captive consumption for RMC. This is going to be part of life. But on a 20,000 crore of revenue, this quarter is about 500 crores. On a current scale of operation, you can factor in a 500 crore number because we are growing our RMCs, we are growing our BPD, the confession chemicals.

we are growing organically on our projects where we consume our own cement so that elimination has to be done okay so my second question is you did indicate on pricing trends but wouldn't it be possible for you to give some color on the trade and non-trade price gap specifically in south given what you understand that the price increases on the non-trade side have been significantly I always I always ask you guys to help me with this information you know it better than I do Okay. Sir, I'll move to the third question. Sir, how should one link Birla Pivot to Ultratech? How are the linkages between the two entities? And does Ultratech benefit out of Birla Pivot by any means? No, not really.

Not really, only it's sometimes, sometimes if they use our network at times, then it's, yeah.

They have taken over the business. Yes. So, cement, cement on our product, any other product that we manufacture under our building product division, we deal with it directly. They are selling any other product. Directly. Directly.

Okay. Is there any update on buyers and stables?

Major orders have already been placed. Long lead items. People have started joining. Land lease is being finalized. They are looking at some locations in Gujarat. And last I checked, we are on track. We will remain within our CAPEX plan of 1800 crores. We might have some savings only on that CAPEX plan.

Sure. And sir, just last one question. Sir, any specific plans you would like to lay out on R&C given competition is actually moving quite quickly? I'm referring to the unlisted player who is there in the marketplace.

As my late chairman once said, Mr. Aditya Pabla, we are not afraid of the competition. Let the competition be afraid of us. So, that's a very serious statement. And I think... We are focused on our growth. We know that RMC will keep growing. We are already now five, how many plants now? We have crossed 400 mark this year. We keep growing. And Ritesh, you know that they are all margin accruative, which means over and above the EBITDA they generate a contribution.

Sure. Thank you so much for the answer. Thank you.

Thank you. Reo, we can't hear you at all. I don't know where your phone is. Please adjust your mic, Reo.

Thank you for the opportunity. My question was on demand. So if I adjust to the volumes of India's demand, I think organically our volume growth is just 2%. And I believe architect grows much higher than the industry. So just wanted to understand, is it that the growth has been... Go ahead, go ahead. Sorry. Yeah, so my question is, is this observation correct in the first place? And if the industry is nearly flattish in Q1, we are into monsoon season, so then what gives the confidence of a 7-8% growth for the full year? Thanks.

So, Naveen, let me answer the second part of the question first. More than 40% of, 40-45% of demand for cement in the country is in the last quarter. January, March is the biggest quarter. Second point to make is cement is very, very seasonal in India. The real season for cement starts post festivals, post Diwali, then post Diwali actually. So when labor starts returning. So it is effectively, I don't remember when is Diwali this year, but let's say post middle of November till the heat wave starts setting in, The real season is November to April or May. That is the real season for our cement. I believe, yes, we will grow much rapidly in the subsequent quarters. As to your point on some numbers that you were looking at, I don't think so that's a number. And Phulkit had asked me this question on the call. I don't have the ability to split hair between what is K2R sales because now it's all part of our system integrated. There's one billing mechanism excluding ICL.

Simple arithmetic. I don't see a reason of any confusion actually. It's a very simple arithmetic. From a domestic volume I simply reduce engagement and to larger domestic volume I simply add K2R. That's a 2% growth that I'm getting.

No. Firstly, I don't like your aggressive tone. Secondly, the way to look at is if I look at Ultratech brand, because as I mentioned, we have been rapidly rebranding Ultratech, which has grown 6.5%. So I know there will be some amount of jigsaw puzzle in our sales mix because what we will focus on is Ultratech brand sale, which has actually grown 6.5%. Whichever way you want to cut it, that's the real number.

Yeah, I think because the entire focus is on the sale sometime, it depends on which plant is more accretive in terms of the delivery cost and where the dispensers are to be made. So it is really difficult to differentiate actually the plant-wise kind of thing. But the brand has grown by 6.5%.

Great, great. And if I may just ask the second question, lead distance is like, you know, very happy to see a lead distance reduction from 384 in the previous quarter to 370, as we say. So, but I'm just trying to see the savings in actual numbers. In the sense, 14 kilometers of sequential savings, even if I assume a ballpark 3 rupees, like, you know, per ton per kilometer, even then that's almost over 40 rupees per ton of sequential saving. Is that, I'm not... able to see that in the numbers. Am I missing anything here?

Thanks. What is missing?

You know, when we, in our graph that we show you, 1182 to 1158, this is a 24 rupees sharing which is visible. My accounting might not be as aligned and linear with the costing that's the only answer I would have but the fact is yes the lead distance has gone down and if I do the math of PTPK it should reflect but besides the lead distance there are lots of other costs which are attached let's say a handling cost warehousing cost everything would get added in my logistics cost forwarding cost agents involved so there will be lots of other elements of cost involved So, Naveen, I don't think mathematically it will stack up. You will have a 40 rupee benefit. Then there's a railroad, Jamaji rightly pointed out, there's a railroad mix also. Rail is 40% lower than road cost. Lots of moving parts to this. And as I said, quarter on quarter, last time also I mentioned and we disclosed transparently our savings due to all these efforts. At the end of the year, Naveen, we will definitely show the outcome. Quarter to quarter, next quarter you never know if the lead might go up. It's not necessary. C70 could become C71, C72 or it could fall further. My hunch is it will fall further because as the network of number of plants is increasing, our lead distance will come down.

Thank you. The next question is from Satyajit Jain from Ambit Capital. Please go ahead.

Hi, thank you. This was like a first question on India cement and then second was UBS. See, India cement, I just wanted to understand, I think you mentioned that adjusted for marketing spend, maybe adjusted EBITDA was 458 rupees per ton. Lastly, you mentioned southern plants, typically for ultra-tight, would be lower EBITDA per ton given lower pricing historically. Given where pricing is, I just want to understand the profitability gap between India Cement and rest of ultratech plants in south maybe ballpark direction and how do you plan to bridge that gap if you have pre-heater WHRS how would maybe just some ballpark direction so you know yeah so there are two ways this is a good question I think

The Ultratech brand being generated from ICL plants gets the same price, barring the 10 rupee which I am keeping in Ultratech. Cost of production of that output might still be higher because of the inefficiencies that exist. And as we progress, fiscal 28, the cost also will get aligned. prices will also be aligned. We will have parity between the profitability of ICL plants or Ultratech existing cement plants in the southern markets.

So, as far as the cost side is concerned, once we carry out this CapEx plan actually and once it is completed, then compared to the Ultratech, I would say it would be almost near to the Ultratech level compared to some structural differences at the plant to plant level because even despite the modification you may not able to reach at an alpha take level plants because there are some plants are alpha take are the most modern and recently constructed plants. But I think we would be by and large it would be very well aligned with alpha take. and not a very different year we should have anybody. That's what I think.

So, certainly, we'll start KFIX work. We'll announce it next quarter. We have not yet completed the program. Next quarter, we start, which is middle of 25, 26, and 27 end, we will hopefully complete. And first quarter of 28, April, June 27th, you will start seeing the benefits in the P&L of ITL.

The reason why I am asking this is twofold. One, these are old assets, so I understand these are all integrated. There is no concept of grid grinding generally. And also, in southern countries, part of Taylor SEC Coromantur brand is so strong. I am not sure if it is possible to completely go with Ultratech given the strong recall there. So, given all these, you think 100% of branding can move to Ultratech and given the asset base expense that the way it was structured earlier with all these three heaters in WSRS, you can achieve almost parity with Ultratech on all these efficiencies.

Yes, yes, yes. Let me give you the flavor we have done already the deep dye actually putting number of people, teams, etc. Identified plant by plant, line by line what modifications are to be done and this modification will take us to at what level in terms of heat consumption, power consumption and that is why with the confidence or with the comfort I am saying we would be in the ballpark number of about at least 90% because we don't have the system practically anywhere except one plant and so on. We don't have the ultimate fuel usage actually. We need to optimize in terms of to improve the heat efficiency and so on. So I don't think there is any, if I may say honestly, it's any worry to bring those plants in the range of Baltate, not at the 100% at the level of Baltate. But it's a matter of only time it may take another one and a half year to make the two years time.

So certainly two more points to address. You mentioned the strength of the existing brand of ice there in deep down south. We will evaluate and as I said that's why we have kept time in hand to do the integration of our brand. If required, that will continue. If the markets convert, it will transition into Ultratech. Its jury is still out. Second point, you mentioned about strip grinding units that they don't have as compared to the way the Ultratech network is operating. But the way we work, it's on a total delivered cost. We have our own network of grinding units from architect which will be able to share their capacities because ultimately we work on a total delivered cost basis that is the and that is why you know again going back to the questions which were raised earlier on the call beyond the point it becomes difficult for us to split here but Just because we are operating at total delivered cost, you know, by the end of fiscal 27, take a guess, we will be having a network of physically 82 plant locations in the country and rising. South itself, we will be about 60 million tons and growing with multiple facilities. So we'll be able to capitalize on our existing network also. Hope that helps.

Thanks. Thank you. Before we take the next question, a reminder to participants, so please limit your questions to two per participant. The next question is from Chintan Shah from JM Financial. Please go ahead.

Hi, thank you so much for the opportunity. So, I have three quick questions and all three on India Cement. So, first of all, is this the clarification of what you mentioned? So, basically, the ultradic rebranding from India Cement, that will be sold to the ultradic entity and all of that will retain around 10 to go back on 200 for 10 years. And this stuff it will be retaining decimals. That's correct. Okay. Okay. And second and the third one are more strategic. So, first one, what is the end plan with respect to India cement? I mean, considering the synergies and integration, would we at some point looking to, you know, merge this with Alta Tech or do we open the keeping it as a separate entity? And what could be the rationale if we want to create a separate entity? That's the second question.

The third one is... Let me take a second question. So as of now, we don't know which side we will move. First and foremost, it's very important for us to clean up the India Cements operations, bring it up to speed, which is the turnaround of the company, bring it up to speed, align people, processes, products, as I mentioned earlier. And then we will take a call on whether to merge or not to merge. we are fully cognizant of a huge amount of scam duty that would be involved. Why spend money on that? But if it's worthwhile, perhaps in 27 or 28, actually, we will revisit the decision. As of now, it will continue as a separate entity.

Got it. And this is very clear. And Karan, the last question is, I mean, in terms of capital allocation, Capex, as you highlighted, right now we're focusing on WHRS and AFR, but would there be a consideration or a scope of, you know, de-organizing or brownfield or any sort of expansion in India cement?

There exist opportunities for brownfield expansion in India cements also. And as I mentioned earlier, We are now getting ready for our phase 4 of growth of TFX. Phase 5 will also be there where we will see downfield opportunities of India Cement location getting tapped.

Got it. Perfect. That's very clear answers on my question. Thank you so much.

Thank you. Thank you. Next question is from Shravan Shah from Donut Capital. Please go ahead.

Hi, thank you, sir. Just to clarify, sir, when we say we will grow 10% volume growth in S526, this is on 135.8 million tons. That's what we have done at console level in S525. Yeah, okay. Yes, please. Yeah, so I'm just trying to clarify. On that, we are saying a 10% growth. So that means including the investment also where maybe we will be doing close to 9.5 million tons. So if I remove that, then maybe a 3 to 4% kind of a growth would be there if I take a 10% growth. If you wanted to do a math check and do that separately, I'm not doing a math right now. Okay, got it. Second, sir, in terms of the cost reduction, what we have talked about last time, 300 odd rupees, 85, 86, we have done 25. So that remains intact. By 27, we will be seeing another 200, 250. I don't know how much. Whatever we are able to achieve, we will report it. Because as somebody just picked up, logistics cost is coming down. Nobody has asked me or complimented me on the way clinker conversion factor has gone up. Can you imagine the amount of gain which the operations have now with a clinker conversion factor of 1.49? It's jumped from 1.44 last quarter. So there are lots of efforts, sir, which are happening and which we will report at the end of the year. Month to month, day to day, quarter to quarter, it's next to impossible to measure.

True, true, true.

Sir, lastly on the CapEx, is it possible for FI 26 and 27?

We have close to 10,000 crores this year. We will come back for the next year CapEx in new course. Thank you.

Thank you. The next question is from Rashi Chopra from City Group. Please go ahead.

Thank you. Sorry, just following up.

You were still there, Rashi. I thought you wouldn't be there.

No, just following up on the previous question. One is, I don't know if I missed this, but did you give the industry growth number for this quarter? Last quarter you said was 4%.

No, no, I didn't give it. I didn't give it.

So what is it? I mean, what in your estimate would be the growth?

We'll discuss it tomorrow, Rashi.

Okay. That is one. Second is this tolling, you know, this tolling arrangement that you have with India Cements. Is there, so when I am trying to look at the India EBITDA per term that is basically standalone plus ultra tech, is there any sort of intercompany elimination that I need to take?

Between, including India Cement Corporation. Is that what you are looking at?

I will put it, I will ask you differently. Like last quarter, the India EBITDA per term was 1175 in the fourth quarter. Is that number 1230 now in this quarter?

What is 1175? With India Cement Corporation. So that will be 1200 bucks. so just one second how much is it India EBITDA India EBITDA not India EBITDA per ton I will give it to you if not on the call then later on immediately ok ok no problem thank you thank you thank you very much we take that as the last question on behalf of UltraDexterment Limited that concludes the conference thank you for joining us ladies and gentlemen given our disconnection actually thank you