Ultratech Cement S/Gdr

Ladies and gentlemen, good evening and welcome to the Ultratech Cement Limited Q3 FY26 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the lesson only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star 10-0 on your touchstone phone. Please note that this call is being recorded. I now hand the conference over to Mr. Atul Dhaka, business head and CFO of Ultratech Cement Limited. Thank you, Anuvat Yusuf.

Thank you so much. Good evening, good afternoon, ladies and gentlemen. Once again, a very warm welcome to yet another call on a Saturday evening for Alta Tech for the third quarter results of 26. Before I begin, let me assure you, we will not make this as a habit of spoiling your Saturdays. But this Saturday is worth spending time. Let me get on to the main core topic for discussion which I have in mind today. Demand. That is the most important aspect for our business. Everything else becomes secondary and falls in line. And as we see the progress, government's focus on infrastructure is translating into a robust pipeline of new projects nationwide. with several market investments announced across every region, translating into solid demand. You must have all read about it in the media at different points in time, but let me put a perspective together in one place, region by region. In the north, Punjab is taking extensive road development initiatives, spending about 15,000 crore in its markets, New corridors have been announced in Delhi Metro for about 12,000 crores. Uttar Pradesh is developing 1,575 kilometers metro network across major cities. Of course, that goes till 2047. It's a long horizon, multi-city infrastructure pipeline, indicating sustained demand and significant opportunities for cement highway projects. continued investment in road connectivity and logistics corridors across the state, like the four-lane green field highway project between a place called Barabanki and Mustafaabad. Let's go to West India. Maharashtra is seeing a significant pipeline of large transport and mobility projects, signaling strong multi-year demand for cement and construction materials. Mega projects like the Uttan Viraj ceiling, about 58,000 crores, Mumbai Metro expansions, Pune Metro multiple lines, and road concretization in Mumbai. Center's clearance of Pune, Chhatrapati, Sambhaji Nagar Expressway Highway, spanning 245 kilometers. The particular focus on improving connectivity for rural communities. Nearly 350 kilometers of state highways, 2,577 kilometers of rural roads, slum rehabilitation initiatives, all of these are going to boost urban cement demand. Expressways and ring roads, Nashik, Wadawan, Bandara, Gadchiroli, etc. add to further boost for demand. Gujarat's nine high-speed corridors covering about 800 kilometers are fast-tracking connectivity. and will add further. Cabinet has approved two major highway projects worth 20,000 crore plus, Nashik-Sola course, and one more, signaling continued momentum in India's integrated high-speed connectivity push under the PM Gadi Shakti. Stepping down into South India, Bangalore is undergoing a major mobility transformation, The metro network set to expand from 96 kilometers to 175 kilometers by the end of December 27. Karnataka government has unveiled an urban infrastructure program which will have longest 40-kilometer twin tunnel, a 41-kilometer double-decker metro, 110-kilometer elevated corridors. Center has approved 10,000-grid expansion of four key highways measuring about 273 kilometers, which will improve connectivity across Telangana. New Mangalore port has announced capacity expansion to handle 100 million tons by 2047. We can't forget the eastern corridor. West Bengal has its own challenges, but is planning largest road initiatives, about 8,487 crores per gram, 15,000 kilometers of rural roads, 5,019 kilometers of urban roads. All this just goes to say that India is developing very fast. Bihar is rolling out three major Ganga road projects worth 70,000 crores. Digha, Shaipur, Bhita, Koliwar, 35 kilometers. Munger, 42. Sultanganj, Bhagalpur, 41. So I'm not advocating or speaking on behalf of NHAI, but this is what the story is surfacing. Chhattisgarh. Chhattisgarh, center is approved, 774 kilometers, roads covering 2,000 plus kilometers under the PMG SY4. The state has already completed 8,753 roads and bridges are also under the same phase. Media rail expansion across Maharashtra, Chhattisgarh, Gujarat, M.P. reflect the scale and diversity of investment underway. To give you a perspective, roads and highways require approximately 350 to 900 kilometres or 900 tonnes per kilometre. With thousands of kilometers under construction or planned across all regions, this is going to be huge. Elevated metro requires 11,000 metric tons per kilometer. Underground metro requires anywhere between 17,000 to 19,000 metric tons per kilometer. Railways, 90 to 100 metric tons of cement. Ports and airports go up to 50 kgs per person. Housing, if I were to look at low-income housing programs, affordable housing, and rural connectivity projects, sustained steady demand. With a strong project pipeline, demand for cement will remain very continuous and as strong as possible. Infrastructure is seeing the next big wave of growth. What does that imply? More jobs, more demand for housing and social infrastructure, i.e., schools, hospitals, commercial complexes, office at all. We are present across the country. Just to tell you about our RMC network, RMC network is about 163 cities which we are already covering and rapidly expanding. Ultratech is so sweetly positioned to meet the demand like nobody else. We are witnessing growth, unprecedented growth in New areas, new avenues like data centers, GCC, renewable energy projects, you name it and things are happening. As somebody just said, India has arrived. It's the market with a population of over 1.4 billion people, youngest working class, and an opportunity across the land bank for development. At Ultratech, we are fully geared up to capture these opportunities. Our approach remains rooted in disciplined execution, advancing our next phase of capacity expansion while ensuring every investment is backed by rigorous cost control and operational efficiency. In our fourth phase of expansion, last part of orders have already been placed, work has already commenced, and we will be on time. Importantly, we are funding all our growth through internal accruals, maintaining a prudent balance sheet and a healthy leverage profile. This, combined with our pan-India network and deepening retail footprint, positions us to capture incremental demand at a very rapid pace by safeguarding our margins. You would have seen our leverage position this quarter end On a consolidated basis, we are at 1.08x net debt EBITDA. I believe and I'm very confident that we'll reach the mark of 1x and be in .8, .9x net debt EBITDA by the end of this fiscal year. Integration of recent acquisitions is progressing very well with rapid brand transition. ISORAM and India Cement are ahead of the initial plan initial plans with brand conversion at Kesaram having reached 69% in December 25. And today, if we speak, it must have crossed further. India Cements has already crossed 58% at the end of December 25. For both these assets, we have begun our cost improvement CAPEX program, which will result in benefits and will start reflecting in the P&L of January-March 27. At Kesaram, we have already spent 263 crores out of the commitment of about 382 crores. At India Cements, we have committed already 601 crores and spent 144 crores on the program. Talking about CAPEX, the other initiative, Cable and Wires, is progressing as per plan. About 500 crores worth of orders have already been placed. We have spent 197 crores. 30% of the planned team is already on board. Civil work has started, and we are on schedule to see the launch of our product in the October-December 26th quarter, as was committed earlier. Talking about our efficiency improvement program, we continue to deliver solid and measurable results. In fact, now I am very confident that we should be doing better than what we had committed. We shall give an exact quantification in financial impact with the annual results for the year. However, you would have noticed the lead distance has dropped to 363 kilometers. The clinical conversion factor is improved to 1.49. The most important factor, I believe, for us is to have a strong demand pipeline. And you will notice that January, March quarter, God willing, we will operate at more than 90% of our existing installed capacity, clearly demonstrating growth in the trade markets as well as non-trade markets. If the demand is good, everything else falls in line. Ultimately, it is about the bottom line where it comes from doesn't really matter. Quite often everybody is focused on cement prices, which had remained subdued post GST change, September, last week of September, October, November saw some softening prices. But with growing demand, we are witnessing improvement in prices in all segments across the country. There have been cost increases in the cost of pet coke and coal. New labor code will have its own impact, rupee depreciation. All these will have an impact on the cement industry and obviously there is reason to pass on these cost escalation into prices. We are very confident of a very bright future for the next quarter and after that quarter and after that and after that. That doesn't mean I'm restricting myself to a fiscal 27, but the story is far longer. As India embarks on the next decade of development, Alcetec is proud to play a pivotal role in building the nation's future. We remain confident that our strategic initiatives in building capacities across the country in critical market locations, coupled with sectors, positive outlook, we will continue to deliver growth faster than the industry. And we welcome all of you to participate in our journey. Don't miss the bus. Thank you. And 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 touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants, you are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question assembles. The first question is from the line of Amit Kumar Murarka from Access Capital. Please go ahead.

Hi, good evening. Thanks for the opportunity. Congratulations, Mr. Raghav, firstly, for a great result. I don't think anyone expected both volume and a margin rate, actually, which is quite happening to see.

Just on pricing, I wanted to get a sense from you, like there is a lot of industry capacity addition that is going to come through this year.

What do you think industry's stance will be in this kind of a high expansion scenario?

The reason I talk about all the demand footprint and demand new initiatives, I think cement will easily get absorbed. And if the demand remains strong, we will not see any problem in prices.

Okay, understood.

And just also on India Cement, like Q3, I see that the EBITDA per ton was about 400. You had earlier guided for a thousand rupee exit in Q4 2017.

So most of this improvement will be through cost or will there also be some pricing required? I mean, so it was Q4 27, not 26. No, 27 only. I meant 27 only. So what will happen is the brand conversion, which has already taken place, actually had the brand conversion not taken place, the performance would have been not where it is today. balance almost 40 or 45% of brand conversion has to be completed and prices are going up in the southern markets as well. Further, as I called out, the CAPEX program has begun for efficiency improvement. We will have, so we have to have all the players playing the match in a positive manner. Prices, efficiency improvement, and capacity utilization. All of them will deliver as planned. All understood. And lastly, just if you could give the CC ratio for the corridor.

Sorry, what? The cement-clinker ratio, what was it in the quarter?

1.49.

Clinker-cement ratio, no? 1.49. This quarter, 1.49. Okay. That's all for me. Thank you. Yeah.

Thank you. We have the next question from the line of Polkit from Goldman Sachs. Please go ahead.

Sir, thank you for taking my questions. And I echo Amit's views that these are good numbers. And on a lighter note, your opening remarks sounded a lot like the budget speech. But, sir, I don't see the capacity addition plan by plan guidance for Q4 and for the next two years. Just the numbers around how much capacity would be added in Q4, how much in FY27 and FY28, that would be helpful.

So we should have approximately 8 to 9 million tons more coming in this quarter. And the balance, I think, 16, 12 million tons in fiscal 27. And then balance remaining will be in 28. Okay.

Perfect. Thank you so much.

And I'm very much, Kulkit, I'm very well entrenched in the private sector, not emulating anybody. All right? Sure, sure.

Thank you.

Thank you. We have the next question from the line of Jashandeep Singh Chatham from Nomura. Please go ahead.

Yeah, hi. Thank you for the opportunity. And congratulations on a great set of numbers, sir. And I must start by saying that the information and detail that you gave on the project is much better than most of the departments who are actually working on those projects, I must say. So my first question is you have covered most of the demand aspect and in a lot of detail. Just wanted to shift the focus on rural demand. So how has rural demand recovered in third quarter? how are you seeing in the fourth quarter and what are your expectations for the year ahead? And just related to that, any expectations from the budget for the cement sector or anything? Okay, the last question first, I don't know what any, I won't comment on that. That's the easiest answer. Rural demand, I think if you, simple way to look at rural demand is look at our trade ratios. If our trade ratios remain strong, rural demand is equally buoyant. We are not witnessing any depression in rural demand. Q4 also will be solid is what my expectation is. Understood, sir. Thank you so much for this. And sir, on the cost saving front, we have, you know, Intertech has given a target of 300 to 350 rupees per ton over, you know, next couple of years. How is it, I understand it's very difficult to, you know, tell the details quarter by quarter, but if you can give us the sense, you know, how much of this has been realized. and how much of that will be coming in the coming quarters. And also, apart from these three things, I'll forget your questions. Wait, let me address this question first. So, you are asking two things in the same question. First, you are saying it is difficult to quantify, and then you are saying quantify. So, please have mercy. So you will see, no, it's very difficult and it is not logical, Jashandeep, because July-September quarter will be weak, so costs can go up. January-March will show extraordinarily high delivery, so it is best to see the results on an annual basis. Now to give you directions on how things are moving, and we had given our program with item details and with the targets. I recall we had mentioned with a base of 400 kilometers of lead, a 25 kilometer lead reduction, which would have taken us to 375 kilometers. We have already reached 363 kilometers. So it's not only the lead distance which helps, there is a lot of other initiatives which the team is taking which helps to take efficiency improvement. Similarly, we had taken a target of clinical conversion factor of 1.54. We are moving on that direction. In 1.54, we have reached 1.49. So you can see, you can do your own math, but it will be best that we do this math at the end of the year. All I can say is we are moving and... in line with the target set. Last year, full year, we had delivered about, on those quantified measurable targets, we had delivered Rs. 86 per ton. My guess is we should be crossing a Rs. 100 mark on those efficiency improvement programs in this financial year.

I think that's already explained because It's not item I see. We have moved from clinker conversion from 1.45 to 1.49 and we are still away from our target actually. If you talk about the renewal energy, our renewal energy has gone to almost 41% kind of thing. And it is further likely to go to 60% going forward actually. So I can say that fundamentally we are by and large on track because quarter to quarter, yes, in one quarter because of the cyclical nature of the industry, we may be up and down. But here as a whole, I think we are very much on the right track. Thanks, Mr. Lee.

Thank you, sir. Just one last question. Any impact of increasing input costs you're seeing in fourth quarter? You tell me where the dollar will be in fourth quarter. That is one. So it's very difficult, but I think we are managing our middle line very well. You would have seen our QL costs have remained at 1.8 per kcal in this quarter. I don't expect the cost to go up. Raw material costs are already matured. These are the two big cost items. Maintenance costs, which spikes typically in July, September, will be normal maintenance costs in January, March quarter.

Understood, sir. Thank you so much. I'll join back with you. Thank you.

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

Thank you. Again, sorry to echo again a very good set of numbers. You talked about cost inflation and improved demand will support cement prices from here on. Now, it looks like infrastructure demand is coming back, which should drive a low-pricing non-trade segment higher. Does that mean that even if cement prices move up, realization may remain under pressure over the next year or so? Any color on this will be very helpful. So firstly, Rahul, I like the echo that you talked about. Always good to hear good performance from as many people. Coming to your question, even if infrastructure demand is going, non-trade prices will also harden. So I don't see any reason why there should be any problem. There have been, in fact, if you go back two or three quarters, the gap between non-trading and trade prices have narrowed dramatically. Now, are you there? Hello? Yeah, no, this is very helpful. Thank you so much. I don't have any other questions. Thank you so much. Thank you.

Thank you. We have the next question from the line of Pinnakim Parekh from HSBC. Please go ahead.

Yeah, thank you very much, sir. Again, many congratulations. Very good numbers. We understand that demand and pricing both have improved in January. But to go back to what happened in the December quarter, now we understand that in the last two years there have been multiple acquisitions done in Southern India and other industry players.

Extensions of Southern India pricing seeing more stability with upward bias but somehow that is not taking place what in your view needs to change in industry dynamics in south for pricing to be more stable with upward bias more demand I think demand is opening up and I have I stand by my statement south will be new north that doesn't mean north is going away anywhere north is stronger and stronger

South is witnessing large institutional demand. The Amravati City project, which is going at its breakneck pace, the IT complexes, complexes which are coming up, data centers which are coming up, which are so cementitious in nature, highways, et cetera, that we have talked about, and the young population in these IT hubs will demand more housing and more social infrastructure. So I'm not talking about, I'm not talking about one quarter, but I am, as we as strategic players are looking at a long-term stability and reliability of the sector.

Got it, sir. So just to follow up, in your view, and given what the position Ultratech is at, with finally the institutional demand, as you highlighted, starts coming up in a big way in southern India, can 2026 see a break in terms of South India's historically volatile cement pricing?

Or do you see this as something evolving more over the next two, three years?

I think 26 will be a fabulous year. Got it. Got it. Thank you very much, sir. Thanks again.

Thank you. We have the next question from the line of Ritesh Shah from Investec. Please go ahead.

Hi, sir. Thanks for the opportunity. Good numbers. Congratulations. Sir, three questions. One is, would you be able to spell out industry demand growth for Q3 and nine months? That's the first one.

Don't hold me to it, but we would expect anywhere between 9 to 10% all India demand.

Sir, would you speak for Q3?

I was talking about Q3. Q3. Yeah, yeah. Answer for 9 months? Oh, 9 months. Math has to be done. Yeah.

2.5 plus 5. So, the year as a whole must be about 7.5 kind of thing. 6.5 to 7% 9 months.

Sure. Sir, my second question is basically if you could provide some detail around sourcing of flash and slag.

What are the sort of nature of contracts that we have on tenure and how is the pricing trending?

So, you know, one is there's enough new supply coming up, power plant capacities are going up, steel plants are coming up and we have a mix of long-term, short-term, domestic, and import supply, import sourcing. Fully secure.

So, putting this demand aside, if we have to improve our clinker factor, is there any limiting factor? No, no, none whatsoever. Okay. And, sir, when you say imports, it means imports for both flash as well as flag? No, flag. Okay. On this side, okay, that's helpful. So third question on India Cement, anything on non-core asset sale, that's one, and any thoughts on merger, basically simplifying the structure, any time lines around that, that would be useful, thank you.

Non-core, there are land partners, essentially we just sold off the coal mining company in Indonesia. The monies have been realized and that's how you see the debts remaining under control. There are a couple of big land purchases which we are discussing with potential buyers. I would expect further generation of up to 500 crores minimum which we should be able to get. We are now getting into the discussion, not discussion, exploring the legal options in terms of there's an ED case which is attached to the company. Two assets of the company are also attached. There's a property in Hyderabad and some financial securities which are attached. We are seeking legal opinion what will be the implications of that case and then only we'll take a decision further.

Sure. Sir, just a follow-up over here. I think, just correct me if I'm wrong, for India Cement, you had indicated 144 crores spent out of 601 crores. Are those numbers right?

Correct.

Okay. And, sir, when we say non-core asset sales, incrementally it's 500. And what has been realized so far?

Close to 200 or 250 crores. Close to 200 or 250 crores. I'll give you exact number. That's a very easy number. But 200 to 250 crores, let me look at right from the beginning, Ankit. If I can't give it on the call, you can reach out to Ankit later.

This is helpful. Thank you so much. All the very best.

Thank you. Thank you. We have the next question from the line of Satyadeep Jain from Ambit Capital. Please go ahead.

Hi, thank you. Just one clarification question on the Capex. Mr. Daga, you mentioned having 12 million term experience balance in 28. Just wanted to clarify the phase 22 million term that you announced. All of that is likely to get commissioned in SI28 given you already phased orders? Yes, please. Okay. Nothing spilled. As of now, you're not expecting anything to spill over into SI29? No.

29 is too hard. I would look at quads. At best, a delay by a quarter, you know, some project will get pre-pwned and some project would push over to the next quarter at best.

Okay. So, maybe in the next one, is it possible to, like, historically used to have this quarterly or projection for when you expect capacities to commission? For the next one that you have, since you already have... Sure, sure.

Sure, we'll send it.

We'll send it. And on the power cost... I see your captive power cost has been declining each quarter. Just what is driving that?

That is the average cost of power. So captive power which has gone from 7.1 to 6.5. No, fuel efficiency is the only reason which I could think of. Nothing more.

Yeah, and maybe minor, maybe some of the coal mix.

Fuel efficiency, essentially. Nothing specific.

Okay. Thank you.

Thank you. We have the next question from the line of Ashish Jain from Macquarie. Please go ahead.

Hi, sir. Good evening. Sir, my first question is, you know, on relics. All the demand drivers... My first question to you, Ashish, how were my numbers? Numbers are fantastic, sir. A lot of people have spoken about it, sir. No, no, numbers are fantastic, sir. So, you know, sir, given most of the drivers you spoke about are all infra-led demand, right? So, can we see a change in mix, you know, moving from PCC to OPC? or you think that will happen in the next three, four years in the industry?

In fact, what we could see is infra-demand converting to non-OPC also. There's a strong advocacy happening and there is a gradual conversion. You will know that most of the institutional players do the conversion or mixing at the project site. So instead of they doing it, some of them have started adopting and accepting the product from the cement manufacturer. R and C, it's about 3% of our total volumes of cement and growing rapidly. Where is it getting consumed? Large portion goes to institutional markets. Bulk cement is going up significantly, which will know help the interest institutional markets gives us better margins price remaining the same margins improve so that is very important.

Sir sorry but you know in fact that was the context of my question that you know if on-site lending is going up can it mean that you know. It is going down.

No no it is going down.

Oh okay okay because of R and C I said okay.

That is what I talked about, advocacy, and there is a conversion happening. Slowly, it's happening.

All right. Okay. Hello?

Are you there? I think he lost the connection. Take the next person, please.

We have the next question from the line of Indrajit Agarwal from CLSC. Please go ahead.

Hi. Hi. Thank you for the question. I have two questions, sir. Sir, first, can you highlight what is the spot that Coke price versus the booking levels in 3Q?

Around $118, $117. $118, $119.

Yeah.

Ranging in the trend.

Sure. And second, in 3Q versus it's a 3% kind of price decline sequentially, How would you split it between trade and non-trade? Was non-trade drop much sharper?

Correct. Non-trade was sharper.

Sure. Thank you. That's all for me. Yeah.

Thank you. We have the next question from the line of Rashi from Citigroup. Please go ahead.

Thank you. To just continue on the pricing question, where are we on pricing versus 3Q at the moment?

I think we are roughly 3 to 4 rupees on a naked cement realization basis up. If naked cement realization is up 3 to 4 rupees, prices are up. It's coming around 6 to 8 rupees for that. Okay.

Are you there? What I'm trying to get to is that you also made a comment, of course, on demand, but on that, you know, we will be able to pass on the higher cost impact in the form of better pricing.

So what is happening is I'm sold out. What do I do? So obviously, if I'm in a sold out position, I have to service my highest paying customers.

Understood. Fair enough. Okay. Then just on, again, on the capacity, is it possible to just, for India cement capacity, what would be the number by the end of 26, 27, and 28? 17.8.

No, that's full capacity. One sec, one sec. 17.5 or 17.8? 17.5. Good. Inhabitant on the 8th. I meant your Indian capacity Indian capacity which year 234 point something 235 by fiscal 28 Indian capacity fiscal 26 and 27 26 should be 198 199 and then 12 more million tons In 2017, yeah. We missed that chart. We will circulate that chart separately.

Got it. And just on K4RAM, in the second quarter, you had indicated the EBITDA pattern was 755. What is that number in this quarter?

Would be around 600 bucks this quarter. 600 bucks.

And the full rebranding is still maintaining June 26th?

Oh, we should be doing it in time, yes. Because, you know, we have already crossed a 70% mark for KSORAM as we speak and India Cements also we have crossed 55 or thereabouts. Don't remember the exact number but we are, every day is a new high.

Got it. Okay, thank you.

Thank you.

We have the next question from the line of Siddharth Mehtra from Kotak Securities. Please go ahead.

Thank you for the opportunity and congratulations for a great set of numbers. So just wanted to understand, given the strong volume growth we've witnessed this quarter, what is your approximation of Ultratech's market share going forward?

for this quarter and sort of where do you sort of aspire to be say two to three years down the line oh I wouldn't know a number on market share but if you see that we have been growing or our capacity utilization has been higher than the industry then obviously this is a gain in market share also there's no published data available to capture that number um Realistically. And going forward, I expect to see the same trend. As for aspiration, there's no aspiration. I think we are looking at how India is growing, where the growth opportunity is, and we will keep growing with India's growth story.

Got it. And just coming back to consolidation, Do you think there are additional targets which you would want to sort of look at just from a consolidating point of view so that you have better control on perhaps the industry dynamics as well?

Are there any potential opportunities still under consideration for the next year, 18 months?

It's highly opportunistic. We would love to examine opportunities if they come to the table.

Okay, but nothing is in progress, obviously. Okay, sir. That's it. Thanks for your time.

Thank you.

Thank you. We have the next question from the line of Harsh Mittal from MK Global Financial Services. Please go ahead.

Our first question is that what has been the clinical capacity addition till date in F526 and what will be the addition in quarter 4, this ongoing quarter? Two lines.

Yeah.

Two lines.

We have added two lines, actually one is almost 10,000 TPDH. It is 3.5. Yes. Translate into almost 3.5 million tons per year. And another one more line out, 3.5 million tons in Rajasthan. So it takes 7 million tons of capacity.

Right. And Meyer. Sure. So second question is, what is your premium share for this quarter? It's not been there in the PPC. Oh, we missed that. Premium share, 36%. Yeah. Okay. Thank you, sir.

Thank you. We have the next question from the line of Andrew Purushottam from Cognitive Advices. Please go ahead.

Thank you. When I was going through the presentation, I found that your EBITDA is up considerably, but your costs, some have gone up, some have gone down. Your raw material costs have gone up and your fuel and logistics costs have gone down. Now, given that the net realizations are also slightly lower, can one assume that the increase in EBITDA is almost entirely out of operating leverage? And if that is the case, if you are adding 8 and 12 million tons capacity the next quarter, stroke next year respectively, what can we see as the trajectory and the effect of operating leverage going forward? Could you just lend some color on that? Okay.

So operating leverage obviously will keep on playing a positive impact on efficiency improvement. Second point, or the first point that you asked, obviously prices were a dampener on the profitability, but volumes, which gave me operating leverage and cost management, very efficient and tight cost management. Of course, you cannot manage all the line items of cost, but cost The management team's focus always remains on running a very tight P&L. So that's what is reflecting in the performance in the quarter.

And the third one you asked about the raw material pricing. Obviously, the clinker conversion ratio is improved. So the raw material price will definitely increase, but the benefit you will get partially in the power and fuel side.

Okay, so we basically should see an increasing EBITDA per ton over the next 15 months.

Definitely, without a doubt.

And would there be any extra guidance that you would be able to provide in the range or that? No, we don't give guidances. Okay, thank you. Thank you very much. Thank you.

Thank you. We have the next question from the line of Gareja Ray from US Securities. Please go ahead.

Thank you for taking my question and congratulations. This is a superb number, I can say, which is beyond market expectation. So, sir, my question is related to employee cost. Is this a one-off for this quarter? And second question, can I expect 1100 to 1200 kind of EBITDA pattern for fourth quarter?

To your second question, we will do much better than what we did this quarter. I don't want to get into any specific number. And 916, employee cost going up. 10%. Why? Okay, why or why? Because what happens is our annual increases, compensation increases that take place would reflect and new plant report, new capacity getting added, that is what will reflect in this cost. What you ideally should compare if you look at Q2, you will not see dramatic movement. Okay.

And thanks for saying that fourth quarter we will be doing a very good EBITDA pattern. That's all from my side, sir. Thank you.

Thank you.

Thank you. We have the next question from the line of Naveen Sahadeo from ICSE Securities. Please go ahead.

Yeah, thank you for the opportunity. And, of course, congratulations on the robust volume growth that you have demonstrated. Two questions. One is your other operating income – just the difference between the net revenues and net sales that you report. It has increased by almost about 88 crores. And this was also the first quarter wherein the incentives would have likely dropped on a pro database in the sense if earlier we got incentives at 28%, now we get at more like 18% on a base. I'm just comparing. So is there anything... one-off that we got in this particular cost item. Sorry, revenue item.

So, Naveen, what happens is that new incentives kick in. Sometimes old incentives get exhausted. Case in point, our Dhar line one got exhausted. Whatever was the balancing quantum of money left and Dhar two kicked in. Then also a bigger thing and very difficult to show a trend line is volumes moving from the plant to which market. Depending upon the concentration of demand in the local market, the incentives will go up or down.

Helpful. My second question was on India Cements. And, of course, the company has done a remarkable performance there on the cost front. This quarter in particular, the freight cost flipped, I would rather say plunged significantly, almost 27% plus quarter on quarter on a per ton basis. So I wanted to understand, is this the new normal because a higher brand transition has happened so you can sell in a lower, you know, probability catchment area, or this is anything one-off? That's the main question.

Yeah, so it's a combination, and obviously when brand transition gets completed fully, you will see the real benefit. New footprint. New footprint. New footprint will also get captured. So this is not a one-off. Where it will go down further, difficult for me to say at this juncture. Perhaps we will talk about it in April-June quarter.

Thank you. Thank you so much.

Thank you. We have the next question from the line of Shravan Shah from Dollard Capital. Please go ahead.

yeah uh thank you and uh congratulations on strong volume growth uh most of the questions answered couple of uh clarifications and questions so first uh nine month capex what was the number and for uh full year for 26 27 28 previously we say 10 000 odd curve so that guidance remains intact

7,200 or 7,000 crores is nine months and, yeah, 2,500 crores will get spent in this quarter. So, anywhere around 9,500, 10,000 crores.

Okay, okay. Got it.

And in the next year, FY27, when we say 12 million ton we want to add, any ballpark idea in terms of 1H FY27, will it be a 5-6 million ton that we will be adding? I am sorry, what did you say?

In FY27, our plan is to add 12 million ton capacity grinding level. So, in 1H FY27, is it fair 5-6 million ton we will be adding?

You want me to tell you what date will we be commissioning and at what hour we will start the cement domain? Give us that flexibility to commission as fast as possible. Don't hang me for exact number or exact period.

No, no, I am saying one night you are for 27 in the six months process. In the first six months of FY27, will it fair to assume 5-6 million tons we will be adding?

Yeah, maybe at least 4-5 million tons. Maybe around 4-5 million. 4-5 million tons but it all depends because there are multiple moving parts so sometimes things get delayed and kind of thing. But yes, I can guess maybe 4-5 million tons.

Okay. And in terms of the demand for fourth quarter of this quarter, FY26, will it 7% to 9% that we are expecting? And for next four, five years, normally what we guided in corporate was there 7% to 8%. So, that number remains intact.

That remains 7%. And then for this quarter, fourth quarter, would it be a 9%, 10% or 7%, 8%? No, no.

No, I don't think 9-10% may be little optimistic but difficult to say because the last year's base itself was all we know is a good base. But yes, in all I think it is going to be the robust demand actually.

Okay, okay, okay.

Got it.

And this 1.54 CC ratio target that is by FY27 we are looking at.

27-28 in the middle of when we complete the previous phase of expansion between 27-28.

And the green share from currently 42% to 60% by FY27 we will be using.

So, you know, 27 or first half of 28. So, you know, I'm just giving us a flexibility of some delays.

Okay.

And last, the clarification in terms of price, when we say 3-4 rupees, price hike would have already happened versus third quarter of average. So, this is including trade, non-trade put together. Average, yes. Okay. Okay. Got it, sir. Thank you and all the best.

Thank you.

Thank you very much. Ladies and gentlemen, as there are no further questions from the participants, that concludes the question and answer session. On behalf of Alta Tech Summit Limited, that concludes this conference. Thank you for joining with us today, and you may now disconnect your lines.