Ladies and gentlemen, good day and welcome to the Birla Corporation Q2 FY 2025 Earnings Conference Call hosted by HDFC Securities. As a reminder, all participants' line will be in 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. Rajesh Ravi. Thank you, and over to you, sir.
Yeah. Thank you, Sajan. Good afternoon, everyone. On behalf of HDFC Securities, we welcome all of you to the Q2 and H1 FY 2025 Earnings Call of Birla Corporation. From the management side, we have Mr. Sandip Ghose, MD & CEO, and Mr. Aditya Saraogi, Group CFO. I now hand over the call to the management for the opening remarks, which will be followed by Q&A session. Thank you, and over to you, sir.
Thank you very much, Rajesh, and good afternoon and welcome to everyone. It's rather heartening to see we have almost 100 or little over 100 now, guests available despite, what should I say, not encouraging results. So that's a matter of encouragement for us that all of you therefore stand by our comments and communication. We have been in the past tried to be as realistic and as, to the best of our judgment, portray what we see the market and our company's prospects are. That's how we would like to approach this particular call as well in talking to you. Normally, probably when the results are not so good, people say much more to explain, but I wouldn't do that. We have explained our stuff in whatever we had to say in our press release, which most of you would have seen.
All that I'll say is we recognize the market reality, and we saw the headwinds, and our strategy is in that sort of a situation, to keep our head down, play with a straight bat, stick to the wicket, hold your ground rather than try to do any shenanigans or try any kind of helicopter shots or anything of that kind. That's how we would like to navigate in the days to come as well. Because we remain, as we have stated, in the press release, cautiously optimistic. Though I have seen many people expecting a huge upturn in the second half, of which almost a month is already over. So that leaves five months and people have expected, some have talked of a massive upturn.
While we definitely see things improving on both price as well as on volume and demand front, we are not painting an extremely bullish scenario. We have projected our second half in terms of volume increase at about 8%.
On a YoY basis, the H2 volume.
H2 volumes we have looked at second half about YoY basis, 7%-8%, and that's how we'll stick. For an entire year, we're looking at about 4%, thereabout, plus or minus, and that's what we think is realistic at the moment to assume. In terms of EBITDA, we are again looking at between first half to second half. We have projected about between INR 150 - INR 170 upswing in the EBITDA format and that is how we see it translating. We don't see, again, going by some market indications people have talked about getting only through realization. People have talked about getting INR 200 gain by realization alone. We don't see that in such an optimistic scenario.
So we have taken our all told, given our continuing cost efforts to reduce costs, increase our mix and everything else, we have projected about INR 170, as I said, and that is all that we would say by way of guidance at the moment. The rest of it, we remain consistent with our strategy in whatever we have been doing and our approach would be to We have had sort of in our older plants, our core markets, we have had a little slip in terms of capacity utilization, and I'll explain why that has happened.
What we really look forward to is to be able to take our capacity utilization up in those plants to over 100%, as we have been doing, or close to 100%, especially in our Central India plants and Mukutban, where we had achieved a very good ramp-up and scaling up, and we hope that the pricing scenario would allow us to again get back to the same kind of levels of about 60%. Last year, what is that we.
Capacity utilization for 60% last year.
No. Towards the end, we were almost operating at about 60%.
60%.
60%.
Yeah.
That is the kind of level we would like to get back to. Hopefully with the demand picking up and if there is slight upturn in prices. In the West, especially Maharashtra, we are being circumspect, because of the elections which have been announced, and that impact will continue for about a month at least. Whichever government comes in, by the time they settle in, new funds are sanctioned, et cetera. I think we will get into at least January there. In our core market, we are also factoring in the Maha Kumbh, which is going to happen in Prayagraj. That's once in a 12-year event, as you know, and that entire area, the logistics gets impacted. That will also something which will eat in to the peak season period of January, February, which is usually there.
We are being cautious on that count as well. But the real pain point in the last two quarters has been, in our judgment, in our view, has been the non-trade sector. If there is any impact, everybody talks about consolidation in the industry. If there is any, I think, visible impact of consolidation, we have seen that happening in the non-trade sector where the prices had crashed, come down very abnormally or to unrealistic levels in the last quarter, especially, and in the markets where we operate in North and Center. We were never major players in the non-trade category or OPC category. As you know, historically, we have tried to keep our non-trade levels to below 20% and our OPC at below 15% of our capacity over there.
Now, because of the whole market dynamics, the trade sector or the individual home building sector, since they were not as buoyant in the last two quarters, as all of you would have noted and seen, there has been a major market shift towards non-trade. Because of the market shift towards non-trade and also OPC component, I am talking about the industry as a whole, not about us. Since the market shifted towards non-trade and also OPC, as overall industry capacity utilization came down by a couple of percentage points, by our reckoning of whatever figures which are available from the analyst reports which are coming out, there has been a shift in that direction, and there were price drops very significant, which made it unviable for us to be participating in the non-trade and OPC segments in many markets.
Especially in Rajasthan where things dipped, as I said, to very abnormal levels in the pricing of non-trade and OPC. Similarly, in U.P., in Bihar, people were participating, so we deliberately chose to keep our exposure limited there because we certainly didn't want to operate at a variable cost loss or a cash loss to be in those markets. That has resulted in our slightly lower capacity utilization than what we are capable of and what could have done, and we have not certainly tried to push volumes unnecessarily, which would have hurt both us as well as the industry. We tried to be prudent in that.
But we hope from whatever we are hearing, if the non-trade prices, if there is more, I should say, rational pricing and market things happen in the non-trade and OPC sector, that will have its positive rub off in the trade sector as well, and that should benefit everybody, and that is what we see as a silver lining going forward. Finally, coming back, to summarize, as we said, we are looking at second half in a very sort of a positive, but with a great deal of realism, pragmatism, and therefore, we are committing our growth for the entire year. We are talking about, as we said, around 4% in the volume growth. Annually, we are looking at about 8% - 9% or around 8% is the growth.
We have talked about the EBITDA increase, which is between around INR 170 is what we are guidance, which we are giving just now for second half, the increase between first half to second half. With that, I will rest my introductory remarks, open up for questions, and we will be happy to, wherever we can, elaborate further or comment, or where we can't, we will be very honest and frank enough to tell you our situation. One last one which I missed, which is mentioned in our press release is our progress of our Kundanganj third line is going on satisfactorily and on track. We hope when that comes in next year, we will have some of the incentives which we lost because of Kundanganj incentive getting expired last March will get restored. Between that, and we have already started clocking in incentives from Mukutban.
Between these two, we will be kind of back to a level playing field, that what we were pre-March 2024. That is how the only other major significant change which we see. Some of our competitors have the advantage today of having incentives, especially in U.P., which is enabling them to participate much more aggressively in the non-trade segment or even the OPC segment, where they are doing. We are constrained there. Not that, as I said, our intention is not to sell more OPC or more non-trade. We would like to remain in the trade segment where we feel we have very strong brand assets. Our brands are today very well accepted, especially MP Birla Cement Perfect Plus, and MP Birla Cement Samrat has always been a heritage strong brand in U.P. MP Birla Cement Chetak is a heritage strong brand in Rajasthan.
Our distribution system which we have, our distribution assets, go-to-market assets, they are very strong in our core markets. As soon as markets bounce back, we hope to be back again on the driver's seat as far as the trade and our channel sales are concerned. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Thank you, sir. Sir, just a couple of data points needed. What was the incentive that we booked for Mukutban in Q2? If possible, in third and fourth quarter put together, how much are we likely to book the incentive for Mukutban? Also the volume for Q2, if possible.
Let Mr. Saraogi answer that.
In Q2, we have booked incentive of INR 17 crores for Mukutban.
17 .
17. Okay.
Okay.
What was the other question?
How much more in the second half we are likely to book and what was the volume of Mukutban?
We are guided for total incentive of about INR 30 crores for the whole year. We are standing by that guidance. Okay?
Okay. Yeah. What was the volume in 2Q and the lead distance for the second quarter?
The volume was 50,000 tonnes and the lead, 5 lakh tonne, and the lead distance was around 340 kilometers.
340. Lead distance for the full entire company.
Sorry. For Mukutban, it was 425 kilometers. For Mukutban.
Okay.
You are asking for the entire company or you are asking for Mukutban?
Entire company, sir.
Oh, entire company it was around 350, the lead distance.
Okay. Last, sir, just a clarification. This Prayagraj 1.4 million tonne, when is it likely to start?
Two, one, we are basically.
Not Prayagraj. We are talking about Kundanganj.
Kundanganj.
Kundanganj, sir.
Yeah, that we know. But on the Prayagraj 1.4 million tonne, when it will start?
No, that we will announce. We have not announced commencement. It is in the pipeline. But project starting, we will announce whenever we are ready for it.
Okay. Lastly, if possible, the CapEx for full year INR 800 crore we said, and we have done INR 200 odd crore. So any downward revision in the CapEx?
The CapEx for the whole year we expect to do about within INR 700 crore. Okay?
Okay. Thank you, sir, and all the best.
Thank you. The next question is from the line of Jyoti Gupta from Nirmal Bang Institutional Equities. Please go ahead.
Sorry, before you go on, just one clarification for Dolat Capital. What we are saying is our first unit which will come on stream is Kundanganj. Prayagraj is in the pipeline, but we have not commenced construction there, so we are not committing the date when it is going to come in. It is also linked to certain other things. So right now, what we are focusing, what we have visibility and committing is Kundanganj. It should not be read as Prayagraj is not happening. Prayagraj is very much as part of our plan, like a few other locations of grinding unit which we have announced, but we talk about these specifically only when we have started the project, broken ground, and that is where we stand as far as Prayagraj is concerned. Thanks.
Can I ask my question?
Yes.
Yeah, please go ahead. Sorry.
In the second half, you said your EBITDA potential will improve by INR 170. Just wanted to have an understanding in terms of cost. Where do you see the cost and what kind of cost improvement you will see from Project Shikhar in terms of numbers from Mukutban and Unnati and your logistic optimization. What kind of numbers you are building in the second half from these two projects? In case you have anything.
These two credits, in the second half, we are expecting efficiency of around INR 70 a ton for Unnati and Shikhar taken together.
Each. Okay, taken together INR 70.
Taken together INR 70.
And 100 will come basically from raw material and the volumes and the.
170 is a cumulative effect of realization, cost optimization, efficiency improvement, everything.
Yeah. Okay.
Yeah.
Okay. I could see that you are not very positive, quite cautious on the second half. Obviously, how do you see any particular impact apart from the non-trade segment that you see is coming from the consolidation? You are impacted, like adverse impact from the consolidation in your core markets, apart from non-trade, which has taken a downturn by INR 300 a ton decline [Non English Content].
We are not seeing any impact there. As I told you, it's a function of, we are luckily, Jyoti, given our capacity, as we said, we've been operating at 100% capacity and we don't see that as a problem. I talked about in those core markets, touch wood, fingers crossed, we have very strong brand assets. We've got very strong go-to market assets. Today, we can say with some degree of, I think, pride in terms of our people strength. We believe that the employer branding of the company has gone up significantly, at least from how we see interest of people, especially in sales and marketing, to come and join us at various levels today. I think we are quite well-placed to take on the market opportunities as soon as there are some tailwinds which come in and the market table improves.
I deliberately talked about the non-trade because that's an area where we don't participate, and that's where we are limited players, participate in a limited way. Certainly, OPC is not our preferred product. We don't like to do that. But when those segments come down, obviously there is an impact, a spillover impact on the trade segment. I am taking hope or encouragement from certain pronouncements which I hear in the market where people are talking about increasing bottom line contribution through realization of INR 200. I expect some of that will come through the non-trade and the OPC segment as well, which should augur well for trade and the blended cement segment where we are major players.
Okay. Sir, anything that we expect from the Orient, the acquisition of Orient Cement, do you think this is with Adani?
We don't operate in that market. We are very small operators in Telangana.
Okay.
We will just watch it from the ringside. We are on the other side of the fence there sitting in Maharashtra.
Okay. Thank you so much, sir. Thank you.
Thank you.
Thank you. The next question is from the line of Prateek Kumar from Jefferies. Please go ahead.
Yeah. Good afternoon, sir. A couple of questions. Firstly, on your premium segment, which is very high rural mix. So when you say that the price of the trade segment sort of gets impacted by non-trade, is the premium segment also gets impacted likewise, or how is the difference sort of changes?
See, premiums don't exist in isolation. When you're talking about premium, you're talking about a base price. If the base price drops, obviously, while the delta might remain similar or may delta may marginally increase. But overall in the price table, you are going to have only so much of a difference between what's happening in a non-trade and the trade. Our premium, we consider that to be a competitive advantage of this company. As I've said in the past, that we are one of the few or perhaps the only company where you can say with some degree of pride, who straddles almost equally between the premium and the popular segment. I don't call it popular. I call it the value segment. So between the value and the premium, we operate almost on equal footing.
To that extent, we are able to calibrate some of our shifted. Therefore, in this quarter, you'll see when part of the realization which we have delivered, why we have been able to keep our realization higher or the drop lower than the market drop is because we have been able to shift volumes towards premium in most of our markets. That's how our premium volumes have increased. But we don't see any absolute virtue in either premium or value segment. We will offer what the customer wants. If the value segment again picks up, when I'm upping my capacity utilization, not all of it will come from premium. It will come from value as well, because that's a very important segment of the market. You don't operate right at the top end. Also the middle matters, and we would like to be present everywhere.
Sure. One other question on incentives, the guidance for INR 100 crore incentives for FY 2025 compares to INR 160 crore o r INR 140 crore to INR 160 crore in past three years. Is that right?
Yes. So it is obviously the delta between what we were getting in Kundanganj and this period, especially 2024, 2025, you will find that as a gap, because Kundanganj has stopped from 1st of April, and only Mukutban is what has come in its place. The Mukutban incentives are lower than what we were getting in Kundanganj. Therefore, that is where you are seeing the 160 to 100. That is the kind of gap which you are getting. Hopefully next year, as we go on commissioning Kundanganj Line 3, that will get restored, so you will find us back. As I said, it will be a kind of level playing field once more between the two places. We will go back to our original levels of incentives in the country.
The last question on your comment there regarding Orient Cement, you said you sit on a corner of the other.
We sit on the other side of the fence because we are in Maharashtra. They are mostly in Telangana and the South. We do not operate in that market much, in their core market. Even in Maharashtra, they are much more in the western and the lower parts of it. We are concentrated in Vidarbha, where they have a very modest presence. We will have to see how it pans out post the acquisition, because I have been reading, just like you, a lot of analysis because if you are to look at Adani as a combined thing, Adani already has a presence in those areas, with their own brands of Ambuja and ACC. So how much is this Orient going to add to their presence?
It is not easy having brand integration. What will be their brand strategy? Those are things. We do not see Orient really affecting us significantly as per their existing operation. In future, I saw that they have got lease in Rajasthan, if that comes up, how that will pan out, or recently I saw they are tying up on some fly ash in Madhya Pradesh, in Betul area. All those are in future. Similarly, they had a grinding unit plant in Maharashtra, which they gave up their tie-up with Adani, maybe since this was in the anvil that has gone. So those are futuristic. As on today, Orient and we do not have much of an overlap.
Sure. Thank you, sir, on all that.
Thank you. The next question is from the line of Saket Kapoor from Kapoor & Company. Please go ahead.
Namaskar, sir, and thank you for the opportunity. Saraogi ji, as you mentioned about INR 100 crore being the total incentive number that we are factoring in for Mukutban, how much actual cash have you received for the first half? Out of the INR 17 crore, or the entire balance is also still pending.
See, INR 100 crore is for the company, not specifically Mukutban. There are some small incentives in some other units also. In the first half, we have received around INR 120 crore from (Chhattisgarh).
It is not from Mukutban, boss. These incentives do not happen hand in hand that as soon as you get, the next day you get. Like today, I believe you are getting income tax refunds immediately, 24 hours. It does not happen in subsidy.
It comes with a lag.
Lag. Correct, sir. So what is the closing balance, sir? Other than whatever we have booked as incentive, how much is still left to be receivable on the receivable account?
Excluding West Bengal, where the matter is under sub judice, it is around INR 450 crore. In fact, in West Bengal also, there has been a development in the quarter. The state government has filed an appeal against the High Court order, which had decided the matter in our favor. So that matter is also being disposed by the Supreme Court. Currently, the state government does not have any legal recourse in the matter.
Sir, can you come again? INR 450 crore is the figure you mentioned that is still left to be received?
The total, if you were to say, what is the receivable on account of incentives from various governments as on date, it is INR 450 crore.
Excluding West Bengal.
Excluding West Bengal, where we have an additional amount, which was sub judice because the government had contested it, and that contest has been disposed of by the Supreme Court. The ball is back in West Bengal government's court, and they will have to, when they settle it as a different matter. Excluding that, it is INR 450 crore on which we see that as a timing issue and not any dispute issue.
Yes. Okay. Can you mention that figure also, which is under dispute or litigation from the West Bengal government?
Around INR 140 crore.
Around INR 140. Now we have an upper hand because of the disposal by Supreme Court.
We were always on an upper hand. We were always on strong ground.
Okay.
It's not a question of any upper hand, lower hand.
Okay.
Nothing underhand.
Okay. Thank you, sir. Sir Raghu, for the capital work in progress, the closing balance stands at.
Too many questions, Saket. I told you are in Kolkata, you can't take advantage of so many questions.
Sir, last question, and then I can come in queue, or sir, you say.
You don't monopolize. Go ahead.
Thank you, sir. Sir, sir, obviously the closing balance for capital work in progress is INR 558 crores. With Kundanganj getting operationalized by first quarter, what will be. Sir, how much will we capitalize for the current year? And for Kundanganj, how much have we spent as of now?
I can't give you this figure offhand. You can connect with (Shashanki) on this please. Okay?
Okay, sir. Sir, I will join the queue. Also, sir, in the press release, the update for coal mines are not mentioned, sir. If you could give some color on.
We are expecting to start commencement of operations from Q1 of FY 2026. Okay?
Okay. We are still expecting coal, sir. [Non-English Content] .
[Non-English Content]
Currently, one of our Bikram Coal blocks is operational, I think so. We are expecting coal.
There we are expecting as per the capacity of the block, which is around 250,000 tons on an annual basis.
Okay. Okay, sir. I join the queue, sir, and I will have two or three more follow-ups. Thank you.
Thank you. The next question is from the line of Mangesh from Centrum Broking Limited. Please go ahead.
Hello, sir, and thank you for the opportunity. My question is regarding demand in U.P. and M.P. I just wanted your views in terms of how much there could have been the demand decline in this quarter on YoY basis, and was it only because of monsoon and election after effect? When do you expect the recovery in the same?
Mangesh, we cannot give you exact or estimated figures. Those figures of market decline you will get is from the analyst figures, because today there is no published data in that regard. We would not like to comment on that. But in terms of causes, it is also money availability because a lot of fund release from the government have got delayed in many places, or governments have other priorities. It has gone for different schemes in different places. Some of the fund release has been an issue in both these markets, and that is what has probably delayed some of the state-level development work or development expenditure which happens, because money has probably got more to welfare schemes and other stuff. There has been no elections, as you know, in M.P. and U.P. in the last six months. It is that and the overall situation.
Okay. And sir, another question was on the pricing front. We feel that pricing post-August has improved marginally, but what is our current realization compared to the exit of September? Is there any improvement?
I do not think there is any significant improvement, Mangesh. This is based more or less it comes. One has not really seen any consistent improvement or improvement with sticks. I personally do not expect to see any very significant changes between now and at least till mid-November.
Got it, sir. Sir, final question to sir. Given that we would have a very weak operating cash flow this year because of weak realization, do we see debt increasing? Any target or guidance on debt levels by the end of this year?
The debt level we expect to close around INR 3,000. Net debt we expect to close around INR 3,000 crores. Our cash from operation has been less than what we had budgeted. We have also scaled down our CapEx. I think earlier we had guided for INR 1,000 odd debt also. Debt also we have brought it down to INR 700. We are calibrating our options also according to the inflow.
Understood, sir. Thank you, sir.
Thank you. The next question is from the line of Rajesh Ravi from HDFC Securities. Please go ahead.
Hi, sir. Two questions. First, the margin guidance for second half, INR 170 or which you are looking forward to. First half we have done close to INR 550. Even if we add up the INR 170, full year margin would be hardly to the tune of INR 620, INR 630 versus No, full- year. Between first half we have done INR 535, and second half we are looking at INR 170 higher, so close to INR 700 odd. So the full- year average would work out to be INR 620 versus INR 800 we are doing FY 2024. Are you not building any price improvement in the second half or what is?
Of course, we are building in, Rajesh. As we said, INR 170 is not going to come purely from cost savings. Our cost and other initiatives that we indicated will probably give us about INR 70, and rest will come partly from price and a few other things as well. We are not being bullish enough to say that we are going to get INR 200 into the bottom- line from price alone. We are positioning about because price increase, if I have to get 100 between now and March end, that is an average. Okay?
Correct, sir. We need higher price like before.
Average to get there, I do not want to get into showing you back-of-the-envelope calculations. You see how much it can peak, and it is a regional factor. I am not questioning other people's projections. They could be having other regions in mind.
We do not operate in the South where they may be having more. I am looking at our specific market in Maharashtra. I told you I see Maharashtra. I am being cautious in Maharashtra because of elections and the post-election impact, because it takes a little time for, again, governments to settle down, monies to come out. Maharashtra also, there are various welfare schemes and all committed, so I do not know how soon monies will come and how much impact that will have on the demand and the pricing. Similarly, I am being cautious. Our core market is East U.P., and the peak season where all of us look at a spurt in volumes and prices is usually, as you know, in this industry, from second week of January to February middle. That is the real time when you find historically cement prices go up sharply.
But that's the time when we are going to see U.P. some major dislocations. Okay? With the Maha Kumbh and everything else, and that time movement becomes an issue and various things. So we are being perhaps, you might say, a little extra cautious. But you'd rather be conservative than be bullish and come back to you cutting a sorry face next when we speak in three months' time.
Sure. And on volumes, any thought process, what sort of growth Q2 obviously has been back and.
We mentioned that, Rajesh. We are looking at second half about around 7%-8%.
Okay. Last question, sir. There are two large investments sitting on your books, UltraTech and Century Textiles. Cumulatively, if I look at approximately INR 700 crore value. Is there any thought, do the management or the promoters have any willingness, or can these be sold off and used to reduce debt or for some other efficiency programs?
There is no embargo in selling these investments. We, as a management board, we can sell these investments whenever we want to. These are non-strategic investments.
Okay.
But we will not sell these to settle or reduce debt. If we feel that we can deploy this proceed from sale of these investments into a productive asset which can yield good return, those kind of things, at that point of time, we will consider.
Okay. Because you would be doing this Maihar expansion also, this could come handy.
It could come for various things, Rajesh. We would do at a time of our choosing and in terms of the opportunity.
Sure.
Since you have been associated with the company from a very long time. You would know that we were sitting on a fairly large treasury balance for.
Correct.
a long time till we made our Reliance acquisition. We did it at the right opportunity, when we felt it was right in our prudence. Similarly, we'll take a call on that, but we don't have any compulsion right now to dilute our debt by selling this. That is certainly a question we can tell you categorically that's not in terms of our plan.
Great. That's all from my end. Thank you. I will come back in queue.
Thank you. The next question is from the line of [Giri Jayre] from Yes Securities. Please go ahead.
Hello. Am I audible?
Yes, sir. You are audible.
Thanks for the opportunity. Yes, I see getting incentive as additional money makes sense, and it is really adding to the profitability. But in terms of core business, if I see in fourth quarter FY 2024, we have done an EBITDA pattern of around INR 974, which is pretty good. Significantly, I can see first quarter, second quarter, there is a huge decline. Even in fact, second quarter FY 2025, we saw around 50%-60% of decline from fourth quarter if I compare. Again, fourth quarter will be a volume-driven quarter. Obviously, volume is higher, then again your EBITDA pattern will come down. My question is that, what kind of projections we can go ahead for fourth quarter FY 2025 EBITDA pattern? Is this the mark we can see somewhere in between INR 700-INR 800?
Because price, again, I do not see much price kind of appreciation in near- term.
That's your view. You have to take a view, and it's not also a pressure, your view versus our view. You have to see the entire thing. We can only give you our point of view. First of all, when you are looking at last year fourth quarter to now, obviously you will agree that the drop which you have seen is not isolated for us. Already you have seen three, four companies' results are declared, and we are no exception in that pattern. In fact, in some ways
From whatever we have seen, you are a better analyst. Maybe we have done a tad better than other people in terms of the management of the bottom- line in terms of the drop. So that being one. Now, if you were to compare, to answer one question of yours, with last year. Last year was very interesting, and I found it slightly odd in a way in the fourth quarter. Historically, in cement, from as long as I have been, fourth quarter, the surge you see is both of volumes and prices.
Okay.
Last year, fourth quarter was only volume without prices. There was no substantial increase in prices. There was a surge in volume. Now, this fourth quarter is a matter of conjecture. When you're talking of volumes, whether it will be volumes in isolation. If it's volumes in isolation, not just for us, others who are projecting INR 200, where will the INR 200 come from? Obviously, that has to come along with a surge in prices. Now, for the INR 200 what other people are projecting, we would not see it, we would not bet our houses to expect it will be that high. So we are being conservative in this, but we certainly see a price improvement in the last quarter.
Where I see the price improvement coming, without getting more specific, despite some of the other issues which we talked about, the elections in Maharashtra or Uttar Pradesh, Prayagraj, et cetera, and what I hinted in the beginning, I think the prices today, real abnormal prices are in the non-trade.
Okay.
If the non-trade prices pick up and there is more rational pricing in non-trade and especially in the OPC segment, I see you are immediately going to see a positive impact or a positive rub-off, spillover in the trade segment. That has happened in the last two months also. If you see the areas where there has been improvement in prices, when we talk of nationally, you do not see any kind of price changes between August, September, October, but areas where there has been actually a price increase. Say, north has recorded some price increase. The north price increase has essentially come, if you go through, it has come because people have corrected the non-trade prices. Before that.
Yes.
Non-trade was pulling trade hugely down. Once some amount of sanity was restored in the non-trade prices, trade picked up. Similarly, we therefore hope that if that phenomena you see across the geographies, if not across the country, you will start seeing some impact of that coming. So at least you will get back to normal levels. Right now, I think the prices are depressed below normal and that will come and once that level playing field, if we come back to that by November or December end, which is entirely possible, it is just a matter of, as I said, some sanity getting restored. It can happen. Last quarter, you are going to see both volume and price increase. People are talking about pent-up demand. Pent-up demand will come with pent-up demand, obviously price will also go. It is not going to be just volume.
Sorry to cut you off. You mean to say the price level which is hovering right now, so this is bottom out, means there is no further decline in price. I can just assuming, or is there any kind of further I mean to say there is no further decline in price and there might be some chances of momentum go up.
Yeah, I think that would be a fair assumption. Things can only improve here. I don't see further decline happening because whatever disturbances, those are more or less done. Now, Diwali over, Chhath will be over. By then, your new crops will come in the harvesting season. Money will be there in the system. All of that labor will return back from the Chhath thing. Then harvesting and all that, people will go back. I don't see, therefore, certainly scope for further slide and decline. And I repeat myself again and again, that's the only conjecture I'm making, sticking my neck out. If sanity returns in non-trade prices, which are obviously in the hands of the big players, big players who participate in non-trade, especially on national accounts, et cetera, you are going to see benefits of positive rub-off of that also on trade.
Fair enough. Sir, my second question is into premium segment. Right now it is 71%, it seems, right?
71 what?
Sorry, 61.
61, yes.
Okay. This has improved a lot. It was 51, now it is 61.
I wouldn't call it improvement. It will be wrong on my part. As I was trying to clarify earlier, this is strategic. If my today the prices have come down and if I am selling below capacity, for whatever reason I can't participate, I would focus which is giving me the maximum return. So it's a combination of product mix and geo mix. If I'm selling in markets which are giving me the geo mix wise, it is the best market because it's close to my operations. In those areas, if my premium product has a greater pull, I would sell more. I have got nothing against selling anything in the value or the popular segment. Okay?
But if the value and popular segment I find there is more happening and here I have got a thing, I would rather take the INR 20, INR 25 premium, but I don't want to vacate that segment. This is a very unique advantage this company has. I don't know how many people recognize that. We are a company where we have almost equal, we straddle between both the segments almost equally. Okay?
Yeah.
I truly agree with this because we are the highest premium segment sell in the industry, and that is a good part in our company.
Both sides. First, to use my favorite expression, we are a double engine company.
Okay. Lastly, what was the Mukutban utilization rate this quarter?
Rajesh, let's move on to the other one. We have given the figures.
Okay, I'll get it. Thank you, sir. Thanks for the answers. Yeah.
Thank you. The next question is from the line of Raj from Ārjav Partners. Please go ahead.
Hello, ma'am. May I speak?
Yes, sir.
Sir, I just wanted to know full year growth guidance.
Boss, we have said that, boss, already. We have said the full.
Whatever we have said that covered the.
We repeat that full- year growth guidance we have said in terms of volumes, you have said 3%-4%, and we have given just now as you heard, our EBITDA also we have given.
10%.
Huh? Thank you.
Sorry, you were not clear. Can you repeat it again?
I said volume we have given already. We said about full year volume will be about 4%.
3% - 4%.
3% - 4% is what we have said. EBITDA also we have given.
H2 and you can take it from there.
H2 we have told about INR 170 over H1, which is about INR 530. You can do your averaging of the two and come to the number, just like Rajesh did just before your question.
Thank you. The next question is from the line of Amit from Axis Capital. Please go ahead.
Yeah. Hi. Thanks for the opportunity. Just wanted to check captive coal mining figures and when will you start the captive coal mines? Also with the pet coke pricing now having come off and rupees kcal, I think pet coke is now almost 1.5. What kind of cost benefits could still come in from the captive coal mines?
Captive coal mines, already we had informed for the Bikram. Already Sial Ghoghri is in operation, for which we do around 2.5 lakh-3 lakh tons per annum. For Bikram Coal Mine, the first coal production is going to start from the Q1 FY 2026. Our only requirement of the pet coke is only in one plant only, and we have reduced the requirement of the pet coke more on we are in the indigenous coal. Wherever there is a change in the prices, we take it to trade out, and our coal prices you can see in the last quarter is INR 1.47 per kilogram. If the changes are there, we are not seeing much of changes. Maybe slight change will be there depending on the prices of the petrol which is going in the market now.
In terms of the cost differential, our cost from Bikram Coal Mine is expected to be around INR 1.10 Per 1,000 kilocalorie. The ongoing rate for fuel in the central region is between INR 140 and INR 150. That is the kind of difference that exists as current fuel price.
Thank you very much. I think that brings us to the last question, and it is really heartening to see we are ending the day with 150 people on the call. That is very encouraging. Thank you so much for joining, taking the time out on a busy day. I see today there were at least three con calls from the cement sector. One in the morning, one now, and one after us. That you took time out for us, it is really heartening. Thank you very much.
Thank you. On behalf of HDFC Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.