Ladies and gentlemen, good day and welcome to the earnings conference call of JK Lakshmi Cement Limited for the quarter ended 30th June 2025. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Agarwal of PhillipCapital. Thank you, and over to you, sir.
Thank you, [Ray]. Good afternoon, everyone. On behalf of PhillipCapital India Private Limited, we welcome you to the Q1 FY 2026 call of JK Lakshmi Cement Limited. On the call we have with us Mr. Arun Kumar Shukla, President and Director, and Mr. Sudhir Bidkar , Executive Director, Corporate Affairs and CFO at JK Lakshmi Cement. I would like to mention on behalf of JK Lakshmi Cement Limited and its management that certain statements that may be made or discussed on this conference call may be forward-looking statements related to future developments and which are statements which are based on current management expectations. These statements are subject to a number of risks, uncertainties, and other important factors which may cause the actual developments and results to differ materially from the statements made.
JK Lakshmi Cement Limited and the management of the company assumes no obligation to publicly update or alter these forward-looking statements, whether as a result of new information or future events or otherwise. JK Lakshmi Cement has uploaded a copy of the Q1 FY 2026 results presentation on stock exchanges and the company website. Participants may download a copy of the said presentation from these websites. I will now hand over the floor to the management of JK Lakshmi Cement for their opening remarks, which will be followed by interactive Q&A. Thank you, and over to you, sir.
Yeah. Thanks, Vaibhav, and good afternoon to all of you. This time, as requested by some of you that we need to upload our presentation, so we have done that this time. Probably you would have downloaded the presentation for the meaningful discussion in this conversation. Since we have given everything, I think we can start our conversation right away. But before that, I will just give you a glimpse of the industry, which is important, though I think all of you are in touch and were tracking the development in the industry, but nevertheless. Demand supply side, if you look at last quarter, the volume growth is about 5%-6%. This is what we have seen. There is regional disparity in terms of volume growth. Some of the zones have done better, but some of the zones have not done as good.
This is on the demand side of it. On pricing, some of the geographies have witnessed a good price increase, particularly South and East. South to the extent of about 8%-9% and East also about 6%-7%. North and West, I think, have not witnessed that much increase, and also central part of India. West, in fact, I think prices have been a little bit flat last quarter. This is on pricing side of it. If you look at what kind of drive we have within the organization, I think that remains what I have been talking about for the last so many calls. We are looking inwardly as to how we can really improve our efficiency across the value chain to be amongst top companies in terms of EBITDA per ton.
I am happy that I think directionally we are all right and we are working on all those levers, which is going to take us to that level. On the manufacturing front, of course, I think renewable energy is one of our areas where we are focused. That is what is going to give us savings going forward. Second is the improvement of TSR, thermal substitution rate. We are doing better and in the coming quarter, I think things will further improve. Of course, I think after this monsoon quarter, which is typically challenging in terms of operational difficulties when you use AFR and RDF. Third is digital front, we are working quite intently and extensively and particularly on manufacturing front. There are a few initiatives which we are going to take on digital front, which is going to drive our efficiency further.
On supply chain front of it, yes, I think constant focus is there to optimize this in terms of our dispersion and also in terms of return ton per kilometer freight. On top line front, the recently rejuvenated brand of Green+ and PRO+ Cement is doing very well. With this merger of Udaipur Cement Works Limited and those two brands coming to our fold, JK Lakshmi fold, which is Platinum Heavy Duty Cement and Platinum Supremo Cement, is further going to help us to improve our channel reach and volume. That is what we believe. We are constantly working on improving price positioning aftermath of this new brand launch, which we call Green+. That effort is also on.
Apart from that, which I think Mr. Vaibhav has been mentioning in his thesis, and I am quite aligned with him that how we can really improve this ground level kind of working in terms of efficiency, in terms of dividing all those redundancies. I think that is also in our sight. This is what we have with us. I think just a brief prelude to our discussion, which we are going to have now. Thanks for now. Now we can start question and answer.
Sure. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touch-tone 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 questions. The first question is from Amit Murarka from Axis Capital. Please go ahead.
Yeah. Hi, good afternoon. Thanks for the opportunity. So first question is on volumes and realizations. You have done quite well in this quarter. What would be the guidance that you would like to give for the full year, from a volume perspective now?
As I said before, we will do better than industry and we are well on track, so we will deliver that. At least incremental over the industry growth. That is, we are confident about.
Sure. Could you also highlight, you keep optimizing on the geo mix as you have been highlighting. So has this volume growth come from other regions? Because what we have also understand was there was weakness in the Northern India region this time.
Yeah. Amit, you are right. I think, yes, as I told in the last call also, some of the areas where we are going to be there in future, we have started seeding those markets. Yes, volume has come from those areas, those markets. You would have noticed that our lead also has gone up to an extent. That is the outcome of that. Central part of India and particularly U.P. East, volume growth is coming from there. Of course, I think North was a flat kind of thing or not done that well in terms of volume. Yes, we have got growth out of those newer market one. Second, I think, we had clinker also with us, so that has helped us to improve our volume little bit.
Market like M.P. East, which we cater from Durg and Maharashtra East, that has helped us to improve our volume. Of course, I think other zones have also done reasonably well, and we are in alignment with the industry growth in those markets as well.
Got it. Thank you. Just second question on the expansion in East. What is really the status right now? I think, is the equipment ordering done? If not, then how soon can we expect that?
Equipment ordering, you are talking of the Durg plant, no, expansion?
Yes.
Expansion, we hope to start placing the order from the current quarter.
Sure. March 2027, I think, is what you are guiding for completion. Is that good?
Hopeful that we will be able to do that.
Got it. Sure. I will come back in the queue . Thank you.
Thank you.
Thank you. Participants who wish to ask questions, please press star and one. Next question is from Vishal Dudhwala, from Trinetra Asset Managers. Please go ahead.
Yeah. Thank you for the opportunity. Am I audible, sir?
Yeah. Very much.
Yeah. JK Lakshmi Cement reported a twofold increase in net profit on a year-over-year basis, plus volume growth is fantastic. I want to just know, like, partially attributed the merger with Udaipur Cement. Can you elaborate on the operational synergy already realized post-merger in this quarter?
I think almost all those synergies we had been doing before. I think we have realized almost of that. Maybe I would say to the extent of 80%-90%.
Okay. That's it from my end.
Thank you. Participants who wish to ask a question, please press star and one. Next question is from Ashish from Leo Capital. Please go ahead.
Sir, can you just reiterate what is the timeline for commissioning of a Durg expansion project? My second question is, what sort of utilizations are we operating at currently in the East?
East, currently, I think we are almost operating at 100% kind of thing. This is what I think you ask. East, I think our efficiency is good in terms of capacity utilization.
On that project, we expect the first phase, which will include the clinkerization and two grinding unit, one at the mother plant at Durg and another in the Madhubani, would happen by March 2027. One year later, the balance, the other two grinding unit will happen. That is what we think are the timeline as of now.
All right. Thank you, sir. That is all from my side.
Thank you.
Thank you. To ask questions, please press star and one. Next question is from Rajesh Ravi from HDFC Securities. Please go ahead.
Hi, sir. Good afternoon, and congratulations to the team for a strong performance. My first question pertains to on the Northeast expansions. What is the status on the expansion of the Northeast projects?
Yeah. Northeast, there have been some development which we have been reporting to the exchanges. As we mentioned earlier, that the MDO agreement which AMDC had granted to Trivikram Consortium, that was canceled and we o bviously filed a petition in the Gauhati High Court against that. But finally, we have been able to retrieve at least two of the three mines having limestone reserves of about 250 million tons. That has come directly as an MDO in JK Lakshmi.
Okay.
The third mine may be auctioned in future. But we have got direct access as 100% owner in those two mines. Out of 335 million reserves, which were there in three mines taken together, we have now accessed percent for the two mines. We are pursuing with that. The land which was allotted in the name of Mahabal in that consortium, we have now got that transferred in the name of JK Lakshmi. Ultimately this northeast project, which was earlier supposed to have happened in a subsidiary, Agrani and other things, will now happen in JK Lakshmi as 100% owner.
What it also means that the balance consideration, which out of the INR 325 crore was the transaction value for that deal. We had already paid based on the milestone achievement, INR 130 crore to be precise to the erstwhile owner, and the balance INR 190 crore was payable on the achievement of certain milestones in future. That would obviously not require to be paid in future. We get the two mines directly in our JK Lakshmi. The royalty is slightly higher. Earlier, it was INR 105 with escalation of 5% every three years. Now that has come to us at a royalty of about INR 251 per metric ton.
Okay.
That is the status. Once the land is in our possession, we will start placing the order immediately after the Durg placement. It will be a replica broadly from the Durg.
Okay. See, INR 130 crore, which you had paid to the erstwhile promoter, is there anything that you need to get this recovered? Because now it is happening directly under JK Lakshmi.
Yeah, we'll pursue with them. We are exploring that once everything is streamlined as per JK Lakshmi is concerned, we'll explore those legal possibilities of getting that money.
Sir, what will be the total project cost now when you're doing it on your own basis, and what will be the project capacity and total?
Nothing has therein. Project cost is not going to change. We have to firm it up. Actually, we'll be able to respond by next quarter, the exact size which we are going to put in as part of JK Lakshmi only. Earlier, we were toying with the idea of doing a 1 million ton clinker a nd 1.5 million tons. Right? That was costing about maybe between INR 2,000-INR 2,500. Now we will explore and then confirm, hopefully, when we have the con call for the second quarter meeting results, we will be able to confirm the exact size and the project cost.
Okay, great. Two more questions. First, could you share this non-cement revenue EBITDA? Second, what is the CapEx outgo with total on a consolidated basis for FY 2026, 2027, which you are looking at currently?
As far as that non-cement is concerned, it is about INR 144 crore is the total, what we have done in this, with an operating margin of 4%. Regarding your question of- We are doing in the current year, it is expected to be about INR 1,800 crore, FY 2026. Yeah, anywhere between INR 1,500 crore or so, then INR 1,800 crore, then again, INR 1,500 crore. That is what.
Sorry. For next three years, INR 1,500 crore, INR 1,800crore, INR 1,500 crore you guided?
Yeah. INR 1,500 crore, INR 1,800 crore and INR 1,500 crore.
Okay. Possible to share some breakup of this INR 1,500 crore? How is that split between the-
Broadly, it primarily will include the Durg expansion. The Northeast will happen maybe about six months later, but broadly, it will be Durg expansion.
Okay. This railway siding, which is pending of phase II, what is the status and how much CapEx is needed for it?
It is complete. Most of the expenditure has already happened. That should [inaudible]
The grinding unit, hopefully we will be announcing in this current ongoing quarter, the commissioning of that. So our capacity will be 18 million. Railway siding, as I mentioned, most of the CapEx has already happened. So marginal is there. First phase is already over. Some revamping of the line is required to be done, which we will do.
Great. The overhead conveyor belt, which was pending?
Yeah. That is also in the advanced stage of happening. SAIL Board has already approved.
This is lined to Ministry of Industries and Steel.
Okay.
I think that is final stages of approval now.
Is it more of a procedural delay now rather than earlier it was getting stuck because of the main approval?
Yeah, procedural delay because everything, major thing has already happened.
Great. Sir, just one last question. You are now present in almost all markets, barring South. West, you are already Central, you are there. East and even Northeast, you have your plans. So what is pending is in South market. Do you think you should be also looking into becoming a pan-India player over the next three-four years?
We evaluate various opportunities, and size has to make a sense to us. Because strategically, as of now, as you rightly said, we don't have a presence, so it will not be a strategic fit, but we explore.
Right.
There are some pluses and minuses for pan-India and being concentrated in a few region as we are today. But we always explore, and if it comes at the right price, obviously, don't rule that out. That is what I can say at this.
Okay. Great, sir. Thank you, and all the best. We'll come back into queue.
Thank you, Mr. Rajesh.
Thank you. Participants who wish to ask questions, please press star and one. Next question is from Ritesh Shah from Investec. Please go ahead.
Hi, sir. Thanks for the opportunity. Two questions. Sir, how should we look at the cost curve difference between North and East? If you could give some broad guidelines, that would be great.
North and East cost. Cost means what? Operating cost, you're talking?
Yes, sir.
So I think only difference is in the [inaudible] , because in North, we do use fuel. It is imported, like particularly pet coke and coal. Right? But in case of East, we have some linkage coal with us, right? More so, we are dependent on about close to 80% of renewable energy. So that is what the difference is.
Okay. And sir, from a logistics standpoint?
Logistics, I think our leads are lower than what we have in North and West, because we are very focused in the geography of Chhattisgarh where our plant is there, and we go to bordering areas of some neighboring states. So lead-wise, we are lower than the states of North and West.
Okay. And sir, would it be possible to indicate broadly EBITDA per ton differential between North and East?
Maybe I think latter we can, yeah. We do not have readily available with us, so we can come back to you on this.
Sure. Sir, my second question is, how should we look at the leverage profile? You did indicate broad CapEx numbers. Now, the reason to ask is, there were a few press notes about we looking for one particular asset in Southern India. Are there any broad guidelines on net debt to equity that we have in mind and we should be looking at?
We generally want to be conscious of our leveraging, whether in terms of the net debt to equity or net debt to EBITDA. As we speak, we have a net debt to EBITDA as of now of 1.5x. Generally, our endeavor is to keep it below 3x. But when we do go for the expansion as we are doing, at the time when we are nearing the expansion, the debt comes on the balance sheet, whereas the commensurate EBITDA follows one year, two year later based on the ramp-up which we are able to do from that expansion. So even if it marginally exceeds that level of 3x , but so long as the roadmap is very clear how it is going to taper down, we take a call on that. That is how we go about it.
Sure. Sir, just last, third quick question. Sir, any hopes on pricing to increase in North and West? Because structurally, these are far better, stronger demand-supply regions in contrast to what we are witnessing in South. So how should we look at pricing in North and West?
I think prices definitely will uptick going forward. Maybe we are through now the cyclicity of our industry, right? July, September typically is low in terms of demand. But my sense is, I think prices are definitely going to move upward, going forward.
Sure, sir. Thank you so much for the answers. I will join back the queue . Thank you.
Okay.
Thank you. Participants who wish to ask questions, please press star and one. Next question is from Milind Raginwar from BOB Capital Markets. Please go ahead. Milind from BOB Capital Markets, please go ahead with the question. There seems to be no response on the line of Milind. We will move to the next question. Next question is from Dharmesh Shah from JM Financial. Please go ahead.
Thanks for the opportunity, sir. Sir, my first question is with the merger of Udaipur Cement Works Limited and JKLC, how should we look at from a brand consolidation perspective? If there will be any brand consolidation or we will operate with all the brands?
Dharmesh, thanks for asking this question. As I said in my opening address that we are going to now continue with the two brands of UCWL, which is Platinum Heavy Duty and Platinum Supremo. Now, the strategy behind this is that we want to improve our channel reach, right? Because now these two brands are well accepted in various markets where we operate. We want to leverage those brands now and more so because now they have come under JKLC umbrella. That is going to give us a good leeway to really further expand this and reach out to more number of channels and improve our channel reach and volumetric reach. This is what the strategy is. In nutshell, yes, we are going to continue with these two brands.
Thank you. My second question is on this Northeast. I am not very clear the reason for increasing the royalty rate and how it will change the project IRR, because we are witnessing almost 2.5x increase in the royalty rate.
Royalty is based on the fresh tender, which was floated by this AMDC. The reserve price itself was INR 250 per ton. Obviously, it will on one side increase the cost of clinker because of the higher royalty, but more importantly, initial cost of the project comes down. Overall, there may not be much difference in the project IRR, including the initial, because we had factored that acquisition cost of INR 325 crore. That was for 85% stake and to buy back the remaining 15%, another INR 100- odd crore. To that extent, it goes down. On the other hand, the royalty increases, but that is futuristic. Because of the lower upfront outflow, the project IRR may not materially be so different.
Thank you. Thank you, sir.
Thank you.
Thanks.
Thank you. Next question is from Madhav from Emerge Capital. Please go ahead.
Hi. Hope I'm audible.
Yeah, very much.
I just wanted some thoughts on how do you view the increasing aggressiveness by Adani Group and UltraTech Cement, and how is the competitive landscape shaping up?
Competitive landscape has already stepped up, in fact. If you see the last trajectory of one and a half year, two years' time. This has stepped up in a way already. In fact, I think, you see, wherever we are there, we are a formidable player. We have good presence, very good network, good reach. I think we are equally competitive in those markets where big players are there. I will not name them, but wherever they are there, I think we are equally competitive. If you see our performance also, I think market share and whatever we had before, I think is in alignment with that. Competition is going to be there in the market.
It's all about how we are going to have our own strategy, which is going to really take on to those challenges and ascertain our objective. That is what we are doing, and this is what I think I told in the beginning also, that our much more focus on improving our competitiveness, looking inwardly, and I told you various actions which we are taking. Going forward also, I think we are not going to relent. We are going to further intensify our effort internally to be competitive in all those markets wherever we play.
Understood, sir. Thank you so much. Could you also just share some thoughts on the market share? What do we have currently?
So market share, I think in different markets, since we are not there everywhere, I think wherever we are there, I think we have a reasonable market share of about 10%-12% in all those markets. In Chhattisgarh and all, we have even 13%, 14% market share, right? In Rajasthan, we have a good market share. Gujarat, we are 13%, 14% of market share. All those markets, wherever we are there, I think fair market share, what our definition is, we should be more than 12%- 13%. In all those markets where we operate, we are having those kind of market share in every market.
Understood, sir. Thank you so much. That is all from my side.
Thank you. Next question is from Kamlesh Bagmar from Lotus Asset Managers. Please go ahead. Kamlesh Bagmar, please go ahead with the question.
Yeah, thanks for the opportunity, sir. Just referring to some media news saying that we are in the race for Deccan Cements. Just wanted to know the. I know that you have articulated to the exchange saying that we assess all those opportunities, but anyways, just to have some sense, why we want to be in the South market. If we see last six, seven years, say barring Udaipur, we have not expanded capacity in the North market, which is the most important and most efficient and high-yielding market. If we see over the last six, seven years, the way the Wonder Cement has come in or various other players have come in, we are not able to scale up in that market in such a way. So why not proceeding with expansion in the North market and prioritizing or moving to the South market?
Yeah. North, anyway, we are expanding. We have already added about 2.5 million tons on last 28th of March 2024. It is not that we have not added capacity in North. In fact, we have done some kind of debottlenecking also, 0.6 million tons at Udaipur itself, close to about 0.3 million tons at Sirohi. Idea was that, let us exhaust our capacity first than to move on to next expansion. That is what we have done. Now, since after Udaipur, anyway, in the pipeline is Nagaur. We have mining leases licenses with us, and we have already started acquiring land, getting approvals, and we do have plan to set up a 3 million ton plant out there. North is very much focused in our core .
North, we are going to be a very formidable player. If you look at North, our installed capacity in North itself is close to 10 million tons, which is none less than even the bigger player in that market. Yeah. That is going to be our focus. That will remain our focus even going forward, one. Second, you asked about exploring other markets. In Northeast, we are not there. As an organization, we do kind of have a look at our future canvas as to where we want to play. We felt that Northeast is a good market where we should be in, and that is what we are trying to be there. In East, I told you that our capacity utilization has reached to a level. Now we have a good plan of 4.6 million tons a year.
There we want to consolidate our presence. Similarly, wherever we feel that any opportunity which comes on our way, be it brownfield or greenfield, we definitely evaluate and we take a very conscious and well deliberate and thoughtful decision as to how much we need to go there and to what extent we can play. That exercise as an organization, anybody would be doing, and that is what JK Lakshmi Cement as an organization, we are doing. Even going forward also. We will look at all opportunities. We have a clear cut road map of 30 million tons by 2030. The way we are moving, we will definitely achieve that as well.
It is not that we are definitely, we are through with all those utilization of capacity, then going forward we will have that kind of growth ambition as well.
Sir, what is the status of land acquisition at Nagaur plant? Sir, because honestly, the way the competitors like Shree Cement, they came out with Nathdwara, their plant at Nawalgarh. UltraTech also came in. Then JSW, like say they are putting up or they are about to commission the plant in next six months. The aggression or the speed which the other players have shown in adding capacity in the north market and with the focus, we are honestly missing on that particular part, at least in the north market. So, on that line, sir, what is the status of that Nagaur plant acquisition or land acquisition?
Nagaur, we have two mining lease licenses. In one, I think we are almost through with all those approvals. Right? So, I think we are almost there where we wanted to be. In case of other mines, we have some exchange of land, like gauchar land and forest land, which we are in the process of now exchanging. So that process is on. Okay. Plant land, we have already identified that, the place, and part of land acquisition we have already done. Right? So, we wanted to first kind of ensure that all those prerequisite approvals for limestone mining is in place. That we have done in case of one mining almost. Second, in case of second mining, yes, we are in the process of some of the more steps which we need to take. And land, we have already identified place and we have started acquiring land.
So this is what the status as of now is. Hello. Hopefully we are audible.
Yeah. Sir, on the Saurashtra. We have also one mine in Saurashtra as well. Any update on that land acquisition?
Saurashtra, in fact, I think we are ahead of Nagaur also in terms of acquisition. Public hearing is already done. Environment clearance is in process. Land acquisition, almost I think government land we have already obtained. Some rehabilitation has to be done. So there, I think we are in the process of rehabilitating some of the people who were there on the land. Kutch, I think from mining side of it, I think we are almost through.
Okay. Thanks a lot, sir.
Yeah. Thank you.
Thank you. Before we take the next question, a final reminder to participants that you may press star and one to join the question queue. Next question is from Shravan from Dolat Capital. Please go ahead.
Hi, sir. A couple of questions and clarifications. Sir, first, Durg expansion you said, clinker is there and obviously 1.2 million ton grinding will be there at Durg. But 1.2 million ton you said Madhubani. I think it was Prayagraj which will come first. Correct me if I am wrong.
I think these two sites are ready almost in terms of land acquisition. Both the places I think we have plant land is in place. In case of Madhubani we already had this public hearing and we have applied for TOR and environment clearance we are going to take now very quickly, right? Madhubani is ahead of Prayagraj as of now. That is what we mentioned that Madhubani may come little earlier than Prayagraj.
Earlier than Prayagraj.
Okay.
Yeah.
Okay. Madhubani should be start by this March 2026, and then the Prayagraj and Patratu both will come by March 2028 or possibility will both come by September? Next year.
Patratu will come around March 2028. Along with Durg, at least Durg grinding station along with clinkerization and one grinding station by March 2027.
Okay, got it.
Somewhere around mid of March 2027 and March 2028, we will have Prayagraj. Maybe September, October kind of thing event.
Okay. Prayagraj would be September, October next year. Okay, got it. Second, sir, couple of data points for us are what was the CapEx in the Q1 and what was the RMC revenue?
RMC, CapEx first quarter was about INR 100 crore. Separately out of 144 crore, you wanted the RMC w as about INR 70 crore.
Okay, INR 70 crore. Sir, in terms of last time we said in terms of the cost reduction, INR 100-INR 120-odd per ton for next 12-18 months. That still remains intact?
That still remains intact, yeah.
Okay. Got it. In terms of the, despite that we have done a 100-odd crore CapEx, we are kind of confident that this INR 1,500 crore CapEx, we will be able to do in INR 1,400-odd crore in this remaining nine-odd months.
Yeah.
Okay. Sir, just two things wanted clarity now as we restated the tax particularly and the PAT because of the UCWL merger. Is it possible to share the tax for Q2 and Q3 of FY 2025 or maybe a PAT number?
Tax you wanted to know. Tax, we have already switched over to the new tax regime, so whatever profit we have, going to have in subsequent quarters, we will have to pay 25-point-odd percentage as per the new tax regime on that.
No, that I understood. What I am trying to say for FY 2025, we have restated the console tax and PAT number. So Q1 and Q4, FY 2025, we have the number with the results.
Right.
But Q2 and Q3, if possible, if you have, if you can share, would be helpful.
For the past?
Yeah, for FY 2025.
FY 2025 I can separately provide. I do not have it readily for the four quarters as of now.
Okay. Yeah, no issues. Just one thing, wanted a clarification, sir. Did we organize a plant visit in this quarter for buy-side?
Yeah. Mr. Vaibhav had advertised a lot over that plant, which he's invited the participants to go for the plant visit. He had organized that.
Yeah, because it was not there announced on the exchanges, so that's why just wanted a confirmation.
It was put there. I am not sure. Mr. Vaibhav had talked to various people whom he thought was he had spoken to, I think, all the institutional players. So obviously, maybe you must have missed it out. Others had been able to join.
Thank you. Next question is from Nidhi Hasija, from Goldman Sachs Asset Management. Please go ahead.
Yeah. Hi, sir. Congratulations on the good set of numbers. Just one clarification. On the Durg plant, our CapEx number seems to have increased from INR 2,500 crore to INR 3,000- odd crore. Can you let us know what led to the CapEx increase in one quarter?
There were certain additional equipment we had talked of, which were not earlier, including the triplex, et cetera, plus some cost escalation going forward. That was about one year back that we had estimated it, so no matter in that.
Okay, understood. Thanks.
Thank you.
Thank you. Next question is from Milind Raginwar from BOB Capital Markets. Please go ahead.
Hello.
Yeah, Milind, please go ahead. We are able to hear you now. Earlier you were not able to put your [inaudible]
Thank you, sir, for this opportunity. First question is, what was the cement revenue for the quarter and the base quarter?
We have given separately for INR 144 crore for the value-added product.
Value-added product.
The remaining is all cement, and the corresponding quarter was INR 132 crore.
Okay. Fair. The second question from my side would be, the freight cost on a per ton basis that is showing some escalation. Any specific things that you want to call out on that as to why would that be on an inflationary side?
Yeah, I think that is what I mentioned, in fact, before. Right. Yeah. It has gone up a little bit. If you look at quarter four, loop lead was 393 km, it has gone to 399 km.
The reason I mentioned that we are trying, and we are in fact feeding those markets where we are going to be present in the coming maybe a year or a year and a half. We have started kind of feeding those markets and creating our brand awareness so that once we have plant there, then we can quickly ramp up. That is why it has gone up a little.
Okay. That is the only specific reason. The increase in the lead is the only reason for the increase in the logistic cost. Is that what we should think?
[inaudible] I think is our intent.
Okay. Any specific reason for we seeing the other expenses on a higher side again, on a year-on-year basis?
That is basically because of the increase in the volume. It is not 100% fixed cost. With the volumetric increase, it is there.
Okay, there is nothing specific beyond volume side that we have something loaded in the June quarter in terms of expenses?
Yeah.
Okay. Thank you, sir.
Thanks.
Thank you.
That is it from my side.
Thank you. Next question is from Uttam Kumar Srimal from Axis Securities. Please go ahead.
Yes, sir. Thanks for the opportunity and congratulations on a very good set of numbers. Sir, my question pertains to your total debt profile. So what is the consolidated gross debt currently?
That is there in our presentation which we have uploaded on the website.
Sir, that is standalone you have given.
Now it is consolidated because now UCWL has merged. There's nothing called standalone or consolidated. It is all together.
Okay. And sir, how much debt we are going to take this year to finance the expansion project?
Sorry, come again.
How much debt we are going to take this year to finance this ongoing expansion?
We have talked of a CapEx of about INR 1,500 crore in the current year. For that, we may take INR 1,000 crore additional debt in this year.
Okay. Sir, with regard to pricing, how is the current pricing compared to Quarter one [inaudible] prices?
Pricing more or less stable, but non-trade has gone down little bit in some markets. Like in case of north and even in east. West, trade and non-trade, both prices have gone down little bit. So prices have gone down little bit than what we had in last quarter. If you compare this with exit, then yes, at least June, I see that prices have slid a bit.
Okay. Sir, with regard to premium cement, this quarter it has come down to 23% compared to 25% last quarter. Where do you see this premium cement as growing this year?
Sorry, come again.
Sale of premium cement has come down this quarter compared to last quarter as a percentage of overall trade sales. Where do you see the percentage of premium cement as a percentage of trade sale growing this year?
Our target is to reach to minimum 27%+ premium cement. What happens is when your volume goes up, then in that proportion, I told you that in some market where we have ventured into, we have sold a base product, and that is why premium percentage has gone down. But in all those markets where we are their core market, our premium proportion is intact. But newer market, I told you that U.P. East market and part of central market where we have gone, premium product has not done that well. Nevertheless, I think our plan is to take it to 27% by end of this year.
Okay, sir. That is all from my side, and wish you all the best.
Thank you. Thank you so much.
Thank you. Next question is from Parth Bhavsar from Investec. Please go ahead.
Hi, sir. Sir, I have just one question. This cost savings of INR 100- INR 120 per ton, can you tell us from what and which initiatives, be it renewable energy or whatever. What sort of CapEx are we putting in, and how would the renewable energy move in terms of capacity over what period? Or if there are any other levers as well?
Renewable, we are there at 49% now, and we do have plan wherever we have possibility, we are enhancing that. Like in Gujarat and in Rajasthan, we are improving our renewable portfolio. We see that our renewable portfolio will go around 52% in this year. This is one initiative of course, I think is going to give us some kind of saving. Second, I told you that TSR or AFR, which we are using in our integrated units, from there also we are going to have saving. Third, on manufacturing area, we are initiating some AI-led initiatives in our manufacturing process. We'll have some saving in the power and fuel also once we deploy that. I think this is in the manufacturing area. On top line, I told you that further consolidating our newly rejuvenated brand, which we call Green+.
And of course, I think just now I replied on premium products, so that is another area on top line. Improving price positioning further, so that is the third one. So these are the initiative on top line part of it. And of course, I think supply chain remains a constant factor whenever it comes to drive efficiency. So there also, we have planned to further improve our direct dispatches, work on different modes of transportation to reduce distribution cost, reduction of lead. So this is what the initiative which is in our sight in case of supply chain. So these are the three major areas where I think, where from this INR 100+ saving is going to come in the next 12 to 18 to 24 months time.
Okay, sir. That was my question. Thank you so much for answering.
Thank you. Next question is from Amit Murarka from Axis Capital. Please go ahead.
Yeah. Hi all. Thanks for the opportunity again. So just coming back on CapEx. So you mentioned, I think INR 1,500 crore this year, INR 1800 crore and then INR 1,500 crore. So could you also provide a split of it between Durg and Northeast? How will that be split?
Basically, we are talking of about INR 3,000 crore of Durg, and balance will be Northeast.
Oh
Then maintaining CapEx of about INR 70 crore- INR 80 crore every year.
INR 3,000 crore over next two years or three years?
Yeah. Three years.
Three years. Okay.
We started acquiring land both at Nagaur and Kutch. A bit will go in there also.
Sure. Why I asked is because Northeast, what I understand, is still going to take a bit of time to figure out.
It will not take that much of time. It is almost there now. This CapEx number which we have given for the three years includes three basic things. One, the Durg expansion, two, the Northeast, and three, the land acquisition at Nagaur and Kutch, and the other normative maintenance CapEx.
Okay. Sure. Also lastly, I do not have the number of FY 2025. What would have been your split for clinker and cement sales in FY 2025?
FY?
2025. For full year FY 2025, how much was the clinker sales that you had done?
For the full year?
Yeah
Total, we had 121 lakh tons. Out of that, 7 lakh tons was the clinker. Balance was all cement.
7 lakh tons. Okay, got it. Thank you so much.
Thank you. Next question is from Ritesh Shah from Investec. Please go ahead.
Yeah. Hi, sir. A couple of questions. First is, for the East expansion, do we have any incentives in place?
Yeah. So East also, they have some incentives. Since we are in the initial phases of our preparedness, we are going to approach to government. So they do have some incentive, and we will try to obtain some customized package also, if possible.
Okay. And sir my basic question-
But-
Yes.
Yeah. Go ahead.
Sorry, sir. Carry on, sir. Please.
No. Specific number, I think I will not be able to put now. Once we approach them and then come back as to what we are going to get.
Okay. Sir, my second question is, we have optionality in Northeast. You indicated Nagaur. We have a lease in Gujarat. We also have something in Madhya Pradesh. Sir, how should we look at it? After Durg, what is it that we are looking at? Is it Northeast, then Gujarat, then MP? What is the thought process? If you could marry your answer with the limestone lease expiries that we have specifically in Rajasthan. I do understand that we have one leases in Nagaur, but I think the premium over there is quite steep. I think similar thing is also for probably for Central India as well. Sir, how are you looking at incremental growth, and how are you marrying it with the cost curve increase that we will potentially see?
Broadly, you have answered your question in your question only. You are right. We are first targeting Durg expansion, followed by Northeast, then Kutch, and then Nagaur in that order.
Okay. Sir, on the lease expiry, how should one understand?
Yeah. Our Sirohi mines will go for re-auction in the year 2030. This is one thing which is there. A couple of years later, Udaipur also. This is the phenomenon for all across India, you know that. A lot of mines are going for re-auction in the year 2030. One of our mines, of course, I think is part of that. Yeah.
Okay. Sir, just a simple follow-up. Would it be possible for you to quantify how much can be the peak cement and clinker capacity, first in Northeast, then in Nagaur, then in MP, and then in Gujarat? Just trying to appreciate the growth pipeline that we have which can unfold over next, say 5-10 years.
We are starting with the Durg, where we are going to add about 2.3 million tons of the clinker. And 4.6 million tons cement. In the next quarter, we will be able to definitely, for sure, tell what will be the size to start with at the Northeast. As regards the Nagaur and Kutch, they are still far away. But you can broadly say 3 million tons each for Kutch and Nagaur. Northeast is the only thing which we need to finalize on the exact size of both the clinker as well as the grinding capacity, which hopefully we will be able to firm it up by next quarter.
Sure, sir. This is very helpful. Thank you so much.
Thank you.
Thank you. Due to time constraints, we will be able to take one last question. We take the last question from Rajesh Ravi from HDFC Securities. Please go ahead.
Hi, sir. Just a follow-up question. In the press release, there was this Northeast expansion cost increase from INR 2,500 crore to INR 3,000 crore?
Yes.
Any specific reason? We do not see any commensurate, any increase in the capacity.
As I mentioned in response to a query from earlier question-
Okay. Uh-huh.
We had to do some additional equipment like triplex, et cetera. We have also added railway siding at the three grinding units, which were earlier not part of that.
Okay.
That is the has gone up from INR 2,500 to INR 3,000.
Okay. That will only increase the efficiencies of these assets.
Absolutely.
Okay. Right. When you mentioned the total project CapEx for next three years around INR 4,800 crore, I understand INR 3,000 crore is being earmarked for the eastern expansion.
Yes, Durg expansion.
Durg expansion.
Yes.
And if I look at maintenance, it would be close to INR 300 crore.
Yes.
How much you are factoring in for the two land acquisitions at Nagaur and Kutch? How much we have already spent for the Northeast expansion so far?
[inaudible] is already there. So it is announced. So Nagaur and Kutch may be there. That may be not for a very high figure. Balance would go for the Northeast.
Okay. How much we have spent for the Northeast project till FY 2025? Not Northeast, sorry. East project.
East project. For Durg?
Yeah. Durg, out of this INR 3,000 crore.
INR 80 crore.
Sorry, I did not get you.
INR 70 crore- INR 80 crore only.
Only INR 70 crore- INR 80 crore. Okay.
Yes.
Northeast, whatever you have just paid to INR 130- odd crore, is all that-
We have spent about INR 80 crore-INR 90 crore on land, on that we have already done.
Okay. That's INR 130 crore.
Yeah.
Okay. Great, sir. That's all from my end. Thank you.
Thank you.
Thank you very much. We will take that as the last question. I would now like to hand the conference back to Mr. Vaibhav Agarwal for closing comments.
Yeah. Thank you. On behalf of PhillipCapital India Private Limited, I would like to thank the management of JK Lakshmi Cement for the call, and also many thanks to participants joining the call. Thank you very much, sir. We will now conclude the call. Thank you.
Thank you.
Thank you, Mr. Vaibhav. Thank you everyone.
Thank you very much. With that, we conclude the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.