Ladies and gentlemen, good day and welcome to JK Lakshmi Cement Limited's quarter and year-ended March 31, 2024, conference call hosted by PhillipCapital India Private Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal an operator by pressing Star then Zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital India Private Limited. Thank you, and over to you, sir.
Yeah. Thank you, Michelle. Good evening, everyone. On behalf of PhillipCapital India Private Limited, we welcome you to the earnings call of JK Lakshmi Cement for the quarter and year ended March 31, 2024. I need to highlight that JK Lakshmi Cement is also the holding company of its listed entity, Udaipur Cement Works Limited, and therefore this call is also open for discussion about the performance of Udaipur Cement Works Limited.
On the call we have with us Mr. Arun Kumar Shukla, President and Director, and Mr. Sudhir Bidkar, CFO at JK Lakshmi Cement. I would like to mention on behalf of JK Lakshmi Cement 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 based on current expectations.
These statements are subject to a number of risks, uncertainties and other important factors which may cause 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. I will now hand over the floor to the management of JK Lakshmi Cement for the opening remarks, which will be followed by an interactive Q&A. Thank you and over to you, sir.
Yeah. Vaibhav, good afternoon to all of you, and thanks for attending this call. We hope, I think you must have gone through our presentations, which we have already uploaded over the website. Thanks. But before that, I think I'll give you a brief glimpse of what has happened in the quarter 4 of last year and also for the whole year.
So we have been through a very good journey at JK Lakshmi Cement and Udaipur Cement Works Limited with respect to the progress which we have made. As I said around a year back or even more than that we are trying to bridge our gap with respect to our competitors in terms of EBITDA per ton, and that is what I think we have been trying to do for the last 18 months or so.
In my earlier conversations and during meeting with you, I have told you that what all areas we are working on, and perhaps all those things are very directional and we have started getting advantage out of that. That effort has resulted into bridging our gap with respect to EBITDA per ton with respect to competitors.
Quarter 4, if you see, I think yes, our volume is little bit on a lower side, primarily because of the fact that we have reduced our volume from our outsourced unit and also our focus was really kind of improve our efficiency across the value chain. In terms of renewable energy, we have progressed very well. Q4 , we are at 47% at the group level and individually at JK Lakshmi Cement and Udaipur Cement Works Limited, we are at 39% and 46% level.
Renewable energy also we have progressed very well. On AFR front, which is one of our prime focus area with respect to manufacturing cost, there also we have progressed very well. Last quarter we have closed our TSR at 7% which was 4% last year. If you look at quarter 4 alone then our TSR was 11.27% including JK Tuna and Durg.
On premium product front also we have progressed very well. East I think where premium segment is on little lower side but west and north where sizable premium segment is there, our premium proportion is more than 25% in these two markets. On supply chain, we have progressed on reducing our lead. Lead is at 332 kilometers at the end of quarter 4.
If you look at last year, I think our lead reduction is more than 25 kilometers. Along this supply chain also we have done quite a bit on improving our direct percentage, then using technology to improve our customer experience. This is on supply chain part of it. On project front, first phase of K5 we have already concluded, which I told you during our last conversation.
Udaipur Cement Works Limited, we commissioned our grinding station of 2.5 million ton on 28th of March 2024. Durg railway project first phase we are going likely to conclude very soon. We have already started loading clinker from that site to our different locations for selling as well as transferring clinker to our grinding station. This is on project front. What else? I think this is what I think I'll just take few questions.
If anything I missed out, I just wanted to give you a brief as to how we have progressed. You have seen our EBITDA per ton last quarter and we are happy that whatever actions we have taken, we have been on the right track. For now, I take a pause and I wait for your questions. Our CFO, Mr. Bidkar, and I am here to answer your questions.
Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touch tone phone. If you wish to withdraw yourself from the queue, you may press star and two.
Participants are requested to use only handsets while asking a question. You may please press star and then one to ask questions. The first question is from the line of Rajesh Kumar Ravi from HDFC Securities. Please go ahead.
Hi, sir. Good evening and congrats on good set of numbers, predominantly on the margin front. Third consecutive quarter of good performance. Hello, am I audible?
Hear you very much. You're clear.
Sure. Sir, could you discuss on first the expansion plans, how would this Surat expansion, and then what are the plans on the east expansions, and also touch upon what are the thoughts on the northeast expansion, what sort of CapEx and expenditure you're looking for the northeast expansions in FY 2025, and what is your plan for next two years in terms of Because you're looking at 30 million tons by FY 2030.
Thank you, Rajesh. As far as Surat grinding unit is concerned, we are doubling the capacity from 1.5 million to 2.7. That is on stream, going as per the original schedule. As regards the expansion in Durg, we are talking of a 2.3 million clinker and a 4.6 cement capacity.
There we are talking of one three-split location grinding unit and one grinding unit at the integrated plant in Durg. That will cost us close to about INR 2,500 crores. We have, in the first phase, we will go with the clinkerization plus grinding unit in Durg, that is the integrated plant, and in U.P., Prayagraj.
Okay.
It will have the other split located grinding units in Jharkhand and Bihar.
Mm-hmm. Udaipur, when are you looking in Surat, the expansion this year only, FY 2025 it will be operational?
Yeah, towards the end of-
Last quarter.
last quarter, yeah. As far as the first phase of the Durg is concerned, that is FY 2026 towards the end, and second phase towards the end of FY 2027.
Okay.
The cost, it is about INR 225 crore for the Surat grinding unit and INR 2,500 crore for the Durg expansion. The northeast project, we are presently in the process of acquiring land, so it is still some time away before we can talk of the exact timeline for that project there.
Mm-hmm. This INR 330 crore is already paid for the acquisition?
No, we have not. That is being phased out. We have paid about INR 125 odd crore only.
This INR 1,500 crore includes everything, or this is over and above this INR 330 crore?
This INR 1,500 crore is for the project. This 325 would be over and above that.
Okay, so around INR 1,800 odd crore. Is it fair to assume that this will get commissioned, if at all, by FY 2027 and/or FY 2028 because it is a greenfield project?
That will take some time. I am not able to give a timeline because we are working on those external approvals like land acquisition, environmental clearance, and all that. Once those are in place, then 2 years thereafter, we should target the start of the greenfield.
Okay. Coming back to the operations, could you give the RMC revenue, non-cement revenue, and EBITDA for the contribution in Q4?
The non-cement revenue was-
INR 154 crore
in this quarter were INR 150.
154.
Yeah, INR 154 crore.
RMC is how much in that?
RMC is INR 86 crore out of that, INR 21 crore is UP and
Okay. And EBITDA margin for this non-cement revenue would be around 4% or better than that?
Five.
How much?
5%.
5%. And sir, how are you looking at this Gujarat market? I just wanted to ask because this is a very critical market for you and in your mix also. You have been guiding that you are making good profitability in Gujarat market.
So any views given that Ambuja is ramping up its plant in the Sanghi unit and would be selling under ACC and Ambuja brand. So what is your thought process? Do you see pricing erosion and that could have a bearing on players like you because for you, Gujarat is a big market in terms of your total volumes.
I know. As I said before, I feel irrationally how market is. And I believe that actually, market is not going to behave, right?
I'm sorry to interrupt, sir, your voice is breaking.
As the-
Sir, your voice is breaking.
Audible? Now audible?
Yes, sir. Can you please repeat?
Yeah. What I said is that west market is not going to behave irrationally, because as a rational person, I believe that market is going to behave rationally, and therefore is not going to be, no illusion or, I would say, disruption with respect to the pricing trend. Right? That happens everywhere, not only for west, everywhere. That is what still I believe, and we are discussing this for the last maybe two, three quarters.
But trend is not much of a change. The west is behaving the same way as other markets are behaving. Be it north, be it east, or even other markets then. Yeah. Kind of radical change in terms of price dynamic.
Okay. Okay. Lastly, in FY 2020, from Q4 onwards, what was the fuel cost
I am sorry to interrupt. Mr. Ravi, could you please hold the line?
Sure.
I request the management to just disconnect and connect back. Sir, I will disconnect your line and connect you back as the audio is breaking right now.
All right.
Thank you, sir. Ladies and gentlemen, the line for the management has been reconnected. Over to you, sir. Mr. Ravi, can you please go ahead with your question now? Mr. Rajesh Kumar Ravi?
Hello, am I audible now?
Yes, sir. Please continue.
Sir, what are the cost levers you are looking at in FY 2025, in terms of fuel and other efficiencies, versus FY 2024?
So, one of the major cost driver for us would be improving TSR. As I said, that last quarter our TSR was 11.27%, and FY 2023 it was 4.11.
Oh.
Last quarter was 7.01. I think this is going to be one of our major driver for improving efficiency, one. Second, we are also working on further improving our renewable energy proportion.
As I said that quarter 4 we were at 47% of renewable energy.
Right.
We are planning to enhance our capacity on solar. We are working on that. Another 7 MW at Sirohi. Then I think we are working at other locations also. That is still under planning, so maybe next time I will tell you. Solar is another area where we are going to work. This AFR facility at Udaipur also will get commissioned during September.
Okay.
We have not yet commissioned, so that will also get commissioned. This is going to be TSR, and renewable energy is going to be a major driver as far as cost goes. Apart from that, all those cost levers, because we are heavily working on digital and technology.
How we are going to really improve our efficiencies across plant operations, that is what we are working on. We are working with some organizations also to really come out with some kind of digital solutions. These are the major activity as far as cost goes.
Question, this TSR at more than 11%, sir, how is your costing per kcal versus your normal fuel cost? Because blended you are close to 1.7 or 1.8. So, increasing the TSR, how is that helping on terms of costing also, sir? I understand it is helping your green mix portfolio.
The cost of AFR is about INR 1.2 now. That varies across locations. East it is little on the higher side, and in north part of it is on lower side. On an average you can take about INR 1.5, INR 1.2. Whereas if you take conventional fuel, then it's about INR 1.8 plus, because blended is about INR 1.68.
Saving for everyone. Okay.
That's the saving we have.
Last thing, what was the trade-
I think also, we are a very responsible corporate, and we are committed to be carbon neutral by 2047. So in a way, this is also going to help us to reduce our carbon footprint. So over a level, cost efficiency also kind of renders our responsibility towards our commitment to mitigate carbon footprint.
Sir, how has been the trade and blended share in Q4?
Yes. Trade was 56% and blended, 66%.
56% and 66%.
Yes.
Okay, great, sir. I will come back in queue. Thank you. All the best.
Thank you.
Thank you.
Thank you, sir. Participants, you may please press star and then one to ask questions. The next question is from the line of Mangesh Bhadang from Centrum Broking. Please go ahead.
Good afternoon, sir, and thank you for the opportunity. Congrats on good set of numbers. Sir, my question is related to the volume. We have had flattish volumes at consolidated level, and we have commissioned our Udaipur clinkerization unit in October. Just wanted to understand, have we done any clinker sales from that plant, or what kind of contribution or utilization that plant would have had in this quarter at the consolidated level?
Yes. Yes, since we commissioned our grinding station during end of March 2024, and we commissioned our clinkerization unit in October, yes, we had some excess clinker with us, which we sold in the market. Right?
Capacity utilization at UCWL. What is it? Yes, I will just let you know.
Sure.
Clinker as well as cement. Cement, I think anyway it was not there. 50%. 50% is cement.
Okay.
Cement was 90% last quarter.
Last quarter.
Last quarter, 90%, and clinker, 92%. Clinker. Just hold on. We will just let you know.
Sure. Basically, the next question was, have we capitalized any costs related to Udaipur Cement Works in this quarter?
Sorry, I will come again. I just missed your question.
Have we capitalized any costs related to UCW in this quarter?
No. Capitalization was only up to the period of implementation. Other than that, there is no capitalization.
Okay. Great. Sir, secondly, we have seen substantial improvement in our costs over the past couple of years. I just wanted a couple of the actual operating parameters, like what is the change in the specific heat consumption of the kiln as well as the electricity consumption per, say, ton of cement. How have these parameters changed over the last two years? Definitely, with the new kiln coming up, there should be an improvement. What kind of numbers we are expecting on that side?
Okay. Our cost last quarter, consolidated level, if you look at, 5.3. Our power cost was 5.3 and, of course, the per kcal cost was 1.68. Right?
So electricity consumption, not in terms of rupees, in terms of the units per ton of production. Units were required. So around 73, 74. How it has changed?
Yes. 69 units per ton of cement.
Okay. Great. Okay, sir. I will come back in a little while. Thank you.
Thank you.
You may please press star and then one to ask questions. The next question is from the line of Prateek Kumar from Jefferies. Please go ahead.
Hello. Yeah, good afternoon, sir. Congrats for good results. My first question is on your, I mean, you talked about CapEx, but just can you repeat your CapEx numbers expected for FY 2025, 2026? Total CapEx numbers including projects, working project or other maintenance CapEx.
Yeah. You want for the next year, no?
For FY 2025 and FY 2026.
Yes. Yeah. FY 2025 rather, including the Durg expansion, we would do close to about INR 1,200 crores which will include about INR 600 crores on Durg expansion and including a normal CapEx of about INR 50 crores. FY 2026 would be another INR 1,000 crores.
Okay. You said INR 1,800 crore in between earlier in the call.
Sorry?
Earlier in the call, you said INR 1,800 crore CapEx for FY 2025.
That was only for northeast. That is separate. That is over three, four years. You are talking financial year-wise, no?
Okay. That was for northeast CapEx. Okay.
That was INR 1,800 is for the northeast, which includes INR 1,500 for the project and INR 300, that is only for northeast. This INR 1,200 crores which I am talking is only in JK Lakshmi. That is another company.
Right. Okay. On the opening remarks, you highlighted some reasons for volume loading store. Can you highlight those again? It was not very clear.
Volume, I said that if you look at consolidated level on FY 2024, we grew by about 5%. If you look at quarter basis, then we are almost flat. The reason which I mentioned was that we have reduced our sales from some outsourced units, and I will just tell you a little in detail. We had one outsourced grinding station in Punjab.
That was taken over by some other players, so we had to stop selling from that grinding station. We also reduced our volume substantially from Amethi outsourced plant because the kind of margin of profitability we wanted, I think that was not coming. That was second. There were other sources where our volume off-take was low, and that was a deliberate one. That was one reason why volume is low.
Second, I think all of you should understand, if you look at Q4 , only JK Lakshmi Cement standalone, our utilization was 89%. If you look at 65, 35 kind of ratio or 66, 34 blended versus OPC. This is the optimal, what we could have sold. I think we have utilized our full capacity given the product mix which we have.
If you look at overall basis also, our capacity utilization was 81%, which is above industry average. Again, I'll go back to that rationale that our looking at the product mix which we have, that is what we could have done, and that also includes that July, September month, which is cyclically low in demand.
That is why our volume was on lower side. In fact, in Quarter 4, we were lacking volume. We did not have volume to sell. Demand was there. If you look at Udaipur utilized 90% of capacity. JK Lakshmi, 89%. I think this is what I think best you could have done.
Sure. Okay. What would be your FY 2024 year-end capacity is 16.5 million ton, as I guess. 14 earlier and 2.5 was commission, consolidated capacity. What would be year-end capacity of FY 2025, 2026?
2024, 2025, you're asking, right?
Yes. FY 2025 and then FY 2026.
Yes. I think we have taken a ramp-up plan. Based on that, we will definitely achieve on an overall basis, console basis, 70%, and then next year on, 80%. That is what we have said. Because 70% includes that 2.5 million additional capacity, which we have already put up, and 1.35 also, which will come during last quarter of this financial year.
In FY 2026, 2.4 million ton capacity will come at East locations.
Okay. FY 2026, I think we will have full 1.35 million ton from Surat. We will have, of course, I think, good capacity utilization of Udaipur also. Udaipur line 2.5 million ton.
Sure, sir. I will get back to the queue. Thank you.
Any clarification you can. So overall basis, you just remember 2 figures, 70% and 80%, this is what we are targeting.
Thank you. You may please press star and one to ask questions. The next question is from the line of Praveen from Anandam Enterprises. Please go ahead.
Yes, thank you for the good duty, ma'am. My first question is, what is the current status of conveyor belt at Durg, and when it will be completed?
Conveyor belt, the status is, as you know that this five conveyor belt passes through a stretch of land which belongs to Steel Authority of India Limited Bhilai Steel Plant. We are pursuing this matter with them, and that is on the final stages of approval. We can get this approval in the next maybe a month or so.
Once that approval is in place, we will start working on that. But in parallel, we have already started kind of getting ourselves ready. Once we have this approval in our hand, we will just right away start working on that. I think maybe a month or two, we need to wait for approval, and then maybe another six months we will take to put this online.
Okay, sir. Sir, my second question is, what is the current capacity utilization of Udaipur Cement's new greenfield plant of 2.5 MTPA?
Current, I think we have just started in maybe in April, I think, let's say. It is about 40% around.
Okay, sir. Sir, my third and last question is, how much sale you have reported from contract manufacturing sale, and where do you report it in this sale?
We have not-
We have not reported any.
That volume we have not included.
Sorry, sir. Can't hear you properly.
So unit volume is not part of the volume which we have reported.
Okay, sir. Thank you, sir. That is all from my side, sir. Thank you.
Thank you. You may press star and one to ask questions. The next question is from the line of Uttam Kumar Srimal from Axis Securities Limited. Please go ahead.
Yes, sir. Good afternoon, sir, and congratulations on the set of numbers. My question pertains to pricing. How is the current pricing in the region where we are operating in the west, east, and north? Further, second question is on power and fuel. You said our kcal cost is INR 1.68. So any further reduction we are expecting in ongoing quarter?
Yes. First question first. You asked about-
Pricing question.
On prices, right? I'll just take you a back, a little back. If you look at Q4 , prices went down by about close to 5% with respect to the preceding quarter. Right. If you look at whole year prices, the kind of data we have with us, price has dropped by about 1.5% if you compare that with FY 2023. Okay?
Prices have gone down, and I think all industry players, they have worked on taking advantage of softening fuel costs and other efficiencies which we have been driving in our organization. Right. Price trend has not yet reversed. The kind of trend which was prevailing in the Quarter 4 of this last year, that still persists, and that is because of the fact that we are through this national election.
Once that election is over and results are out on 4th of June, demand will improve. Demand is on lower side, one. That is triggering not a very good moment in price trend upwardly. In fact, prices are either going down or prices are stable in some of the markets. Price-wise, I think things are, I would say as it is, as it was there in Q4 .
Demand is on lower side. That is what the state of the affairs today. But I see that once elections are over, Q2 is going to be little better than Q 2 of last year. Once demand improves, then prices also will inch up. This is what I believe, because that is a good dynamics of demand and price. Since demand is low, prices are under pressure. Once demand improves a bit, definitely prices also will go up a bit.
Okay. Sir, with regard to power and fuel, any further decline we are expecting in terms of kcal cost?
No, I don't think so, because if you look at international prices of pet coke and imported coal, that is in fact going a little bit upward. From the fact that we do have some supply chain issue because of the conflict geopolitical situation which is there. Right. I don't think that is going to go down further. Maybe this is going to be range bound. It will go little bit up maybe, or be maybe stable. That is what I see, but definitely it's not going to go down from here.
Volume growth we are expecting this year, FY 2025?
As I said, we have planned along with additional 2.5 plus 1.35, close to 4 million ton additional capacity. Our plan is to achieve 70% utilization, and that translates into about close to 10% plus of volume growth. That is what we are targeting. That excludes all outsourced unit and everything.
Sir, this is on a consolidated basis. On a standalone basis, sir? If you can elaborate on that.
Very difficult, because see, last quarter also, if you see Udaipur Cement Works Limited, we have grown by 33% in terms of volume growth. And in case of JKLC, it is maybe negative. I think better to look at our tax console level. That should give you a better picture.
Okay, sir. That's all from my side, and all the best to you.
Thank you. You may press star and one to ask questions. The next question is from the line of Tushar, an individual investor. Please go ahead.
Thank you for the opportunity. My first question is, just want to confirm the timeline of your new Surat grinding unit. You mentioned in your commentary last quarter of FY 2025.
Surat, we are commissioning this 1.35 in two phases. First phase, we are going to commission in the month of October, which is going to be 1.35 divided by 2 kind of thing, around 0.7 million ton. Right. The next phase we will be doing around last quarter or maybe March, April of FY 2026.
March, April of FY 2026.
Yes.
Okay.
Because first we'll kind of do this grinding and then we have pre-grinder plan also, which we'll be doing around Q1 or Q 4 of this year.
Okay, sir. And second question is, what are the savings possible from railways grinding that will get commissioned in September 2024?
Saving, I think it's very difficult to really pinpoint. I think you need to understand. This is going to help us to be more competitive in markets of Odisha because till now we have been supplying clinker by road which was costly. Now it will go by rail. I think that advantage we'll get.
We have not also been able to reach out to some of the market where we wanted to be, which is better in terms of pricing, and also the distribution cost is lower. Particularly, I'm talking of eastern part of MP and some part of eastern market like Bihar and Jharkhand. Incoming, which we take, like coal and gypsum, there also we are going to get advantage. We are going to have good access to the market, one. We'll fetch better price, second.
But if you really want to know the kind of cost of distribution, cost reduction, then it's going to be on account of the incoming which we bring in and the outgoing which we'll take to some of the market. Maybe, I think we have not yet kind of clearly quantified it, but I can tell you that how much benefit we'll get out of it.
Okay, sir. Just a clarification, can you provide any timeline for expansion at Agrani Cement?
Sorry, come again.
Timeline for expansion at Agrani Cement you have recently acquired.
Agrani. We are working on this external clearances. Once that is in place, we will take two years from thereafter. So environmental clearance and after the land acquisition. Once those are in place, two years after that. So maybe it takes about a year, eight, nine months for those things. If that get completed by, say, March, April of 2025, then two years thereafter. So maybe March, April of 2027.
Okay, sir. Thank you. That's all.
Thanks.
Thank you. Ladies and gentlemen, this will be the final reminder for questions, and no further reminders will be given, that you may please press star and one to ask questions. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Yeah. Thank you, sir, and congratulations on the good profitability. INR 1,000 crore EBITDA second quarter in a row. Sir, just still need clarity in terms of the CapEx absolute at console level. So if you help me, you have mentioned INR 1,200 crore for FY 2025 and INR 1,000 crore for FY 2026. Sir, total CapEx for Durg is INR 2,500 crore.
North East is INR 1,800 crore plus railway siding plus WHRS solar. So what is total cost out of that, how much we have already spent and how much to be spent in FY 2025, FY 2026? Because it seems the number is on the lower side, because last time you said INR 4,000 plus kind of a CapEx, and that too in the Q4 we were looking at a much higher CapEx.
Total FY 2024, we are looking at INR 1,500 crore, but we have done INR 1,000 crore. So will it also spill over in FY 2025? Based on this, how do now look at the net debt number for FY 2025, 2026, and maybe possible the peak net debt?
As far as CapEx is concerned, we are talking of about INR 1,200 crores in FY 2025. That is only and only in JK Lakshmi. Another INR 1,000 crores thereafter and INR 1,200 crores in FY 2027. So INR 1,200 plus INR 1,000, INR 2,200 plus another INR 1,200. That is as far as JK Lakshmi is concerned. Then coming to Udaipur Cement Works Limited, they have about INR 300 crores remnant CapEx for the expansion, which will come in FY 2025.
Thereafter for next two years, other than a maintenance CapEx of maybe about INR 15, INR 20 crores, there will not be much. Third on the North East project. One is the acquisition cost, which we are talking of 125 already paid in FY 2024.
Another 200 gets paid in FY 2025. Thereafter we have the expansion. Then it will be about INR 350 crores and then another INR 1,200 crores thereafter in FY 2026 and 2027. That is about INR 1,500 crores. Those are broadly in line with these CapEx, our debt would be maybe, we are talking of a debt equity of 2 is to 1 overall for the project. We will have contract additional debt to that extent. As of now, we are talking when we see our debt position as far as JK Lakshmi is concerned, it is almost negligible. Going forward, based on these CapEx, it will be there.
We are talking of a gross debt on a standalone basis for JK Lakshmi as of March 2024, about INR 700 crores, cash of INR 500, so net debt of INR 200 for JK Lakshmi. On a console basis, we have INR 2,000 crores of debt, INR 650 crores of cash, and INR 1,400 crores of about net debt. It will certainly, I will not say it will not increase. It will certainly increase based on these CapEx which we will have on hand, but it will be within the norm, what we had set for ourselves.
True, sir. Just wanted to understand. Broadly and in terms of the railway siding, WHRS or the solar, what would be the additional CapEx and what would be the CapEx for the maintenance? What we have right now, you mentioned, is only the expansion one.
That about INR 1,200, that includes when I talked of JK Lakshmi, it includes partly for expansion, partly for all there. I have not given project-wise breakup. So when I say INR 1,200, it includes expansion, railway siding, tutor grinding, everything. Right?
Okay. Got it. So broadly, is it fair, we can have a kind of INR 4,000 crore kind of a net debt peak maybe in FY 2026 or 2027 because the overall CapEx would be still on the higher side versus the free cash flow or cash flow from operations for next three years.
Yeah, net debt will certainly increase because of the CapEx of INR 4,000 crore. So obviously, it will go up.
Okay. Second, in terms of, just to clarify the timeline, the first phase upon Durg, which will be a 1.2 MTPA grinding. So clinker is definitely there, 1.2 grinding at Durg and 1.2 grinding at Prayagraj, which will be commissioned by FY 2026.
Yeah. Last quarter of FY 2026.
Okay. Got it. Second, sir, you mentioned in terms of the TSR and the AFR and increasing this. Broadly, how much more from now, from this quarter, how much more we can see in terms of the cost savings? Is it possible and important? This is how much more we can. Definitely we have done much better in terms of the cost reduction. Just trying to understand how much more we can do.
Shravan, I think I told you that our TSR is going to be more than 12% this year, which was 7% last year. Right?
This is a console number you are saying.
No, I am talking of JKLC. Right?
Sir, I want a console level.
Console level also, right now we do not have any TSR at Udaipur because we do not have that facility. Right? So Udaipur will go to a level of about 7%, 8%, and JKLC will be there at about 12%. And if you take average of this, then it will be around 10% around.
Okay.
From right now, let's say average is about 6%- 10%. So 4% increase in the year FY 2025.
Okay. Got it. In terms of the broadly the current prices for us as a console level, if I have to look at, is it fair that 1.5%-2% would be lower versus the fourth quarter average in cement prices for us?
Yes, prices have gone down in Q 1 of FY 2025. It should be about, let's say, 1% around. 1%-1.5%.
Okay. Got it, sir. Thank you, and all the best.
Thanks. Thank you.
Thank you. Ladies and gentlemen, we will take the last question for today, which is from the line of Rajesh Kumar Ravi from HDFC Securities. Please go ahead.
Yeah. Hello.
Yes, sir. Please.
Yeah. Hi, sir. Could you share on a console, what was the clinker production in FY 2024, and also how much is the clinker purchase and clinker sold in FY 2024 consolidated?
Just hold on for a sec.
Sure, sir. Also Udaipur volumes in Q4, total sales volume.
Yes. Udaipur sales volume I can give you right away. So whole year you want?
Yeah, Q4 and whole year Udaipur.
Udaipur whole Q4, it was 7.56, which included cement of 6.42 and 1.14 of clinker. For the whole year it was 24.92, which included cement of 20.97 and 3.95 of clinker.
Okay. JK Lakshmi consolidated clinker production.
That we have given in our this thing.
No, cement.
For a full year.
Full year, sir. Total clinker production.
We have given.
69 point-
69, yeah.
69. 70 lakh.
Almost.
Clinker production for JK Lakshmi Cement in Q4 is 69.96 lakh tons.
69.96 lakh. This is Q4 ?
Yes.
Yes.
No, this is for whole of the year.
This is standalone, right?
Yeah. This is for standalone.
Udaipur is how much clinker production for the year?
Udaipur quarter 4 was 5.91 lakh tons only. For whole of the year is 19.75 lakh tons.
19.75.
Yes.
Sir, how much is the clinker sales on a console basis, and how much is clinker purchase?
On console basis, the clinker sale was 2.32 lakh tons in Q4 , and for whole of the year it was 8.7 lakh tons.
8.7 lakh tons. Also, how much is clinker purchase at different places?
There is no clinker purchase. Clinker, we have not purchased.
Not purchased. Okay. What would be your CC ratio in FY 2024, cement to clinker production ratio?
It could be about 1.46.
1.46. Okay. This is also marginally improved versus FY 2023, which was around 1.43, 1.44.
Yes.
What is the outlook, sir? You are looking at increasing this blending ratio more and more. To what level are you looking at? Obviously, the east, you will be targeting higher because in east you are setting up higher grinding unit almost to its clinker. But purely from the Udaipur ramp up and all, are you looking at this cement to clinker ratio going up north of 1.5x in FY 2025 or in FY 2026?
Definitely, I think we are trying to reach close to 1.5 level.
Okay.
Right. Because, yeah. Definitely, the endeavor is there to reach that level.
Sure. Last question on the CapEx, which you enumerated in detail, it seems you will be spending INR 1,700 crore this year, INR 1,400 crore on a console basis next year. You mentioned that the Northeast project, INR 1,200 crore you are targeting for FY 2027 alone or it could again get FY 2027 and FY 2028?
Sorry?
The Northeast project, you mentioned that you would be spending INR 200 crore this year as a balance payment for the acquisition. In FY 2026, FY 2027 you mentioned INR 350 crore and INR 1,200 crore, right?
Around that. Some portions may be incurred this year as well, especially on the land acquisition.
Okay, so this INR 200 crore plus some. This year, CapEx could be higher than INR 1,700 crore consol?
Project cost is INR 1,500 crore. A part may get spent in the current year and balance in the next two years.
Okay. Great, sir. I got. Yeah.
Thank you.
Thank you so much. All the best, sir.
Thank you.
Thank you.
Thank you. As that was the last question for today, I would now like to hand the conference over to Mr. Vaibhav Agarwal for closing comments. Over to you, sir.
Yeah, thank you. On behalf of PhillipCapital India Private Limited, we would like to thank the management of JK Lakshmi Cement for the call and many thanks to parties for joining the call. Thank you very much, sir. We shall now conclude the call. Thank you so much. Thank you.
Thank you, Mr. Agarwal, and thank you for all the participation.
Thank you everyone. Thank you.
Thank you, sir. Thank you, members of the management. Ladies and gentlemen, on behalf of PhillipCapital India Private Limited, that concludes this conference call. We thank you for joining us and you may now disconnect your lines. Thank you.