Good afternoon, ladies and gentlemen, and welcome to Sagar Cements Q3 and 9-month FY 2024 earnings conference call. Please note that this conference call is now being recorded. So we have with us today from the management, Mr. S. Sreekanth Reddy, Joint Managing Director, Mr. K. Prasad, Chief Financial Officer, Mr. Rajesh Singh, Chief Marketing Officer, and Mr. J. Raja Reddy, Company Secretary. We will begin the conference call with opening remarks from the management, following with which we will open the floor for interactive Q&A session. Before we begin, I would like to point out that some statements made in today's discussion may be forward-looking in nature, and a note to that effect was stated in the con call invite sent to you earlier. We trust you have had a chance to go through the result, communication and documents.
I would now like to hand over the call to Mr. Reddy for his opening remarks. Over to you, sir.
Yeah. Thank you, Manish. Good morning, everyone, and welcome to Sagar Cements' earnings call for the quarter and the nine months ending December thirty-first, twenty twenty-three. Let me begin the discussions with a brief overview of the market in terms of the demand and pricing, post which I will move on to Sagar specific developments. Overall, we have observed easing of demand, primarily attributed to the state elections and also due to the festive season. Despite benign demand, realizations remained relatively stable for us. The overall demand trend, however, remains resilient, buoyed by ongoing housing and infrastructure activities. Input prices are generally held steady, with the advantage of lower power costs being offset by higher freight rates. The quarter saw increased profitability, thanks to a combination of lower raw material prices and consistent realization. Let me now move on to our quarterly performance.
We have had a good quarter, quarterly performance, both operationally and financially. Pick-up in volumes, coupled with steady realizations, resulted in healthy top line and profitability growth. Volumes during the quarter stood at 1.4 million tons, higher by almost 14% over the quarter due to we believe we can achieve overall volumes of around 5.6 million tons for FY 2024. Shifting focus to profitability, EBITDA per ton has seen a meaningful improvement, largely on expected lines. As I have indicated in our previous call, we expect the trend to continue, supported in part by higher utilization levels of recently acquired units and strategic initiatives aimed at promoting the use of green power, alternate fuels, as well as deployment of electric trucks and wheel loaders.
EBITDA for the quarter stood at INR 87 crore, as against INR 48 crore generated during Q3 FY 2023, higher by 83% and INR 60 crore garnered during the sequential previous quarter, higher by almost 45%. EBITDA margins for the current period stood at 13%, as against around 8% reported during the corresponding period last year and around 10% generated during the sequential previous quarter. After considering the interest outgo and the depreciation expenses, loss for the quarter stood at INR 10 crore for the quarter, as against a loss of INR 24 crore during Q3 FY 2023. In terms of key operational activities, as mentioned earlier, our efforts are directed towards more improving the overall efficiencies and ramping up the utilization levels of our recently acquired units.
The average fuel cost stood at INR 1,700 per ton, as against INR 1,858 per ton reported during Q3 FY 2023. Freight cost for the quarter stood at INR 864 per ton, as against INR 795 per ton during Q3 FY 2023. From an operational point of view, Mattampally plant operated at 52% utilization, while Gudipadu, Bayyavaram, Jeerabad, Jajpur, and Andhra Cements operated at 97%, 67%, 69%, 28%, and 37% respectively during the quarter. As far as the key balance sheet items are concerned, the gross debt as on 31 December 2023 stood at INR 1,557 crore, out of which 1,257 crores as a long-term debt, the remaining constitutes the working capital. The net worth of the company on a consolidated basis as on 31 December 2023 stood at INR 1,618 crores.
Debt equity ratio stands at 0.78:1. Cash and bank balances were at INR 157 crore as on December 31, 2023. Another noteworthy development is that Board of Andhra Cements has approved proposal to implement a new six-stage preheater for cost optimization and to enhance the clinker and grinding facilities at its Dachepalli unit. The estimated project cost will be around INR 470 crore. The entire project is going to be commissioned by end of financial year FY 2025-26. In summary, we believe our diversified regional presence, improving product mix and consistent focus towards lowering costs and improved operational efficiencies, position us well to create value for our stakeholders. That concludes my opening remarks. We will now be glad to take any questions that you may have. Thank you.
Thank you, sir. We will now begin with the question-and-answer session. A reminder to all participants, you can ask your question by raise of hand in the participant tab of the Zoom platform. The first question is from Shravan Shah. Please go ahead, Shravan.
Hi, thank you. Sir, first, coming on the volume front, so in the last phone call, we were confident that we can do 6.2 million tons for this year, and now we have reduced the guidance for the volume for this year to 5.6 million tons. So just wanted to understand, despite we were doing, we were in the middle of the quarter, last quarter, when we did the call, and we were confident, and what has happened? And similarly, now, how confident are we for this even 5.6 million tons, and also for the next year, FY 2025, previously we said 7.5 million tons volume.
If you can help me with the revised number, and also, if possible, how much will be from the Andhra Cement?
Yeah. Thank you, Mr. Shravan. Yeah, as indicated, from there is a downward revision from 6.2 to 5.6. The reason is obvious that the post-election scenario, both at Madhya Pradesh and Telangana, we expected some amount of ramp up to happen, which looks to be challenging at this point of time. I think the national election and three months post that scenario, at such time, we believe that the demand is more going to be on a flattish kind of a trend rather than on an aggressive kind of a trend. So that's one of the reason why we had to do the downward revision.
Now, looking at the confidence of doing those numbers, yeah, we, we believe that, with the downward revision, we actually at, removed some of the government demand that was coming by. So we have reduced it from 6.2 to 5.6. This looks to be a lot more realistic from our end, so to be reasonably close to the number what we are, counting at this point in time, Mr. Shravan. Now, going to the next year, we believe, seven million is a possibility, for the full year next year. This having factored, that Q1 probably would also be, the demand probably would be more on the sidelines going to the, to the general election and more specifically, elections in Andhra.
Our past experience is that, three months before and three months after election, the demand tends to be a lot more slower than what it normally is. Given that context, we made the downward revision. Andhra, specifically, the target for the next year is to do anywhere between 900-1 million ton, for the coming year. Hope I addressed all the questions, Mr. Shravan.
Yeah. Andhra, you said 0.9 million ton?
Yeah, 0.9-1 million ton, Mr. Shravan, for the coming year.
Okay, okay, got it. Second, in terms of, on the profitability front, so there also we were looking at INR 400-odd crore kind of EBITDA.
Yeah, now, I think we should, since there is a downward revision in the volume, yeah, I think the indicative potential EBITDA that we feel that we should be able to generate is around INR 310 crore.
Okay, INR 310-odd crore. So, the fourth quarter, we can look at INR 130-INR 135-
Yeah
... INR crore kind of EBITDA?
Yeah.
Okay, okay, got it. But there to achieve that,
No
... what kind of price increase? So I believe still the prices would be lower than the...
No, what we have factored is a flattish trend in our case for the realization. We are expecting INR 150 kind of a saving, both on account of fuel, as well as increased volumes should give a better spread in terms of the overall contribution. So INR 150 per ton is incremental cost saving that we hope to achieve. So from the current INR 610-odd EBITDA per ton from the current quarter, we are expecting it to stabilize somewhere around INR 750 per ton for the coming quarter, Mr. Shravan.
Okay. And then the similar run rate can be maintained for the next year?
Yeah. Let us handle one at a time. So we are reasonably sure of the volume. I think on the pricing, the outlook, we would be happy to come back to you as we cross the Q4 and enter into the next year's scenario.
Okay. On the CapEx front, how much we have done, and what's the number for this year and the next year, considering the new expansion that now we are there?
Yeah, we have done all the CapEx that is required for the current year, which is more on the operational side, the maintenance CapEx. For the coming year, as far as Andhra is concerned, I think for the next full year, our target is to do around 150-odd crores. Bulk of it is backended, as you know. The announcement is for constructing a new six-stage preheater. So bulk of the time that gets consumed is in the civil activity. So for the next coming year, it's mostly to do with the construction of the civil and partly to do with some advances to the equipment. So we don't expect it to cross more than INR 100-INR 125 crores for the coming year.
As far as Andhra's new CapEx announcement is concerned, the rest is more to do with the operational maintenance CapEx, which we have indicated. It is close to around INR 30-odd crores for the next year, full year, for all the other plants. We are yet to start the other small brownfield additions that we have announced. We have time, as indicated by FY 2025 end, yeah, we should do a 500,000-ton expansion at Jajpur and a 250,000 expansion in Gulbarga. Those are not large CapEx kind of a thing. Those are with very limited kind of a CapEx, but they are time-consuming because we are going to the clearance at Jajpur for enhancing it from current 1 million ton...
So we need to enhance the EC clearance to 1.5 million. So till that happens, I don't think we would be doing any CapEx. We expect that to come anywhere between 9-12 months, sir. Post that only our CapEx will start, and we will be happy to come back to you, as and when the timelines get crystallized, on the Jeerabad brownfield expansion.
And then broadly on the debt front, so currently INR 1,557 crore odd. So, in terms of the, will this further increase, what-
No, I see, I think, at INR 1,400-1,450 net debt position, I think our position is going to remain same, because we are committed to raise equity at Andhra. That and whatever is the payout, at a group level, that is the balance that we are going to do. So we would not exceed the net debt level of around INR 1,400-1,458.
Lastly, the Vizag land sale. So, anything is happening so now by-
I think we did announce. I think we have made good progress. I think we have another 12-15 months. I think the timeline still remains the same. So, first phase is more or less completed, sir. So the mutation and the associated things are all done. So we are entering into the next phase, so we are hopeful that, over the next 12-15 months, we should be in a situation to liquidate the, monetize the land and buy that.
By end of FY 25, we should be able to monetize and get the cash, and that should support us to-
Yes, sir. I think those are the timelines which we are hoping. It looks that there is a good possibility that we should stick to those timelines.
Okay. Okay. Thank you, sir, and all the best.
Thank you.
Thank you. The next question is from Rajat Sethia. Please go ahead.
Hi. Thanks for the opportunity. I just wanted to check about the pledged shareholding. It's on the NBFC. It shows that 75% of our holding is pledged, like promoter's holding.
No, Mr. Rajat, I think it is more to do with the nomenclature. Yeah, if you, if you have looked at it, there is a SHA for us, that is the shareholders agreement with PI and all. So it's, it's.
Mm-hmm.
Non-disposal agreement also reflects as a pledge, but it's not a pledge, it's actually non-disposal of promoter shares, sir. It's not pledge.
How much is really pledged or there is nil pledge?
No, there is a very, very marginal, the extended family of the promoter, but that's very, very negligible in the share.
Okay, understood.
Majorly, it is only the non-disposal undertaking which is reflecting as pledge. There is... Effectively on the core promoter, there is no pledge at all.
Okay, understood. The second question is about the cost of debt. On 1,600 or so gross debt level, we are incurring INR 50 crore in interest payment on a quarterly basis. So what's our cost of debt, and what is the rate of interest, sir?
It is around 10%, sir. I think it is at 10%, so there is some amount of realignment. The average cost of debt is at around 10%. Slightly lower than 10, but I would assume it is close to 10, not more.
What are the other components of the finance role that we are reporting in quarterly statements, which came at INR 49 crore this quarter?
Yeah, this time the debt itself is well, sir, so your numbers looked higher, but cost of debt is at 10%.
Okay. Because if you go by 10%, ideally it should be INR 40 crore-
Yes.
On a quarterly basis.
It will get aligned to that number, sir.
Starting next quarter?
There is a working capital renewal and all, so the charge creations and all would have actually added up, sir, but it effectively, interest cost would not exceed the number for-
Okay. So are you saying there will be reported finance cost of INR 40-42 crores starting next quarter, or?
Yes, sir.
Oh.
I think it's close to around INR 45 crore on the higher end. That works.
Okay. Understood. Understood. Sir, on the realization side, I think we reported one of the highest realization in the last many, many quarters. So what really led to that? I mean, is it seasonal or-
I think the October, October pricing in the market, there was a steep increase, sir. We have always been extremely cautious that we don't chase low-cost orders, be it trade or non-trade. We don't mind compromising on the utility, utilization, but we would never do it on the realization front. So vis-à-vis to some of the market players, our realization trended at a lower pace downward rather than... In October, there was a steep increase. November, there was a little drop for us, and December, of course, we more or less aligned with the market. So that probably pitched our realization slightly higher than most of the other market shares.
Okay. So some correction has already happened, basically?
No, correction was a constant if it's a marketplace. From October-
Mm-hmm
... to November to December, the trending was downward, but in our case, the drop is not very significant. So is the case even in the current month, sir. So though, though the market... See, it's a, it's a mix of various things. It again, depends on once the some of the subsidiaries start operating, they are very close to the market. And so the realization for us would also become higher. So these are all the mix, but in all, our relations have been reasonably healthy, purely because we did not chase low-cost some of the low-cost orders that were in the market. Realizing that those things would not anyway increase your volume substantially. So idea was not to lose on whatever little margin that that is available.
Sure, sure. Okay, sir, I will get back in the queue. Thank you so much.
Thank you, Mr. Rajat...
Thank you. The next question is from Keshav Lahoti. Please go ahead.
Hi, good afternoon. Just want to understand one thing on Andhra land monetization side, as you know, big land parcel. What are the initial trend you are getting? Will it be sold to a single buyer or you have to possibly, you know, divide the land? And secondly, when you will sell the land, do you need to do any ground leveling or some other sort of work to make it ready for sale? And lastly, there are, you know, the old grinding plant installed at Andhra. Whether have you sold it off or how is the progress going on that side?
Yeah. Mr. Keshav, so the land, our intention is to sell the land as is where is. So the question of leveling and all doesn't arise. We are good six months away because we are waiting for one more clearance. We put the overall process in three parts. The first part was to get the entire land parcel mutated, because there is digitization of land records in Andhra, so that part is more or less 95% done. So we are entering into the next phase where we've already written to Andhra government on two counts. One, there was a permission that was a requirement for us seeking sale of land, because this land was assumed alienated and transferred from Andhra Government to Andhra Cements in mid- to late-seventies.
So there was an obligation that, we have to get a government permission if we have to put it to use for any other purpose other than the industry there. So we have already initiated that process. We hope over the next five-six months, we should have got the permission for the sale. At the same time, it also needs conversion, the usage conversion, sir. Currently, it is for industrial use, so we did apply for a mixed usage. So we believe, if we do these two issues, there is a reasonably better value that we could attribute to the company. We are not into the real estate development, so obviously we are looking at all the options that are available to maximize the realization.
Do we have to sell in bits and pieces or do we have to sell a large parcel? Yeah, we did assign the consultancy advice to JLL. It's work in progress, so we'll be happy to come back to you as and when we would have got the advisory from JLL as to what would be the best route for us to maximize the value from the sale. That part, I think we are good another five months away, five-six months away, so we'll be happy to revert back as soon as we reach to that milestone. Now, coming back to the existing grinding, the clinker grinding station there. Yeah, we did sell, so the mills, there are two mills and there is a dryer.
All these things have been sold. In fact, 50% of the equipment have also been lifted by the purchasers. We are leveling it out, the civil structures, that is the part which we have undertaken. I think over the next five months, the land should have been without any industrial asset on, sitting on top.
Understood. What sort of realization we can expect from the sale of all those grinding units and dryers?
See, I think, the attributed value is close to around INR 18.5-20 crores, Mr. Keshav.
Understood. Got it. And right now, how are the, you know, cement prices versus QQ, QC? Like, if the current cement prices stays as it is, so what sort of drop in realization we should expect in Q4, Q1, too?
See, the current trend, though, the market was talking of a price increase, sir, we are yet to realize. So in some pockets, it's more or less flat all the way from November to now. In some places we have seen a INR 5 per bag kind of a dilution. But this is very, very specific to southern pockets because middle of month there is a Pongal and Sankranti Festival. During those times, the demand is literally close to nil. So that typically tends to put some pressure on the pricing as people try to squeeze whatever little that is available. But we hope that the prices are more or less very similar in starting of the month to end of the month. From the exit of December, we believe that it should more or less be flat.
Okay, got it. What I've understood, like, FY 25 would be a very more like a maintenance CapEx kind of a thing, and the major Andhra CapEx and the Satguru and other thing will flow in FY 26. What sort of CapEx you are looking in FY 26?
See, I think we did announce INR 470 crore CapEx at Andhra. Only 30% of that we are expecting to happen in the coming year, sir. Rest everything will be spread around another 50% should happen in the coming year. The small residual portion probably would flow into the next year later. But whereas the small brownfield CapEx that is required both at Jeerabad as well as Gudipadu, should come in FY 2026. That should not be more than INR 50 crore odd. And another, probably another INR 25 crore should go through into the year later.
Okay, okay. Understood. So last question from my side, the trade share for this quarter.
We are at 55.5 kind of a number, sir. For the quarter that went by, right?
Yeah, perfect.
Yeah. We are at around 55%, ...
...Okay, thank you. That's it.
Thank you.
Thank you. The next question is from Parth Bhavsar, .
Yeah. Hi, sir. So thank you for the opportunity. Sir, earlier you mentioned that, you know, demand usually, you know, slows down near, you know, our national elections, and even it slowed down during your state elections. Even we've, you know, discovered, like, we've according to our research, three out of five elections, demand has usually slowed, you know, slowed down post-election. So, you know, considering that demand is expected to slow down a little in FY 25 and, you know, at least, you know, 30 MT is being added by, you know, in, in terms of capacity is being added. So what sort of, you know, EBITDA per ton you're building in? And how much, like, are you building price growth?
Is there any EBITDA per ton improvement that you're building, like, which would be on the back of price growth? Because I feel-
I think for the coming year, we are reasonably sure of the volume, part, but we are yet to penciling potential kind of margin analysis. I think this should be, we should be doing it close to first week or second week of March. I think, with the current year financial year results, we would be in a much better shape to really talk of the margin for the coming year. Our belief is that, see, national elections is one part, but the state elections, because state government typically tends to increase more cement demand in the regions that we operate. Historically, it is three months before and three months post-election, tends to be slower. So that has been factored in.
So we believe that the next year, our own numbers are primarily coming from the ramp up that we expect from Jajpur as well as Andhra, rather than existing assets. So there we are not trying to factor any incremental volumes for the assets that have been operationalized. Truly, because there are some new capacities that are likely to get installed in the same region, namely Shree of Guntur and My Home, Mellacheruvu, and probably to certain extent, some additional ramp up from Ramco Kolimigundla. So whatever little demand that is likely to grow, we are adjusting it to these ramp ups.
Okay.
Internally, our only take is that we are likely to do 7 million for the coming year from around 5.6 million. That majorly would come both from Andhra as well as Jajpur. That's what we have penciled in. Margin, we would revert back to you probably during the full year results, somewhere around middle of Q1.
Sir, fair enough. Sir, on the industry, do you think that, just on the industry, that do you think that the incremental capacity addition would be, you know, demand would able to, you know, like, equal it? That would the-
It would, sir, I mean, what we have seen, we are penciling somewhere around 5%-8% growth rate for the coming year. So, market should able to absorb whatever ramp up that is going to happen. With an assumption that, the players would be rational in their flow of material into the market. I'm not expecting the material to rush in into the good market. So that rushing sometimes will disturb one or two quarters, but at the end of the year, I think market should comfortably absorb, you know, 30%, 40% capacity utilization from any of those new commissions that are likely to happen over the next Q1.
Okay. Okay. And sir, on cost front, just wanted to understand what sort of inflation have we seen on slag and fly ash year-on-year or quarter-on-quarter? Like, whatever you can help.
So I think slag as well as fly ash, we have not seen, sir. Availability has always been a challenge, especially on fly ash. But from a price perspective, fly ash is not very sensitive to the product price. It's very sensitive to the transportation cost. So again, our take is that since it's getting into the election, we believe that fuel prices may not significantly jump up. So that should more or less be very flattish then, as far as fly ash is concerned. Sometimes fly ash, we may have to go very far to source, if the neighboring power plant is under shutdown, because there is a lot of backup, lack of power that we have seen. We did struggle for some fly ash availability in some of the units that we operate.
So we had to source fly ash from a slightly far off location, but that's not inflationary, going far to get the material, sir. But we have not genuinely seen inflationary kind of a price increase on any of these costs. It's more aligned with the transportation cost, because the landed cost, the majority of it is only transportation cost, not the material cost.
Okay, sir, we've been listening a lot about, you know, busy season surcharge being, like, higher year-on-year. So is that the reason why, you know, your fly ash and slag cost should be higher?
No, we don't use railways for any of the incoming material as far as-
Okay.
As far as fly ash and slag is concerned, sir.
Okay.
I don't think that can be attributed for that in our case. I don't know.
Okay.
It could be specific to some units of some of the peers, but in our case, we don't use rail at all for either of the material.
Okay. Okay. Got it, sir. Thank you so much.
Thank you.
Those are the questions.
Thank you. The next question is from Hiten Boricha. Please go ahead.
Hello.
Please go ahead, Hiten.
Hello. Good morning, sir. Good morning, sir. So you mentioned something about $150 kind of savings from Q4.
Not dollar, sir, it is rupee.
Yeah, it is INR 150 per ton. From the current quarter-
Yeah
... to the next quarter is what we have indicated from a potential saving that is likely to happen, sir.
... Sir, I just wanted a breakdown of the savings from where this saving is going to come?
100 would come from power and fuel, sir, because it's not just the fuel, because the last quarter, our power and fuel cost impact was primarily on account of Andhra Cements, because there are frequent starts and stops, and we did consume very high cost imported fuel. That itself is exhausted, so that potentially would save going forward for us. And another INR 50 from an operational kind of a leverage, sir. Because from a 1.4 million, once we touch to 1.7, then we believe that that should also help us have an INR 50 saving. We went through last three quarters on a maintenance, aggressive maintenance at most of our units, sir.
That is behind, so that should also help us save this, INR 50 incremental saving, on the repair and maintenance and consumables part. So that is what we have indicated, that it should help us save incrementally INR 150 per ton going forward, for the coming Q4.
Understood. Understood. So what, what's the cost in kcal basis, this quarter and last quarter?
On a per kcal, at a group level, you are looking at it, sir? I think we did include that in our presentation. But let me... You, you asked our sourcing costs or, as per our costs?
I got the slide. I got the slide, sir.
Yeah, yeah.
Thanks. Sir, my next question is on the CapEx. I just missed the CapEx number you have given for 2025 and 2026, if you can please repeat it, sir.
Yeah. We, we just announced INR 470 crore CapEx at Andhra Cements, sir. Which is to build a new six-stage preheater with a pre-grinder for cement. But for the first year, that is the coming year, coming financial year, the only CapEx that we are going to spend is on the civil side. That is going to take almost 12-15 months for us to come up with the civil structure. Around INR 125 crore is what is the CapEx for the current year, and the balance would be spread over a year and majorly into the next year, and a certain portion would be spread into a year later.
INR 125 crore would be for the coming year, and a maintenance CapEx of another 30 crore will be spent for the coming year for all the other units other than Andhra.
Understood, sir. Thank you so much.
Thank you, Hiten.
Thank you. The next question is from Rajesh Kumar Ravi. Please go ahead.
Hi, sir. Am I audible?
Good afternoon, Mr. Rajesh. Yeah.
Good afternoon, sir. Good afternoon, sir. So this year, you are purchasing clinker also from outside?
No, this quarter, we did not. So, yeah, there is an intercompany group company transfers, Rajesh. Even that also is more or less completed. Because when we were under maintenance in Mattampally, so we had to source some amount of clinker from Andhra. That part is done, so I don't think we'll be buying any external clinker.
No, because in the presentation, the plant-wide numbers that you share, there is a shortfall in the Clinker and cement production numbers from versus total. So I thought, is there some external purchase?
No, no, I don't think. No, I don't think we have done, except for some group level transfers. So that too, minor-
Sure, sure.
Vis-à-vis to the previous quarter—I mean, a quarter before in Q2, of course, we, there was a lot of clinker purchase from Andhra, but,
That is okay.
Going forward, I don't think there is a requirement.
Okay. I'll get this sorted separately. And you mentioned that this quarter you're looking at INR 100 savings on the fuel cost, paid on, you know, primarily because of the frequent starts and stops which happened at Andhra. So on a fuel cost-
And also, we consumed expensive imported coal during that quarter because it was in inventory, so that got booked, Mr. Rajesh, so that is behind.
Around per kcal, what sort of savings you're looking, sir, versus Q3?
I think on a Kcal-
On a group level.
On a Kcal basis, we are not significantly expecting any savings for Q4, Rajesh. It's mostly to do with the optimization and high complementary is consumed.
Okay, okay. So you're on a fuel mix optimization, you know, the change is what will drive?
Yes, sir. Yes, sir.
The-
Start, stop typically consume quite a bit of-
Correct.
You know, the cold starts typically consume more, so that also is behind us.
Okay. And, total CapEx you said for FY 25 would be INR 150 odd crore.
Yes, sir. Around INR 150 crore-INR 155 crore. INR 125 crore from Andhra, and the balance 30-odd crores for the operational CapEx across the other.
This year total would be how much, sir? If I missed that point, FY 2024, including maintenance, what is the CapEx outgo you're looking at?
Yeah, we did close to around INR 30-odd crore for the current year, plus Andhra, like-
No, inclusive of everything inclusive.
... Current quarter we can say?
Yeah, in the current quarter, we are expecting 15.
Okay. Okay, sir, that's all from my end. I'll come back if you. Thank you.
Thank you. The next question is from Keshav Lahoti. Please go ahead.
Just to follow up on trade share, what we have seen the earlier, you know, trade share was more like 60 or upwards of that. That is now down to something like 55. So how you see the trend going forward? Will it be back to 60 kind of a number?
Yeah, I think, I, I think it's more to do with the seasonality and also the government demand related, Mr. Keshav. Our usual listing is somewhere around 20 or 60. I think you realize our kind of.
Like my understanding was, Q4, the government demand might has been weak, so ideally the trade should be higher.
You asked for Q3, right?
Sorry, Q3.
Yeah.
I mean, Q3, the demand from government might has been weak. Is it a fair understanding?
Q3 was relatively okay, sir. Relatively okay, because Andhra still consumes some portion of cement, but we believe that in Q4 and going into Q1, most of it would go missing. So then naturally, trade will start looking more. And the other issue also was during the election in Telangana, not that government demand was very substantial, but the private activity was continuing. So we did take some additional exposure into the non-trade segment, especially the RMCB. So that also made this number slightly go more towards the non-trade. But I think on an average, we should trend close to 60%.
Okay, got it. On the 7 million volume guidance, what you have given for FY 2025, is it possible to give breakup of Jajpur, Andhra, and Satguru, what you are building in?
Yeah, we will revert, we will revert. We will, we will keep this in mind, and we will be happy to share those numbers in the coming quarters, sir. Because it has to be cleared by the board for us, the annual plan. So we have the general guidance. We'll be happy to share that in the coming quarters, Mr. Keshav.
Understood. One last question from my side. Like, Andhra unitary EBITDA was INR 270 for this quarter. So what sort of gain you can get, leaving operating leverage and other things aside, just by the, you know, normalization of plant?
See, I think the normalization itself should kick in extra INR 600, so it should get aligned with Sagar, sir. Though cost is slightly higher, but the footprint area for Andhra sales is in the neighborhood. So that should more or less taper off. The rate should be lower, costs are higher. The other costs are higher. So on net, I think it should get aligned with the Mattampally kind of a number, Mr. Keshav.
Got it, got it. It should start from FY 25 start, right?
Yes, sir. I think it should start from Q4, but I think it's fair to assume that from F1 onwards, Q1 onwards, for FY 25, more or less we see the gap narrowing down or more or less having a parity with other...
Okay. Thank you. That's it.
Thank you, Mr. Keshav.
Thank you. A reminder to all participants, in case you have a question, please indicate by a raise of hands. So in the meanwhile, I have a couple of questions on Dhar. So how is the ramp-up, which is happening at Satguru, both in terms of profitability and utilization levels?
Yeah, at Jeerabad, the capacity utilization for the last quarter was around 69%. The ramp-up is reasonably there. But for the election season, the difficult rainy season that we have had, or else we should be trending close to around 85%-90%. The profit margin for the quarter was close to around INR 969. We believe that we should be slightly higher because we had a lot of inventory on Clinker also. So that did not help the margin. But I think utilization levels at Jeerabad and the margin at Jeerabad is very, very high.
Perfect, sir. Thank you.
Coupled with that, the incentives of around INR 30 crore is due from the Madhya Pradesh government. We expect to receive them in the coming quarter itself. The first installment of INR 30 crore is likely to be received in the coming quarter or in the current quarter.
Okay, sir. Got it. Thank you. The next question is from Rajat Sethia. Please go ahead.
Hi. Thanks for the opportunity once again. Sir, one historical number-related question. So in FY 2023, our depreciation went up a lot, and compared to FY 2022, our current rate of depreciation is almost doubled. What is the reason for that?
Assets have gone up, sir. I mean, commissioning of new assets, and Andhra also, Andhra acquisition also added up to the depreciation.
So FY 2023 was largely non-Andhra, but more assets, you are saying?
Yes, sir. Because the full commissioning of both Jajpur and Jeerabad happened during that timeline.
So, if we want to understand the kind of EBITDA that we can generate on a per ton basis, without any regard, without considering any realization increase, so what are the levers and what kind of EBITDA per ton-
Yeah, I think it's operational leverage, sir. I think it's only operational leverage, because we are operating at close to 55%. I think another 20% increase in realization will automatically add up INR 100 because, you look at salary spread or more or less the repairs and maintenance and everything, if you have to spread it, the detail should add up, INR 100-INR 150, incrementally.
So that 740, 750 number that you mentioned, is that
Without any increase in realization. We did not pencil any realization.
Right.
Yeah, we are only assuming the stable operations to come in. That should add up another increase.
Okay. So post 750, it's the realization that will-
See, post INR 750, another ramp up should add up another INR 100 some, straightforward, because if you look at, year to date, utilization at Dachepalli is 22%. Last quarter is 37%. I think even if it aligns itself and touches 60%, that should significantly contribute to the margin.
Thank you. The next question is from Nitin Raheja. Please go ahead.
Yeah, hi. Thank you for the opportunity. So just want to know, what is the current CK ratio, and how do you see it going forward?
Yeah, I think we are close to around 1.3, sir. On a higher side, I mean, we have a long-term plan. We did commit that it will go up to 1.55, but I think it should take over a phased manner. For short term, I think it should touch around 1.35 within the next two years, for eventually to reach close to around 1.55 by FY 2030. It's again to do with the ramp up in the other region, because most of the other regions, the blended cement ratio is much higher related to the current regions that we operate, sir.
Okay. For gypsum and slag, for slag and fly ash, you all have any supply arrangements for the same?
Yes, sir. We have arrangement for Bayyavaram, we have an arrangement with RINL Vizag. For Jajpur, we have it with Tata Steel and Jindal. So we do have arrangements for that, for slag. Fly ash also, we have arrangement for most of the thermal power plants in the neighborhood of each of the unit.
All right. One last question is, how do you see the energy mix going ahead, like for the next two years? How, what kind of energy mix have you factored in?
See, when you look at energy, you're asking for Petcoke and coal kind of a combination, right, Mr. Nitin?
Yes.
Yeah, we are very sensitive to the price. Our all units can consume Petcoke, sir. So it's a very, we can use 100% Petcoke to 100% domestic coal to 100% imported coal. We typically make the mix based on the cost of each of those particular things. So we try to trend more on as far coal to be very, very optimally kind of a costed. So I cannot give that number unless I know what kind of fuel is available at what price. But all our assets are capable of firing 100% Petcoke, to 100% imported, to 100% domestic coal. So we make the mix based on the most optimal and most financially viable kind of an option, sir. So that subject has been very, very volatile.
So it's not that we have fixed the fuel mix forever. We are blessed reasonably with a very good mix of limestone. So we have low grade, high grade, all type of limestones available, and dynamically, we can make the adjustments. We historically have also made similar kind of an adjustment. When Petcoke was very, very low cost, we ended up using it. When Petcoke price moved up, we switched to domestic coal. So we have always been making dynamically those adjustments to ensure that what we fire is the best from a cost point of view and also technical point of view.
Yeah. All right. Sorry, one last question from my end is, are you taking additions in solar and WHRS currently?
Yeah, we do have close to around 1.5 MW of solar. Yeah, we have this waste heat recovery system to the tune of around 14.5 MW. We do have plans, but they are phased out. By 2030, we hope to have green power almost a mix of 50% in our electrical energy mix. From current 20-25 to 30%, we intend to scale it up to 50% by FY 2030.
All right. All right. Thank you. That's it from my end. Thank you.
Thank you, Nitin.
Thank you. The next question is from Sanjay Nandi. Please go ahead.
Thank you for the opportunity, sir. Hello?
Yeah, good afternoon, Sanjay.
Yeah, good afternoon, sir.
Good afternoon, sir.
Yeah, thank you for the opportunity, sir. So just a clarification thing, like there have been some significant flood in the deep South India, like in Tamil Nadu and Chennai, in this last quarter. So what kind of volume loss did happen for us in that timeframe?
Sir, I think that is one of the reasons why we did mention that the demand overall tapered off quite significantly, because we do know that there is a monsoon in Tamil Nadu, but we have never seen such a heavy flooding in some of the deep south pockets. I mean, I think these are historically in probably more than a century, people have never seen such kind of flooding back. So that actually took off close to around 250,000 volumes out of the current quarter. That's the reason why we scaled down, one, because of election, as well as recovery of those markets probably is likely to take more than three to six months' time.
... Got it, got it, sir. So that's all my side, sir. Wish you all the very best.
Thank you, sir. Thanks.
Thank you. The next question is from Shravan Shah. Please go ahead.
Hi, sir. Sir, first, just wanted to understand in terms of the, when we say INR 30 crore, incentive that, we are going to, receive. So if I just, look at and divide by the volume that... So, correct me if I'm wrong. So this, when we will be receiving in the fourth quarter, we will be booking in the revenue. So just if I divide by the volume that we will be, having close to 1.7 million, it results to a, a kind of a significant 175, kind of an increase in the realization at the consol level. So is it a fair understanding?
Yeah, Mr. Shravan, see, we did not pencil for EBITDA per ton calculation. It's again, a state government issue, right? So that would be an incremental kind of add up, sir. We have not factored that inflow in any of the statements that I've made so far. That, that is excluding, that we expect INR 150 per ton, kind of a margin increase purely on account of ramp up at Andhra, and the other units. That is something which is like a bonus for us, Mr. Shravan.
Okay, okay. And this INR 30 crore that we will be getting in this fourth quarter, and so going forward in FY 25, how much we are looking at in terms of the incentive?
Sir, I think it is INR 30 crores installment spread over next, six-seven years, Mr. Shravan. It's an equal installment. We did indicate about this even in the earlier quarters. It's a state incentive. It has nothing to do with the volumes, but of course, it is subject to you utilizing a minimum of 70%. You should be getting close to INR 200-odd crores. Yeah, sorry, INR 150-odd crores, spread over seven.
Four years.
6.5 years.
Okay, okay, okay. Got it. Got understood. Second, just wanted to understand, what's the green share for this quarter, sir? Q3.
Green energy, electrical energy share, sir?
Yes, yes. Yes, sir.
Yeah, it is roughly around 27%.
Okay. Similar to last quarter, also 27.
Yes, sir.
Yeah.
Because we have not significant change. We have not added anything new, so it is very same. So even for the next quarter, we do expect things to be very similar, Mr. Shravan.
Okay. And if you can help us in terms of the price increase, what has already happened in the third quarter? So, in terms of the state level, if you can help us,
Nothing, sir. Nothing. I mean, it is flat, as I mentioned, Mr. Shah. Yeah, there, there is a small downward revision, but, it's more or less flat with a negative bias.
No, no, sorry, sir. So for us, the realization increased 6.4%, QoQ. So how, in terms of the state level, how much it has come in the third quarter? What has...
See, October month, it has been across South, Mr. Shravan, so it is not one state. Across the state, we, we actually got a huge increase. That more or less, we sustained, barring small dilutions that we have seen in November and sequentially followed in December. But we will be happy to share that. If you could articulate the exact question, you would... If you could send across message, we'll be more than happy to share that, Mr. Shravan.
Okay, okay. And you, you mentioned that for the fourth quarter, we will be doing a INR 50 crore CapEx or a INR 15 crore CapEx?
15, sir. 1 5.
15. Okay. And till nine months, we have done close to INR 145 odd crore.
Yeah, because that includes Andhra's ramp up, Mr. Shravan, so we'll be happy to share the breakup of that.
No, no, I'm asking for the nine-month FY 2024, how much?
Yeah, it is close to that number, but that majorly includes the ramp up that happened at Andhra also, Mr. Shravan.
Okay, okay. Okay, got it. Thank you, sir.
Yeah, thank you. Thank you, Mr. Shravan.
Thank you. The next question is from Rajesh Kumar Ravi. Please go ahead.
Yeah.
Rajesh Kumar-
Yeah, yeah, yeah, yeah. Thanks, Rajesh. Yeah. Sir, two questions. First, on the clinker CC ratio, if I look at nine months, you know, your cement to clinker number, which you share, the CC ratio works out to be 1.24-1.25, which is lower-
No, no. Yeah, you should be very careful with the numbers, because we have GGBS and all, Rajesh. I think,
Okay.
We'll be very happy to share those numbers at a unit level. We'll be happy to share those numbers.
Mm-hmm.
But in our numbers, you should be-
Okay, so I was just plainly looking at your Clinker production group level and cement production group level.
No, but you'll have inventory, you'll have various things, sir. Very happy to share.
Correct, correct. So that is why I was looking at for a nine-month numbers to even out some of those impacts.
Yeah, we still sit on a huge inventory of clinker, Mr. Shavan.
Okay. Okay, okay.
It is 1.32.
Understood.
It is 1.32.
1.32. In Andhra, when you're doing your major expansions, there also, this CC ratio can be compared-
Sir, it is all the same market, sir. The alignment is across at a group level, Mr. Shavan.
Right, right. Right.
Brand is same, so alignment is at a group level.
Okay. Second question pertains to, when you mentioned, this incentive, which you will be receiving INR 30 crore. I think you also mentioned, that you need to achieve 70% utilization. Is that-
Yeah, we already are above that, so we are already achieved, sir. We already have a sanction. We're just awaiting for the receipt, sir.
No, because if I look at your production number for Andhra Cements, which you shared-
No, no, you're, you're mixing up. It's not for Andhra.
Uh, uh.
Yeah. Jeerabad.
Oh, okay, okay. For Jeerabad, where you're already... Okay, the Jeerabad, this is INR 30 crore annual per annum, which will be accruing, and nothing is-
Yeah, we don't have anything in Andhra, sir. We don't have anything in Andhra.
Understood, understood. Okay, okay. This, you will be retaining, you know, quite a different type of... See, you're looking at if this number comes through INR 150 odd rupees incremental realization. So would you not be looking at this as, you know, using this to push more volumes?
Sir, we have never used incentive as-
At a group level.
... for us to put more numbers, sir. We've always been margin conscious. We are also market-wise, so we don't... Yeah, we don't compromise on the margin for incremental volume. That's a stated policy, Mr. Rajesh.
Great, great, sir. Thank you, sir. All the best. Thank you.
Thank you, Mr. Rajesh.
Thank you. As there are no further questions, we will now hand over the call to Mr. Reddy for his closing comments. Please, over to you, sir.
Yeah, thank you, Manish. We would like to thank, once again, thank you, for joining on the call. I hope you got all the answers you were looking for. Please feel free to connect with our team at Sagar or CDR should you need any further information. We will be more than happy to discuss them with you. Thank you again. Have a good day. Thank you.
Thank you. We will now close the call. Thank you, everyone.
Good day.