Good morning, ladies and gentlemen. Welcome you all to the 4Q FY2022 and FY2022 results conference call of Sagar Cements Limited. We have with us from the management, Mr. S. Sreekanth Reddy, Joint Managing Director, Mr. K. Prasad, CFO, Mr. Rajesh Singh, Chief Marketing Officer, and Mr. Soundararajan, Company Secretary. We will start the session today by opening remarks from the management, and then will be followed by a Q&A session. I request all the participants to be on mute mode during the course of the call. I would now like to hand over the call to Mr. Gavin Desa of CDR for his opening remarks. Over to you, Gavin.
Thank you, Manish. Manish has just introduced the management on Sagar Cements' Q4 and FY22 conference call. Welcome to the call. We'd just like to add that some statements made in today's discussions may be forward-looking in nature, and a note to this effect was stated in the conference call invite that has been sent to you earlier. We trust you've had a chance to look at the presentation. I would now like to invite Mr. S. Sreekanth Reddy to begin his opening remarks. Over to you, S. Sreekanth.
Thank you, Gavin. Good morning, everyone, and welcome to Sagar Cements' earnings call for the quarter and year ended March thirty-first, two thousand twenty-two. 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 volume growth has been fairly resilient during the quarter. We have seen realizations well trending higher compared to the exit price of March quarter, largely owing to higher input prices. Prices across raw material have seen a sharp surge, be it coal, freight and the packing material in the recent times. Demand momentum though has remained fairly buoyant, which has helped sustain the recent price hikes.
While we have started seeing some moderation in raw material prices, it would be a bit premature to comment if things have normalized on that front. The situation is fairly dynamic with extreme moves in either directions. It is better to observe them before commenting on a definitive trend. On a long-term basis though, we remain positive on the business and believe greater government allocation to infrastructure into low-cost housing projects would provide the requisite flip to demand growth, both urban and rural. Moving on to Sagar specific developments, we are pleased with our volume growth during the quarter, which has seen an improvement both sequentially as well as annually. Realizations have further improved compared to the exit prices of the quarter, largely necessitated by unrelenting increase in fuel prices. Demand sentiment as well is fairly buoyant, helping sustain the price revision.
Another noteworthy development was the investment by Premji Invest to help meet the organic and inorganic aspirations of the company. We will jointly work with Premji Invest towards setting up best-in-class governance process in our endeavor to drive the value creation to all our stakeholders. We are also pleased to announce that we have been awarded the Best Management Award by the Government of Telangana for its Mattampally unit, and our Gudipadu unit was awarded the state level and zonal level overall second prize for the Mine Safety 2022. In appreciation of the safety and other works pertaining to the mines by the Mines Safety Association of Karnataka under the aegis of Director General of Mines Safety, Government of India. Our cost rationalization measures and better inventory management helped us partly control the pressures of the input prices.
As indicated earlier, we have increased the usage of domestic coal and lowered our consumption of petcoke during the quarter, which has helped us lower our operational cost. Going ahead, we believe commissioning of our new units, coupled with strong balance sheet following the preferential allotment, position us well to deliver the steady and consistent growth. With that, let me now move on to our quarterly performance. We reported revenues worth INR 502 crore during the quarter, driven largely by volumes. Overall contribution from the two units commissioned during the year stood at 77,836 tons.
EBITDA for the quarter stood at INR 61 crore as against INR 104 crore generated during Q4 FY 2021, while margins for the current period stood at 12% as against 25% reported during the corresponding quarter, corresponding period last year. As mentioned earlier, we also had to operate in the rising input price environment, owing to which we registered a margin compression and also due to the startup costs that have been incurred at both the new capacities. The overall impact on the profitability would have been even more severe, but for our prudent procurement and cost rationalization strategy. Yeah, we have been working towards increasing the share of domestic coal to better manage the power and fuel expenditure.
Higher depreciation and interest expenses result in the loss for the quarter of INR 19 crore as against a INR 44 crore profit generated during Q4 FY 2021. This is also due to the borrowings that we have done for a potential acquisition. Average fuel cost stood at INR 1,596 per ton as against INR 870 per ton during Q4 FY 2021. Elevated prices of coal and petcoke resulted in higher per ton cost of fuel for the quarter. Freight cost for the quarter stood at INR 776 as against INR 742 per ton during Q4 FY 2021.
From an operational standpoint, Mattampally plant operated at 66% utilization level, while Gudipadu, Bayyavaram, Jeerabad and Jajpur plants operated at 83%, 72%, 30% and 9% respectively during the quarter. On an annual basis, net revenue for the operations for the year stood at INR 1,597 crore as against INR 1,371 crore generated during the last year, increased by 16% year on year. EBITDA for the year stood at INR 276 crore as against INR 400 crore reported during FY 2021, declined by almost 31% year- on- year. Profit before tax for the year stood at INR 104 crore as against INR 281 crore reported during FY 2021.
Profit after tax for the year stood at INR 59 crore as against a PAT of INR 186 crore reported during the FY 2021. As far as the key balance sheet items are concerned, the gross debt as on 31st of March 2022 stood at INR 1,503 crore, out of which INR 1,324 crore as a long-term debt, and the remaining constitutes working capital. Out of this, around INR 500 crore has been borrowed for a potential acquisition. Net worth of the company on a consolidated basis as of 31st of March 2022 stood at INR 1,309 crore. Debt equity ratio stands at 1.01:1. Cash and bank balances were at INR 163 crore as on 31st of March 2022.
The board of directors has recommended a dividend of INR 0.70 per equity share of INR 2, which is 35% on 130,707,548 equity shares of the company, translating to a dividend payout of around INR nine crore. That concludes my opening remarks. We would now be glad to take any questions that you may have. Thank you again.
Thank you. We will now begin the Q&A session. A reminder to all participants, you can ask your question by raise of hands in the participant tab of the Zoom platform. We will wait for a moment for the question queue. The first question is from Shravan Shah. Please go ahead, Shravan.
Thank you. Sir, am I audible?
Yes, sir, you are.
Yeah. Sir, first, coming on the pricing front. If you can help us in terms of the fourth quarter in East and South, how much the pricing that we have done. Post-March, in April and May, how much prices we have raised? Because in South, my understanding says the price increase is relatively lower versus other parts of India. Just wanted your thought on that.
Yeah. Good morning, Mr. Shravan. See our observation in the southern markets, especially the Hyderabad market. It has been flat from March to April. May there is a slight change, but we are still in the early part of May. From exit price of December to March, there has been an increase of around 15 rupees per bag. From March to April, they more or less remained flat. Bangalore, from December, which was at 365, to March it actually increased by five rupees. From March to April it increased by 10 rupees. Chennai, December was at 380. It slowly remained flat at 380 and more or less it is flat for the even April month.
Our specific markets of East, which includes Berhampur as well as, to certain extent Bhubaneswar, the December-March price was around INR 300 in Berhampur and INR 310 for Bhubaneswar. They increased to the April month, from INR 300 to INR 320 in Berhampur. In Bhubaneswar from INR 310 to INR 330. Indore we have seen December prices at INR 330, which increased to March by INR 10 to INR 340. From INR 340 they moved to INR 370 for the March month. This is our reading of the markets.
Are you feeling any pressure or what's the main reason do you see in terms of the prices not moving much in South? Any thought on that? Do you see that the remaining months of this quarter, May and June, can we see because the cost pressure, everybody knows the cost pressure. What is stopping in terms of the prices to go up?
See, I think the demand has been okay, but it has been lackluster, sir. It has been highly fluctuating. I think that could be one of the reason why the price did not follow the input price in terms of the curve. Yeah, that's what we strongly think. Our internal view, again, it's very specific to our internal view, is that it might continue similar for this quarter, maybe to the next quarter before it actually starts rising. To follow the input prices is what we strongly believe.
Okay. Sir, now coming to the question in terms of the demand and the costing part. If you can once again help us in terms of last time what we guided in terms of both the new plants utilization, how we are expecting for full year and broadly in terms of what kind of a volume growth that we are targeting for this year. That is one aspect. Second, in terms of the costing, I understand it is very difficult. The kind of fluctuation is happening in the coal prices.
Whatever is till now inventory we have, how do we see particularly, at least this quarter, in terms of the costing, how much we can expect it to go further up?
Yeah. Now, let me address the first question first in terms of our demand outlook. Our demand outlook is to do 5 million for the current year. This is primarily because we are expecting a flat to slightly positive kind of an uptick for the existing markets. With both the new plants reasonably ramping up, should be significantly contributing to this 5 million, sir. Out of 1.4 million incremental demand, we expect sizable volumes to come from both these plants, that is, Jeerabad as well as Gudipadu, and more specifically from Jeerabad, and to a lesser extent into Gudipadu. Because in the first half we expect Gudipadu to slowly ramp up, and only during the second half we expect Gudipadu to fully catch up.
All in all, we are expecting a 5 million ton consolidated kind of a volume outlook is what we have for the current year. Now going to the input prices, sir. As you rightly mentioned, it is difficult for us to predict anything. With the current inventories that we have, in the past, we used to maintain a six month inventory that got reduced to four and a half months now. We do have inventory of fuel. The only thing that we are not in control at this point of time is both the inward and the outward streams. That is exactly what we are not in a situation to predict. Overall, we are expecting the cost to move up anywhere between 2%-3% from the last quarter to this quarter.
Primarily on account of freight both inward and outward. Coming to the coal landed cost, as I mentioned, we are reasonably secured for this quarter and halfway through the next quarter, so we are not expecting a significant jump. For the domestic petcoke pricing, which has been in tandem with the imported petcoke. We do use close to 30% of petcoke. That might have some influence, but domestic coal, we are reasonably sure that availability and costs related, we hope to be in control for at least this quarter and halfway through the next quarter.
Sir, my last question is on the finance cost and the debt. The finance cost this quarter has significantly went up, so it is INR 47 odd crore. Will this run rate continue or will it decline? In terms of the debt, I understand that you mentioned that INR 500 crore is for acquisition. Anything you want to give a highlight? Would it be organic, inorganic or anything? Have you moved on the inorganic part, or can we materialize or can we expect some announcement at least in next one or two quarters? Ultimately, how do we see the debt by end of FY 2023?
We did a cap that our net debt would not exceed more than INR 800 crore-INR 850 crore, so that remains, sir. For this, final core debt which we have taken for an acquisition. As I mentioned, it's an acquisition, so organic is ruled out. We are definitely looking, chasing couple of things, and we are more than hopeful that it would get translate either at the end of Q2 to early part of Q3.
Regarding the finance cost.
See, I think finance cost, as I mentioned to you, sir, I think, we are in control of it. The only reason why it surged is because of this incremental funding which has been borrowed for the acquisition. That added up to a normal kind of less than INR 800 crore kind of a this thing. We don't expect a major shift in the real debt for the operation. The only debt that we have that we are servicing at this point of time incrementally is for the acquisition, sir. Once it gets materialized, I'm sure that also should get moderated to a great extent.
Okay. Thank you and all the best, sir.
Thank you.
Thank you. Anyone who has a question may please indicate by raise of hand. Dhiral, can you please go ahead with your question?
Yeah, good morning, sir. Sir, any reason for expecting a flat growth in the existing, core regions?
Yeah, Mr. Dhiral, can you please speak clearly, sir? Sorry, I just turned your mic on. Sorry.
Any reason for, you know, expecting a flat growth in our core regions?
Sir, his question is there any reason for expecting a flat growth in your core region?
Yeah. The expectation is that there is some amount of new capacities that are likely to come up. Given that scenario, we believe that whenever market is very tough, the incremental demand which we are expecting around AP and Telangana to grow at 5% to be attributed to the new capacities rather than we getting it. Same would be the case with the existing markets that we operate, both Tamil Nadu, Karnataka, Maharashtra. We do expect whatever is incremental growth is likely to go to the new capacities rather than to an existing one, sir. We have always been a market player, so we believe that would definitely be taken by the new capacities rather than coming to us.
Sir, how much capacities are coming up in here that we are talking about?
Mr. Dhiren, I'm sorry, your voice is very feeble, sir. Can you repeat the question, please?
Sir, how much new capacities are coming up in our core regions as you talked about AP, Telangana?
See, I think, over next 1.5-2 years, we are expecting, somewhere around, 9 million in these two states.
9 million capacity.
We are expecting 9 million in these two states, and another close to 10 million in Odisha.
Okay. Thank you so much.
Thank you.
Thank you. The next question is from Babu. Babu. Please go ahead, Madhu.
Hi, sir. Just because of the overall inflation and now there is a rate hike also, do you see that individual home building spend coming down? Second is, how is the spend in AP government, which is obviously facing some challenges in terms of the overall budget?
Yeah. See, I think with the inflationary kind of trends, what we have seen is the major reaction is to slow down. Even in the past, our experience has been that it's only momentary. Once the inflationary price trend gets set into the mindset of most of the people, we believe the trends to come back. A small difference is always a possibility, but that could be for a very, very short period, sir. At this time, the inflation impact is quite sharp. If you see, not only the steel, but all the other building materials, they have literally doubled over last three quarters to four quarters. Since the impact is very, very severe, we do expect some amount of slowdown, but it could be momentarily.
Once people get adjusted that this inflation is not going to tame down anytime soon, we expect the housing construction to recover, and recovery to be very sharp once the reconciliation happens or the inflationary pressures come down.
Just on the government spending on the AP.
The government spend, our experience is that, typically, post-March, it tends to slow down. That has not been the case in the current state of affairs. For first 15 days there were no orders, sir, from the government. For last few days, at least close to 20 days that we have seen, there has been surge of orders from Andhra government. We expect Andhra government to be very aggressive in their spends because it is part of their election commitment. Even in the past we have seen whenever any of the governments gear up for the elections, which is two years. I think that clock started now, so we do expect most of the state governments which will be going for election over the next two years to accelerate the spend.
That is the trend that we have seen, even now.
Okay, sir. Thanks.
Thank you. Rajesh, you may please go ahead with your question.
Yeah. Hi, sir. Am I audible?
Yes, Mr. Rajesh. Yeah.
Yeah. Hi, sir. Good morning. My question pertains to the interest cost on the debt which is borrowed for the acquisition. Is there any time period, any locking period for the same?
Yeah. It's borrowed from three institutions, sir. There is a definitive kind of locking period ranging anywhere between 18 months to two years, Mr. Rajesh Singh. Yeah.
What is the interest rate?
Yeah. The average cost is around 12%, sir.
How much? 12%?
Yes.
Okay, how about the other borrowings that you have on books?
The average is at around 8%, sir.
Okay. The blended will be close to 10% for you. This quarter, you know, as in the June quarter, you know, the realizations you are mentioning are broadly flattish versus last quarter. While, you know, the industry is well aware there is a sharp spike in the cost pressure. That would obviously be evident that last quarter has been a, you know, relatively weak one in terms of the margins. Are we staring at further, you know, sharp fall in margins for most of the southeast players, given that the pricing doesn't seem to inch up? April has been a push-out.
Yeah, Mr. Rajesh, this I will speak for myself. That's easier. Our experience is that, March quarter, as you have seen, there was a lot of pressure on the, both input as well as the realization.
Right.
In our case, very specifically, we had an issue because we were starting up two new plants. As you know, the startup costs usually tend to be higher. The operating capacity utilization of both the plants were relatively lower. That did put pressure on our margin. If you exclude that, we would have been a lot better, and we are a lot better. Getting into the Q1, sir, the ramp-up from these two actually is helping us. In our case, it's too soon, but we have seen that, though the realizations moved only to a certain extent, not to cover the major cost, but there has been a significant improvement in our EBITDA ton kind of numbers, sir. It's purely because the startup costs and everything have been done.
At the same time, the operational utilizations have also gone up for those two plants. With that, we have seen our EBITDA moving up, EBITDA per ton moving up significantly.
Okay. This is heartening to hear, sir. Could you quantify how much would have been the impact of the, you know, startup cost of the two plants in the last quarter numbers?
Yeah, both are relatively sizes are very different. All in all, it could be around anywhere between INR 100-INR 150 per ton could have impact on the consolidated.
On a total basis. Okay. This INR 540 would be close to INR 700 for you.
Yeah. It should be slightly higher than that. Yeah, it should be the case. Yeah.
Okay. Even taking that 700 as a base and realization improvement has been more or less flattish. Cost for sure would be going up by at least INR 30, you know, on an average for the 30 rupees go back means INR 500-INR 600 per ton. How do you see to counter that? I mean, you know, even factoring that in, is your margins expanding or you are benefiting from low cost inventories?
Yeah, Rajesh, it is not INR 30 quarter-over-quarter, sir. I think the overall costs have gone up year-over-year. It is almost around INR 40-50. There was a set off in the realization uptick. What we expect is that the realization's only moved up by, say, not even 10% of the cost input price as a percentage basis points. Volumes did help us to cover some amount of cost pressures. The margin compression we are expecting not as severe as it went by, unless prices move, it's likely that we still could be under some pressure as far as margin is concerned going forward, unless there is a pass-through of these prices from raw. Quantifying them is too soon.
I think we would be very happy to come back to you by end of this quarter, exactly how the trend lines are. I think it is too soon for us to really quantify the real impacts for the current year.
Okay. Great, sir. Thank you. All the best. We'll come back to you.
Thank you.
Thank you. Mangesh, you may please go ahead with your question.
Yeah. Hello, sir. Good morning. Sir, my question is regarding the fuel cost. In the presentation that you have mentioned, the domestic coal now constitutes almost 40% of the total. I just wanted to know where we can see it going forward. How much would that increase to? Secondly, sir, on the petcoke side. We have mentioned that the current price of that petcoke is almost double of that of what we have actually realized in 4Q. When do you expect that to hit our cost structure? Is it in 1Q itself or in 2Q?
Sir, we generally do on an average kind of a costing. There is nothing new that you should expect except for any further increase that is likely to happen. We have been consistently narrating about 60%-70% through the domestic coal. Since the Jeerabad plant also has come up, where we are sourcing the domestic petcoke. The percentage there is a small shift, but for that, we started switching both Mattampally as well as Gudipadu plant. It is almost 60%-70% domestic coal and 30%-40% would be the domestic petcoke. We are using 95% domestic petcoke at Jeerabad, sir. These are the costs which we have seen, which is on an average basis, sir.
We don't try to keep low cost. We, in terms of booking, yeah, we do it on an average inventory cost level. It may not alter the equation quite soon. It's a continuous kind of a process. There is nothing new that is expected on the cost side other than what we have already seen.
Okay.
For the freight, sir. Whatever is the incremental freight cost that would keep coming, that would be an addition to the overall kind of a cost.
Sir, another question I had on the markets that you're operating. If you can highlight, you know, what kind of demand was there in FY 2022 and how much growth do you expect in FY 2022, if it's possible.
See, our reading of the market is last year AP Telangana grew by almost 7%, sir. We are also expecting a 5% growth for the current year. Tamil Nadu has grown by 25%. These numbers look high because of the earlier year's base was very low. Here we are expecting a 5%-10% growth in these markets, sir. Karnataka grew by 20% last year, we are again expecting a 5% growth. Maharashtra grew by 15%. We are expecting a 7% growth. Odisha was flat for last year, but we do expect a 10% growth for the current year. MP grew by 20%. We are expecting a 5%-10% growth for MP for the current year. These numbers take back all the state's demands by two to three years back, sir.
These are not new numbers. With the growth numbers that I'm trying to project, it's going back to the pre-COVID kind of levels, sir. This is not new. Some of the states slowly start preparing for their election. Some states aggressively spend two years before the election. That also has been considered for this outlook. But the outlook has a small caveat that the inflationary pressures we believe to remain similar. Any upsurge could impact this demand outlook projections, Mr. Mangesh.
Thank you, Mangesh. We will take the next question from Dipen Sheth. Please go ahead.
Yeah. Can you hear me now?
Yes, sir.
Yeah. I was just wondering if I'm making a mistake in something I might have heard earlier. You're shooting for what kind of volumes in this financial year?
INR 5 million, sir.
You've done what about. That's about 50 lakh tons versus the 36-odd that you've done in the-
Last year.
FY 2022.
Yes, sir. Yes, sir.
Okay. You're going to do this at a time when costs have skyrocketed and the demand outlook is lukewarm. It's not red hot.
Yeah. Mr. Dipen Sheth said, see, from some 80,000 tons that we have done from these two ramped up assets or the new assets, we are expecting 1.4 million tons. We are not trying to-
Right.
Squeeze any new volumes into the existing markets.
Mm-hmm.
Now we are trying to disturb any of them. At best we will be displacing some of those material which was coming from far off into the markets that we are going to service, Mr. Dipen Sheth.
Okay, maybe you'll do well there. The other thing on your balance sheet structure. You've raised money at 12% for acquisition.
Yes, sir.
INR 300-odd crore.
INR 500 crores, sir.
INR 500-odd crore. You're sitting on the cash right now?
Yes, sir.
You raised this sometime in November, right?
December, sir.
December. Okay. This is what shows up as investments on your consolidated balance sheet, about INR 300-odd crore?
Yes, sir.
Some of this and the cash and all of that. You funded this at 12%. I'm sure you're not getting a 12% yield on whatever investing you're doing right now. Your cash
It's an acquisition, sir. Right now we obviously would not get the yields proportional to 12. Yeah, this is yeah, right now the parking is happening at a very low kind of yields. This is very strategic investment. The yields are not likely to happen. It's more at a position that we expect the yields to happen.
No.
We are not doing any treasury. We are not doing any treasury management at this point of time.
No, no. I'm okay with that, sir. The question I'm asking is that it's okay that the acquisition might be very lucrative, and for a short while you will get low yields on your deployment.
Yes. You are correct, sir. You are correct.
In that case, I would hope that the deal is pretty much sealed. I'm not sure. I'm not very familiar with the company. I'm not sure if there is a public announcement to that effect. Even if you haven't made such an announcement, can I take it as a given that it's in the pipeline?
It is definitely in pipeline, sir. In fact, we have two choices. I would not say if they would have firmed up, obviously we would have come back to the market to announce.
Right.
The possibility of these deals happening is very, very likely, sir.
Again, I don't want to sound nasty here, but to acquire these assets with money borrowed at 12% makes sense to us?
Yeah, it made sense to us, sir. Historically, we have never made the wrong judgment on our acquisitions, Mr. Dipen Sheth, so.
Okay. Just one bookkeeping question on the balance sheet. On the asset side, on the consolidated balance sheet, the last items for both non-current assets and current assets have increased materially over the year. If you look at under non-current item I, other non-current assets at INR 135 crores. Under current assets, item C, other current assets at INR 217 crores, which has more than doubled. Can you just share some color on what these items might cover?
Yeah. One minute, sir. Yeah. Mr. Dipen Sheth, can we revert to you with the detailed explanation on this offline? If it is okay with you.
Sure. I'll put my email ID.
Okay.
telephone number in the chat box. Thanks very much.
Okay. Thank you, sir. Thank you.
Thank you. The next question is from Sanjay Nandi. Please go ahead.
Yeah. Good morning, sir.
Good morning.
Yeah. Just to mention, like, there happened a cost escalation of INR 40-INR 50 per bag on a YoY basis. Am I right, sir?
Yes, sir.
Can you just quantify, like, what is the escalation that happened on a QoQ basis, like, from the exit of March quarter in terms of cost per bag, so that we can just measure it out, like, what kind of pricing you have taken?
Yeah. Mr. Sanjay, we have not done for the per bag, but we would revert to you. We would be happy to share that.
Okay. The second question is like that, sir, we have just thinking of doing some acquisitions. Can you just quantify the number, like what kind of size we are thinking of, or it's there in your mind?
Kindly bear with us. We are not very far. I think by either end of Q2 or early part of Q3, we'll be very happy to share all the details with you, Mr. Sanjay Nandi.
Okay. Thank you so much. Wish you all the very best, sir. That's all my side, sir.
Thanks.
Thank you. The next question is from Madhu Babu. Please go ahead, Madhu.
Just one question. The peak season is like passing without a good tailwind for us because price hikes are not up to the mark. From maybe June, July monsoon will start. How do you see overall pricing, sir? Is it still possible to raise pricing even if monsoon comes and all because the first half has not been that good?
Historically, there has never been a correlation between price to demand to the season. But we do think the first half probably still could be a challenging kind of a thing for us to even think. We are halfway through Q1, which is supposed to be one of the best quarters. We are halfway through. Price increase happened, but not to a stage and scale that, you know, industry was looking for or for the pass-through to happen. We are still left with another month and half in the current quarter and probably a month of good this thing even into the Q2.
I'm hopeful, but still, the outlook that we internally have factored is that it could be a flattish kind of first half without any major kind of changes is what we are looking at. From here on, any increase probably potentially could be pass-through. Recovery could take some time.
You're hopeful that even in monsoon time, price hike can happen? I mean, like maybe July or no?
We have seen that it has no correlation in the past. There were times when, you know, in the monsoon season, prices actually moved up because volume was shifting. We have seen in the past. Nothing can be ruled out on that particular front.
Another thing, sir, that acquisition target. Has the valuation expectation moderated for that target entity because of the current situation?
It doesn't change in the short term, sir. It's too soon. There are two targets that we are looking at. It helps when the market is under pressure, but it may not significantly alter the valuation if the valuation itself is very low, sir.
Okay. Okay, sir. Thanks.
Thank you. Shantanu Kundu, please go ahead with your question. Shantanu, you may please unmute your line and go ahead with your question. Your line is not audible, Shantanu. May we request Shravan Shah to go ahead with his question?
Yeah. Sir, what was the number for fourth quarter?
You're looking at the trade non-trade shares or the auditors?
Yeah. Trade non-trade, sir.
See, typically we have always been around 65%-70% trade, sir. Non-trade keeps expanding based on the government demand. Q4, we were close to around 65% trade. Yeah.
Okay. Then, sir, blending this quarter has came down from 50% to 46 odd percent. Now with both the new plants, will this impact?
Our outlook for the current year on the blending is 60% blended and 40% OPC, sir. I think this is purely possible because of the ramp-up of the new capacities. These two new capacities are in the markets where blended cement is in higher demand.
Okay. I understand our CapEx definitely would be much lower for this year, but just trying to get a number, any number you want to throw for this.
Around INR 30 crore is the operational CapEx that we have kept for the current year, sir.
Okay. Sir, we were previously thinking in terms of the WHRS at Gudipadu, but we haven't decided as it has that.
It takes time, sir. It is work in progress, so it is definitely not due for the current year. If any changes would happen, we would be very happy to come back to you. We are actually saying that.
Sir, currently in terms of the gap between trade non-trade price, would be how much?
Sir, I cannot comment for the market. In our case, the gap is very, very small, sir. We generally don't chase the non-trade orders as aggressively. For us, the gap between trade and non-trade is very, very limited. It is internal cap that we have kept is 50 INR a bag. It cannot go beyond that in our case
Okay. Sir, broadly, whatever the diesel price hike which has happened, and you were also mentioning that, inward, outward freight. How do you see it inching up on a quarter-on-quarter basis for this quarter? Can it be 5% plus kind of a thing because?
Sir, I wish I could give you an answer in a very straight fashion. We are clueless, sir, because that's one which has been going on forever. Just to give you an update, the diesel price alone moved. Yeah, it moved by 30% from whole of last year. Yeah, it has moved only by almost 10% from March to April. From April to May, we are yet to track, sir. It's something which is a challenging kind of an input number. We would be very happy to share offline on the impact of diesel on a per bag, what has happened in the past, the influence of diesel on the overall kind of a cost.
Broadly, whatever the diesel price hike which has happened in the last one to two months have entirely been passed on to the
Sir, see, the cost, as I mentioned, realization moved up by only 2%-3%.
No, I.
Cost moved up by 38%.
No, no. Sir, I am not trying to understand in terms of the realization. I'm trying to understand in terms of the passing on to the freight operator through which we use for-
Sir, freight operator would not operate it at loss, sir. It's probably at best he will take it for a month, but after that you need to come back and direct. Come back and update him. In our case, the service providers generally, it's an agreement, so there it's a cost plus kind of a function, sir. That gets passed on fairly quickly. They don't take any load on that.
Okay, okay. That's it from my side. Thank you and all the best, sir.
Thank you.
Thank you. This question is from Mr. Shantanu Kundu. The question is about raw material cost reduction in Q4. What are the reasons for that?
Sir, it is very simple. The blending reduced, so the matching raw material costs have come down. For that, there is no other.
Okay. Thank you, sir. Anyone who has a question may indicate by raise of hands. Sir, a couple of questions from my side. Firstly, on the ramp-up of Satguru, how are things moving there in terms of placement, in terms of, you know, how are you placed in terms of category over there, and how are the volumes picking up?
See, we don't believe in category, Manish, so it would be a challenge for us to say that. From the market leader, the delta is anywhere between INR 10-INR 15, sir. The positioning is very firm, so we did not digress from the initial narration what we have done. That we will not compromise on volumes, but not the realization. That actually helped us position well.
Yes.
The ramp-up right now it is operating close to around 60%.
Oh.
We are more than hopeful by end of this year.
60%.
For the full year, we might be very close to 80% as indicated.
Got it. The same for the Odisha plant?
The Odisha plant is just started, so it's too soon for us to take any call. We would be very happy. By end of this quarter, we should be in a better situation to comment on the ramp-up. From a position perspective, we are not new to the market. We have always been a strong player there. We remain there. Some of the markets which we are servicing from a with a higher lead distance, actually we are scaling on that.
Sure, sir. My second question was on tie-up of coal. You mentioned you have four and a half months of inventory. I mean, this is both locked in terms of price and volume? Or
No. Typical FSA only gets locked in with the quantities, sir, not with the price.
Okay.
We are locked in for the full requirement of around 600,000 tons from Singrauli. There is no locking for the prices. There is a commitment for the quantity. Yeah. The only issue is the next couple of months it could be a challenge to get material from them. Obviously, their priority is to go into the power units at this point of time. For that, we would have actually gone back to the 6 months inventory. We are good. Even though there could be some delays in the deliveries, but we do have inventory on the ground. The commitment is literally at 70%. At a consolidated level, we have the full commitment of the domestic coal.
Got it. Sir, does that mean that with the peak power demand going down over, you know, starting June, July, we might see those supplies getting-
Yes, sir. Once the supply restores, sir, we are more than hopeful, and we will be going back to the six months kind of an inventory, where you know, the control on the coal price can be at least predicted at least for 1-2 quarters firmly going forward, sir, once this peak season is off. Because we believe that it should be on the ground for us to have a control. Right now we are only sitting on four and a half months kind of an inventory. Once this might come down a bit over next month and a half, but we would go back by the monsoon time for us to go back to the six months kind of an inventory.
Got it. Thank you, sir. Anyone who has a question may please signal by raise of hands. Shravan, you may please go ahead.
Yeah. Sir, lastly on the Premji Invest Trust that invested in our company, your thought in terms of how they will help us in terms of overall strategically improving our business plan, our business model, performance or anything, whatever you want to highlight.
No, I think the size and the quality of the management that they have would obviously. We strongly believe that the processes and all that we are doing would get enhanced with their additional experience and the capabilities that they have. Very specific to business in terms of will it increase the scale and all? It might, but it's too soon for us to take a call on that. For sure, on the help on, you know, the overall kind of business process improvement, we strongly think that their contribution from their inputs and everything could be of a phenomenal value for us, sir.
Okay. Thank you, sir.
Thank you.
Thank you, sir. That was the last question. If you have any closing comments?
Yeah. Thank you. We would once again like to thank each one of you for joining on the call. I hope you got all the answers that you were looking for. Please feel free to connect with our team at Sagar Cements or at CDR should you need any further information. If you have any further queries, we would be more than happy to discuss them with you. Yeah. We would definitely be sharing all the information which we told that we'd be sharing offline. Thank you again, and have a good day. Thank you.
Thank you. You may now disconnect.
Thank you, Manish.
Thank you, sir.
Uh.