Q1 25/26

Jul 23, 2025

Ladies and gentlemen, good morning and welcome to the earnings conference call of Dalmia Bharat Limited for the quarter ended 30 June 2025. Please note that this conference call will be for 60 minutes and for the duration of this conference call, all participant lines will be in the listen-only mode. This conference call is being recorded and the transcript will be put on the website of the company. After the management discussion, there is an opportunity for you to ask questions. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Before I hand over the conference to the management, I would like to remind you that certain statements made during the course of this call may not be based on historical information or facts and may be forward-looking statements. These statements are based on expectations and projections and may involve a number of risks and uncertainties such that the actual outcome may differ materially from those suggested by such statements. On the call, we have with us Mr. Puneet Dalmia, Managing Director and CEO, Mr. Dharmender Tuteja, CFO, and the other management of the company. I would now like to hand the conference call over to Ms. Azdi Mittal, Head of Investor Relations. Please go ahead. Good morning. Welcome to Q1 earnings call of Dalmia Bharat Limited. We've uploaded our results and the presentation on the website. I hope you've had a chance to go through it. With this, I'll hand over the call to Mr. Dalmia for his opening remarks. Thank you, Aditi. I will break my opening remarks into five sections. The first section is Economy and demand. The second section will be capacity and our expansion plans. The third section will be Prices and future outlook. The fourth is our cost reduction journey and the fifth is our key priorities. With that, I start with my first section on the state of the economy and demand. Fiscal 2026 has started on a positive note with India surpassing Japan and becoming the fourth largest economy in the world. As the momentum continues, I firmly believe that our country is well on track to become the third largest economy before the end of this decade. Globally, even though the macroeconomic sentiment has been hit by ongoing trade negotiations and heightened geopolitical pressures, India clearly stands out. As per RBI, the economy is expected to maintain its growth momentum with GDP expected to grow at 6.5% in financial year 2026. The resilience that India has displayed bodes well for the cement sector. I believe that in financial year 2026, the sector should be able to deliver a healthy cement demand growth of somewhere around 6% to 7%. This growth will be supported by strong government spending and a booming housing sector. Having said that, the start to the year has been a bit slower than our expectations with uncertainty from cross-border tensions and early arrival of monsoon despite robust spending by the central government on infrastructure. In fact, the government appears to have front-loaded its CapEx spending, INR 2.2 lakh crore in April and May alone. That's already 20% of the full year target of INR 11.2 lakh crore, one of the highest spends in the first two months ever. However, at the same time, CapEx spending at key states like Tamil Nadu, Karnataka, and West Bengal declined. Based on current trends, we believe cement demand grew in the low to mid single digits in Q1 of FY2026, but we expect it to pick up pace once the monsoon recedes. Now I come to my second section, capacity and expansion plan. Coming to the supply at the industry level, in the next two years almost 70% of the new capacity will be added by the top four players, which will accelerate the pace of industry consolidation. I believe that this is beneficial for the sector as a whole in the long run. We continue to invest in the sector with a clear vision of becoming a Pan India player as we also believe that entry barriers will continue to rise and the long-term returns in the sector will be attractive. Now, as promised, I would like to give a roadmap for our expansion plan. Before delving into it, it is crucial to outline our expansion philosophy. Our strategic imperatives are twofold, one to become a Pan India player and two to establish a significant presence in every market that we operate in. Consequently, our growth strategy focuses on expanding into totally new and untapped regions or increasing capacity in existing areas where we are already operating at high utilization or cater to white spaces in our existing regions. In line with the above, the broad overview of our roadmap is as follows. To start with, in February 2025 we have already announced an investment to establish a 3.6 million ton per annum clinker unit in Belgaum along with a 3 million ton per annum grinding unit at our existing Belgaum plant, coupled with a new 3 million ton greenfield grinding unit in Pune. The Belgaum grinding unit will primarily cater to the markets of North Karnataka and Southern Maharashtra, while the Pune grinding unit will serve the untapped western Maharashtra market. Second, the board has approved an investment of 3.6 million tonnes per annum clinker unit with a 6 million tonnes per annum grinding unit at our existing Kadapa plant, supported by a 3 million tonnes per annum bulk terminal in Chennai at an estimated capex of INR 3,287 crore. Our Kadapa plant is already operating at high utilization levels and this investment will help us strengthen our presence in Andhra Pradesh, Southern Karnataka as well as northern Tamil Nadu markets. Third, with the upcoming commissioning of a new clinker line of 3.6 million tons per annum at Umrangshu in Assam, we will become clinker surplus in the Northeast region and we are evaluating the best location to add additional 2 to 2.5 million tonnes per annum of grinding capacity, which will be a split grinding unit. This can be done within 12 to 15 months of the date of commencement. With these three projects, Belgaum, Kadapa and further expansion supported by Northeast clinker, we would add 14 to 14.5 million tons per annum of cement capacity and this would take our total cement capacity to around 63.5 to 64 million tonnes per annum by financial year 2028. Further, we are working on finalizing a new 6 million tonnes per annum greenfield expansion in Jaisalmer to access the North India market. Land purchased for the plant and split grinding units is already almost completed. The mining lease has been executed and the EC is under process. My sense is that if we can break ground between April and June 2026, we can commission the plant by March 2028. However, before committing to the Jaisalmer project in North, we would like to wait for the outcome of our bid for acquisition of Jaiprakash Associates Limited. All these organic expansions have been meticulously reviewed and are within our defined capital allocation framework. These projects will be funded through a mix of internal accruals and debt. Now I come to the next section on prices and their outlook. I will briefly touch upon the pricing trends. While the pace of cement demand did slow down a bit, we have seen a very healthy improvement in prices across our key operating regions. The southern region in particular saw a good recovery in prices this quarter, bouncing back from the lows we witnessed last year. In the east, prices largely held steady, maintaining the gains made in the previous quarter. Even with the early onset of monsoon, the spot prices of cement are holding up and are almost at similar level to the Q1 average cement prices. We remain reasonably optimistic that these prices will hold. As you are aware, we have been consistently working on building our brand equity in the market. We are investing in our brand, deepening our distribution, and improving our price position, which appears to have started giving results. I believe that our realization improvement in many markets has been higher than the price increase, which is visible in our 9% QoQ NSR improvement. This is a long journey, but we are happy to see some green shoots, which we hope will keep on building as we go forward. On the cost side, we are consistently working to deepen our cost position as one of the lowest cost cement producers. We are committed to reduce INR 150 to 200 per tonne over the next two-year period and are working on the identified levers as we have stated earlier. Now I come to the key priorities. I'm personally very happy with the journey that we have achieved so far, and I think this is the time to have conviction in the future and increase our investments in India and our people. We are going to do exactly that as we embark on the next phase of our journey. My priorities are very clear: build capacity for the future, staying focused on our long term goal to become a Pan India player while staying within the guardrails of our capital allocation framework. 2. Deliver profitable growth through doubling down efforts on strengthening our brand equity. This is particularly important to scale up our volumes, improve utilization levels, and enhance NSR. We will continue to deepen engagement with our channel, both dealers and sub-dealers. We have already streamlined the processes and policies, enhanced the experience of our channel, and most importantly boosted the productivity of our own sales force, and we intend to continue doing the same. Second, we further want to deepen our cost leadership with investment in building capabilities and improving operating efficiencies, and third and most important, we want to build, develop, and sustain a strong leadership pipeline and younger team while creating a caring culture within the organization. I think the best for India and Dalmia Bharat Limited is yet to come, and I'm very excited about the journey that we are setting ourselves on. With this, I want to hand over to our Group Chief Financial Officer, Mr. Dharmender Tuteja. Over to you, Dharmender. Thank you. Financial Performance Regarding sales volume growth, first of all, I'm very pleased with our performance this quarter as we have delivered the highest ever EBITDA of INR 883 crore during the quarter. This EBITDA growth is not only supported by the market price improvement in our operating regions but also because we have started to see an improvement in the quality of our sales. Our share of trade sales improved to 68% from 64% last year. Premium product mix also stood steady at 22% during the quarter. Direct dispatch percentage, which had been hovering around 55% over the last several years, has now reached 62% during the quarter, demonstrating a significant positive shift. I believe that we are taking small but steady steps to improve the quality and sustainability of our sales performance, and I am hopeful that this journey will continue. Moving on further, while our sales volumes degrew 6% YoY to 7 million tonnes, if we look at the sales from Dalmia plants, that is, excluding the tolling volumes from Jaiprakash Associates Limited plants last year, our volumes remained flattish in Q1 FY2026. Last year, the first quarter was the last quarter when we had the sales volume under tolling arrangement. From Q2 FY2026 onwards, we will have a clean base for YoY sales comparison. The revenues have remained flattish at INR 3,636 crore in Q1 FY2026. Coming to the cost line items, our raw material cost per tonne of cement production increased by 8.5% YoY to INR 791. This increase was primarily due to the new mineral tax imposed by the government of Tamil Nadu. On the other hand, power and fuel cost per tonne of cement production declined by 2% YoY to INR 981. This was driven by a decline in fuel rate from $106 per tonne in Q1 of FY2025 to $100 per tonne in Q1 of FY2026. The blended fuel cost during the quarter stood at INR 1.33 per kilocalorie. Spot prices are currently hovering at around $108 per tonne during the quarter. We have commissioned 26 megawatt of renewable energy capacity through OpEx model. This has increased our renewable energy consumption percentage to 41% in Q1 FY2026 from 35% in the last financial year. The CC ratio also improved from 1.67 in Q1 FY2025 to 1.71 in Q1 FY2026. Our logistics cost during the quarter increased marginally by 2% on YoY basis to INR 1,135 per tonne. Though our lead distance increased by about 8 kilometers to 280 kilometers in Q1 FY2026, as I mentioned, our direct dispatch percentage improved in the positive direction to 62%. Our absolute EBITDA improved by 32% year to INR 883 crore and EBITDA per ton. That works out to INR 1,261 on per ton basis and this is a 40% increase on a year-on-year basis. Our EBITDA margin during the quarter was 24.3% in Q1 FY26, which is a good jump of almost 5.8% from the same quarter last year. During the quarter, we accrued INR 84 crore in incentives while collections are lower at INR 42 crore, which is typically seen in the first quarter of the year. We expect collections to improve in the rest of the year. The incentive outstanding at the end of the quarter was INR 780 crore, including INR 250 crore from the Government of West Bengal. Coming to the ongoing expansion projects, while Puneet Dalmia has detailed out the expansion plan, I'll give you a brief overview of the ongoing projects. Our clinker unit at Umrangshu is nearing completion and we plan to start trial runs in September this year. With this, the commercial production should start in Q3 of FY26. This will take our total clinker capacity to 27.1 million tonnes. The supporting GU for this clinker was already commissioned in March 25 at Lanka, Assam. The work on the Belgaum Pune project is in full swing with all major orders placed. While civil work is under progress, the project remains on track for completion and is expected to come online by the end of FY27. During the quarter, we have incurred capex of INR 612 crore with majority of it being spent on Umrangshu Clinker Line and Belgaum Pune project. Besides maintenance line, land, and ROI projects, for the full year FY26, we expect our capex spending to be about INR 4,000 crore. Also, while Puneet Dalmia has already mentioned, I wanted to clarify on the Kadapa project which the board has approved yesterday. I believe there is some confusion on how it is being shown in our earnings release. The project has a 3.6 million ton clinker capacity in Kadapa along with 6 million ton of grinding capacity in Kadapa itself. In addition, we are setting up a 3 million ton bulk terminal in Tamil Nadu to serve the North Tamil Nadu market. The cement for this bulk terminal will come from Kadapa itself. Moving on, during the quarter, the company through its subsidiary has sold 3.7 crore shares in IEX. Post this sale, our holding in IEX has been brought down to 10.8%. That is about 9.6 crore shares. Our gross debt at the end of the quarter stood at INR 6,456 crore while net debt was at INR 873 crore. The resultant net debt/EBITDA stands at 0.33 times. During the quarter we had issued NCDs and raised INR 950 crore of debt. I'm happy to share that the NCDs were well received in the market. Even with the ongoing expansion projects, we remain confident of staying below the two times of net debt/EBITDA threshold which was outlined in our capital allocation framework. Before we open the call for question answer, I want to clarify on a couple of legal points. As you are aware, the West Bengal Government has enacted the Revocation Act on 2 April 2025. The Revocation Act revokes and discontinues the incentive schemes retrospectively from the date of implementation of the respective schemes. Accordingly, the order of the Honorable Calcutta High Court directing release of incentives amount to us will be adversely affected. The company has been legally advised that we have a good case to challenge the vires and constitutional validity of the Revocation Act. The company will take appropriate legal recourse to protect our interests. Second, there was a news report regarding the income tax authorities seeking to reopen the income tax assessment for the financial year 2011. They have already filed special leave petition before the Honorable Supreme Court pursuant to which an interim stay has been granted by the Court. We believe the department's case is unsustainable. With this now, I open the floor for questions. Thank you very much. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Amit Muraka from Access Capital. Please go ahead. Hi. Thanks for the opportunity. My first question is on volume and market share. You have been flat year over year even if I exclude the volume of tolling last year, and I'm generally the understanding is south and east markets did well in Q1 versus last year. Could you just talk a bit about the market share losses and how do you plan to arrest it? I think you know the story is not the same across all states. As I said in my earlier remarks in the last earnings call, our priority is to balance volume growth and profit margins in each market, and I think that strategy is paying off great dividends. We have improved our price positioning in many markets. We have improved realization growth better than what the industry has done with respect to the rebounding of the prices, and we think that we will continue with this strategy where we will improve the quality of sales and we will ensure that we achieve profitable volume growth in the coming quarters. I think overall I am absolutely delighted with the progress. Our brand is getting stronger, our distribution is getting deeper, and our sales productivity is improving. I think the same approach will be done on a granular basis, market by market, in the coming quarters. Thank you. Sure. There is inventory sitting at the end of the quarter. How much really was the production, and what is the inventory sitting at the exit June? This buildup of the inventory typically happens every first quarter because by the end of the year typically entire industry, they are able to sell all their stocks from the plants as well as the gifts, and that gradually builds up in the first quarter and it remains flattish. During Q2, Q3, and Q4, again it gets released. That is typical. This is seasonality effect. It's nothing unusual. This year the number is big in. PNL, which is why you're asking. Sure. It's the same season, slightly higher than the bio wide. I think about INR 100 crore also. I will come back in the queue. Thank you. Thank you. The next question comes from the line of Ashish Jain from Macquarie India. Please go ahead. Hello. Yes, Ashish, please go ahead. Hi, sir. Good morning. My first question is on expansion like, you know, we. Are currently guiding for roughly INR 63 million. Tons on in March 2027 aspiring to 75 by 2028. We are still saying that Jaisalmer. Is dependent on Jaiprakash Associates Limited acquisition because Jaiprakash Associates Limited. Will not be adding so much capacity. How are we thinking about capacity? Firstly, even if I add Jaisalmer and JAL, let's assume both happen. Still, the visibility for 75 is actually. Can you just speak a bit about, you know, capacity? How are we thinking and why are we so hesitant, you know, in terms of fallout on addition? I think first of all we are not at all hesitant. I think we are going all out to develop the projects and as I said we can press the button on construction in the first quarter of next financial year in Jaisalmer. That will still give us time to commission this project by March 2028. The Jaiprakash Associates Limited acquisition is under process. I think there are several scenarios which can play out. As you know, there is a 5 million ton clean asset with JP Rewa and Shankargarh Chunar. Then there are two other options. One is BJCL, which was a joint venture with Steel Authority of India in Bhilai. There is an arbitration going on with UltraTech for a clinker plant in Uttar Pradesh. JP is minimum 5 million tonnes of cement and it could be greater than that depending upon how the other two play out. I think we are absolutely not stopping in any way. All we are saying is we will review the position. In any case, we can't press the button on Jaisalmer today. We are taking all effective steps. Land purchase is done, mining lease is done, environment clearances in process. We have to review the situation in March 2026, which still gives us enough time to complete the project by March 2028. I think we just want to remain flexible and we are just absolutely not tentative. We are just going all out to develop projects. In fact, we are even developing projects for our next phase which will take us to 100 million plus by financial year 2031. I think developing projects and creating a state of readiness for our capital expansion pipeline so that we can deploy capital organically is in full swing in the company. We want to be just flexible to see what happens and take a call once a major acquisition like Jaiprakash Associates Limited plays out fully. Could you just differentiate between growth in South and East? I know normally we don't share it. Even Amit asked this question, given. The divergence between what we have reported, even if I adjust for Jaiprakash Associates Limited, looks quite surprising. Is it possible to give some. Color in terms of where we have. Been more cautious on market share versus margin strategy? I don't think we can give that granular, you know, share that granularly. All we can say is that there are markets where we want to prioritize margins, there are markets where we want to prioritize market share. I don't think we would like to reveal our state by state strategy on this call. I'm just asking east versus south state. By state is not what I'm looking for. It's like we also don't want to reveal our region-wide strategy. Thank you so much. Thank you. The next question comes from the line of Divesh Agarwal from IIFL Capital. Please go ahead. Thank you for the opportunity, sir. Firstly, just wanted to understand you are putting up more capacities in South and you said that the utilization levels are higher. What is the difference between your East utilization versus South utilization? If you can give some sense on that. That. I just said that we don't share region-wise data, and I think we will continue to maintain that stance. Thank you. In terms of difference also, whether there will be a 10%, 20%, 10% difference between the utilization between the two regions, that will also help to get us some idea. Even if you ask that question in three different ways, we are not going to reveal our region-wise utilization or a state-by-state or region-by strategy. Thank you. No problem sir, no problem. Secondly, sir, you said in terms of planning exercise you have seen improvement in realization better than what the price hike has been. Just wanted to understand better what is the current gap that you have in each region or basically on overall basis also and what is the target to narrow that and how do we achieve this? Can you please repeat this question? I didn't understand this. No. I'm saying you did mention that the increase in the MSR for us has been higher than the price increase in those regions. Right. Basically there would have been some gap in terms of pricing between us and some of the other brands. I wanted to understand what is the gap at this point in time and what is the target to narrow that gap to and how do we intend to achieve that? I think again this depends. There is a different state-by-state and even in terms of the different brands that operate in each state. I would just say that we want to be the top priced brand in every state possible and it is a journey, it's going to take time. We also. Don't want to do sale with low margins, even if that means that in the short term we have to hold back and do higher quality sales. I think in the long term that is a better strategy to follow, and we want to operate in those customer segments which give us better margins. I think this is broadly in the trade segment. We want to improve price positioning in some of the markets where we are weak. In some of the markets where we are strong, we want to continue to premiumize our product mix, and even within non-trade, which is the institutional segment, we will choose our market segments carefully to improve the quality of sales. It's hard for me to quantify right now as to how much is the further spread that's possible. I can say that overall, with continuing to deepen our cost leadership and improving our NSR, we should be able to deliver top decile EBITDA per ton in the industry. I mean, I think that's our endeavor. Thank you. We take the next question from the line of Ritesh Shah from Envestech. Please go ahead. Ritesh, if you can please unmute your mic. Yes, please go ahead. Sorry for that. Thanks for the opportunity. Sir, a couple of basic questions. At the start of the call you indicated our endeavor is to go on. A pan India basis. Now we have just announced something which is more in South and to some extent in western India, including Pune. The question is why didn't we decide to go for the Rajasthan optionality that we have versus what we have just announced? I think I've made it very clear in my call that our overall strategy is to create a pan India footprint while creating significant presence in each of the markets that we operate in. I think we are not going to choose one or the other. I also made it clear that our Kadapa plant is operating at high utilization levels. It is important for us to continue to deepen our presence in southern, in northern Tamil Nadu, southern Karnataka, and Andhra Pradesh. We are developing projects in regions that we don't operate in. We spoke about Jaisalmer, we spoke about JP which is central India. I think we are looking at all of this in a very holistic manner, and both the things in terms of pan India footprint as well as significant presence in our existing markets are important to us. Sure sir. Second related question. I think EDK did come up with a notice. I understand it's a provisional attachment with respect to Kadapa limestone around 417 hectares. I understand it's a provisional attachment. We would have challenged it. Do you think this is any form of risk or is it something that we should just forget and move ahead? The reason to ask is we have existing operations and we have just announced incrementally also expansions over there. In that light, how should we look at this particular variable? I think, as you said, this is a provisional attachment. We have challenged it and we think the case is unsustainable. We do not see any risk with them in terms of expansion or in terms of mines. We have been operating this for the last 14 years and there has been literally no issue. We don't foresee any risk with respect to disrupting the operations. Just last question. I think in the earlier remarks you did indicate that our focus has been on sales productivity. However, if one looks at the annual. Report over the last four years, the discounts, what we have given in the marketplace has effectively doubled, and it's nearly INR 1,200 per tonne. How should we understand our marketing strategy? This number of INR 1,200 per tonne is quite high. I think this is exactly the point I made. There are markets where we have made sales on lower margins. There are markets where we have to improve our quality of sale, we have to improve our brand positioning, and we have to increase, deepen our distribution. That is exactly what we are doing. That is why I said the green shoots are starting to be visible this quarter and hopefully they will continue in the coming quarters. This is a long journey. The journey has started and I am happy with the progress. Regarding the high level of discount which you pointed out, let me also clarify that last year the industry tried to increase the prices, but most of the times they were not holding and they had to be given back as discounts. Particularly, this tried increase but not made effective, and to be compensated by the discount also shows up in the discount which you see in the annual report. Right. Just a follow up. Puneet, how do you look at this number of discount versus the net pricing? Effectively, it is a cost to the company. Is it something that you put as a KRA for your sales and marketing folks that this number should actually decline, which will propel effectively a good industry wide practice as well? I think this is an issue which we are looking at on what is the best way to streamline this because this is an area which requires deeper deliberation. I don't think there is an easy answer for this. There is an industry behavior issue and we are operating in a very competitive environment, and depending upon how the overall conduct is, I think we have to examine how we operate. In a competitive environment, some of these things happen, and in this industry the pricing is a little bit opaque. I think how we bring more transparency in pricing is a constant endeavor that we are trying for. In some markets where we are strong, we are able to take tough calls. In markets where we have to build stronger distribution and our brand is weak, we have to work harder to build strength, and then we can do this. I think it's a journey, and I feel that over time, there'll be more transparency around this. Sure. Thank you so much for the answers. I'll join them. Thank you. Thank you. The next question comes from the line of Rahul Gupta from Morgan Stanley. Please go ahead. Hi, thank you for taking my questions. Puneet, I have two questions. One, we have seen strong pricing environment during the quarter, right, and to some extent this has sustained in July as well. This has happened in the midst of relatively weak demand environment. How should we look at this? Are we seeing pricing discipline in the industry and moving away from competitive environment, or is this just a near term phenomena and we may see increased competitive environment once we move out of monsoon? Any color on this will be very helpful. That's my first question. Thank you. What's your second question? My second question is, sure. My second question is the strategy is now to focus on profitable growth, going micro markets as well. Now, assuming industry grows at 6%, 7%, 8% for multiple years and given Dalmia Bharat Limited's low utilization levels, are we in a way moving away from 75 million ton and 110 to 130 million ton capacity targets from here? Thank you. Let me first take the pricing issue. I personally think that, as I've said earlier, at the current margin levels no new capacity creation is viable. Our belief is that as consolidation happens, it will boost pricing power in the industry and the margins will become respectable to give a good return on capital employed. This has happened in every sector, and we've also seen that the top players are taking this disproportionate share of the growth. I am convinced that the entry barriers are rising and the margin profile of this industry and the return profile of this industry is going to get increasingly attractive in the future. Having said this, there will be blips along the way. This is not a linear curve. There will be times when you will make low utilization, low return on capital. There will be times when you have low utilization but very high return on capital because prices are good. I think we should not get swayed by quarter-on-quarter volatility in this sector. We have seen in the last 80 years that the best strategy to create value in this industry is to take a long-term view and invest. The way you make money is to invest when people are not investing and also to ensure that your cost of capital is low and leverage is under control. We will continue to invest in this sector with a deep conviction that India will do well and consolidation will increase and pricing power and pricing discipline will return in the sector. That view is unwavering quarter-on-quarter and that view will not change. Even if we perform well in one quarter or if we perform badly in one quarter, our long-term strategy will remain the same. We want to focus on a micro market by micro market and decide margin versus market share trade-offs, and we will ensure that we will invest in markets to create significant presence and diversify across geographies. My strategy, my conviction, my answer will not change every quarter depending upon our performance. It is the same depending. We have deep faith in India, we have deep faith in the returns that the sector is going to offer, and we have deep faith in our execution capability. Coming back to one point on low short-term prices, currently the prices, as I said, had gone to unsustainable levels and prices are bouncing back. I personally feel that at least in the near term I am quite optimistic that these prices will fall. Having said that, this is a cyclical business and there are times when prices will be volatile, so it's hard for me to predict quarter on quarter what will happen. The way I see the situation now is I'm quite optimistic that the prices will hold. Thank you. Thank you. Thank you. We take the next question from the line of Sumangal Navatia from Kotak Securities. Please go ahead. Yeah, good morning everyone. My first question is on the JAL bid. Just want to understand what would be our plan for the non-core, sorry, non-cement assets which come as a combination and also from our interaction with CoC. I mean, what sort of timeline are we looking at for this resolution? Mangal, I've already said this, we are a pure play company and we want to look at the cement business in a very strategic manner. As far as the CoC is concerned, I understand that they are going to review it this week and then they are going to give us a better sense of the timeline. Based on our interactions, although they have not given any firm date, they want to find an early resolution to the whole process. Understood? Understood. My second question is on the timing of this announcement of expansion. Now, given that we are operating at almost 60% utilization at the company level, looks like we have headroom for a few years to grow. Won't we be better off going for expansions once we start approaching 70%, 75% utilization given the capital also has an opportunity cost? As I said, our utilization is not the same across all regions and we have to take a more granular approach. Point number one. Point number two, it takes time to build new capacity. I think we were behind the curve in acquiring land, obtaining permits, and obtaining mining leases. We think that we want to be in an absolute state of readiness and, if we are within our capital allocation framework, we want to invest in this sector with a clear conviction that India will do well and consolidation will increase in this sector. We are within our capital allocation framework and we will continue to sweat our existing assets too. It doesn't mean that we are not going to sweat our existing assets and keep expanding just for the sake of nameplate capacity. That's not our intent. Our intent is to create profitable growth and get returns on the capital that we invest. Got it? Makes sense. All right, thank you so much. Thank you. The next question comes from the line of Satyadeep Jain from Ambit Capital. Please go ahead. Hi. Thank you for the opportunity. First question, the question everybody is asking and you can sense the confusion that this is creating. I just want to delve deeper. Historically Dalmia was focused in a way on market share. If you look at the history last then applied pricing discipline lost market share a few quarters ago. There's been change in management last two, three quarters. You've seen market share loss but you've seen pricing improvement. To this question, what have you specifically done to improve this price positioning? Are you vacating some markets? That's what the impression we're getting, non-profitable markets. What specifically are you trying to do to improve brand positioning? Because the brand has been out there for a long time, suddenly in two, three quarters, what steps have you taken to improve brand positioning? To this question, because you're adding. A lot of capacity, then the amount you're investing in this brand creation, brand positioning, and then you have to change volumes again with this capacity. Do you dilute this again? How does this entire strategy tie to what you're trying to do? Is the confusion I guess everybody has right now. I think you should speak for yourself. Don't talk for everybody. That's my request, and I think if you have confusion, I will clarify it. Once again, our strategy is very, very clear. I think we will continue to invest with a great mandate, with a clear vision that India will do well and consolidation will increase. Point number one. Point number two, I think there are markets where we think we are, there were unprofitable segments that we were operating in, and we don't want to operate in those segments as of now. I think we want to be very clear that we have a different strategy for every micro market, and we will ensure that that strategy plays out and we balance growth and we balance profitability. Point number three, I think there are times when just creating discipline in which segments to chase, what leeway to give on discounting, strengthens the brand. I think we are just following that. You can do that fairly quickly if you are disciplined about it and you have a clear thinking around it. I think this is what we have done, and I think we are seeing that early results are visible. If it means making some trade offs in terms of unprofitable segments, we will make those trade offs because it is in the long-term interest of the company. I think just giving more discipline in distribution improves brand positioning because otherwise distributors cut each other out and they die. Dilute your brand. Customer brand can be very strong, but you know distributors can just dilute the brand because you know we don't enforce discipline on them. I think that is exactly what we are doing in the markets, and you know, we are engaging deeper, we are giving clear messages, and we are, we are very focused on what we are trying to do. Can we expect maybe growth, volume growth in line with industry or higher than industry, and at the same time this focus on profitability? That can be something that we can expect, a combination of both profitable growth and volume growth in line or above industry? I think long term, yes. Short term, I think we'll have to make a balance. Okay, second question would be on the CapEx decision. Just wanted to check in between various pockets in north. You had option between Jaisalmer and Navalgate but seems like you're pressuring Jaisalmer. Obviously, the premium that you paid for Navalgate, the premium in general was very high. Does it mean that at this stage Navalgate looks less feasible and that given there is a timeline for that mine to commission after the lease execution, would there be a risk of some of these leases going away? You're looking. At 18, 20 million ton of the expansion in the next two, three years, would there be any risk? Just maybe don't have any more prudent to layer it rather than doing all at the same time, just from an execution balance sheet standpoint. Trying to understand. I think I can say it again. We have said that 64 million tons is something which is firm. We are going to look at how JP plays out, and we are going to be in a state of readiness for all projects. We are going to take a call by March 2026 on whether we should press the button on Jaisalmer or not. I think we have led and we have created scenarios which manage risk fairly well in my view. We are going to review the situation every quarter. We are going to see how JP plays out, we are going to see how our execution plays out. We want to remain in a state of readiness. Thank you. Ladies and gentlemen, in the interest of time and fairness to others, we request you to restrict to one question per participant. We take the next question from the line of Kunal Shah from Dam Capital Advisors. Please go ahead. Yeah. Hi sir, just a couple of questions. Number one, on the Jaisalmer project, could you just provide some insights on how much capital is already committed here, and how crucial would be the government subsidies before committing further capital to that particular area, given the long lead distance to target markets and potential higher CapEx cost at the outset. I think we cannot comment on that right now. I think we will comment on that once we are ready to announce the project. Understood. Secondly, on the Kadapa capex, the grinding of 6 million ton at Kadapa and the bulk terminal of 3 million at Chennai, could you explain this strategy? I just want to holistically understand versus putting up a split grinding unit in down south Tamil Nadu, especially given the integrated expansion at Tamil Nadu is some time away until we see development at the auction there. I think we examined this very carefully, whether we should put a grinding unit in Chennai or we should put a blending unit in Chennai. I think from an economic standpoint, we think it is better to put all grinding in Kadapa and just do a bulk terminal in Chennai because we want to balance CapEx as well as servicing the market. We think this was a more economically viable proposition. Understood. I have a question, but will fall in the queue. Thank you. The next question comes from the line of Jaishanteep Singh Chaddha from Nomura. Please go ahead. Hi. Thank you for the opportunity. First of all, congratulations on very good set of numbers. Stephanie, I have just two questions. Firstly, I think the cost saving of INR 150 to INR 200 per ton, we actually announced it last year. I just wanted to understand has some cost saving come till now or is it, you know, if you can directionally tell us, you know, I understand it will be very difficult to quantify but some cost saving that might be coming in the coming quarters and in which key heads it will be. My second question is I understand going to Kadapa and Belgaum because you have higher life of mine and lease life there makes sense. I just want to understand and thinking out loud that one of the reasons for waiting for Jaiprakash Associates Limited could that also be that Dalmia Bharat Limited has already made inroads in that central relatively newer market because of tolling and also you get. Auction free, so there's no premium. On the central limestone, whereas for Jaisalmer you have around 12-15% of auction premium. Can that also be one of the conditions in your scenarios that you played out? Just two questions from my side. Thank you. Thank you. I think we had said that from quarter one of financial year 2025, it's a three-year journey to reduce cost by INR 150 to INR 200 per tonne. I think we are in the process of doing work so that we can demonstrate this cost saving. Most of it is not visible till this quarter, but we are doing work on renewable energy and some of it is going to be visible in the H2 of this year. Also, some of the logistics optimization is happening and I think that will start to play out by the fourth quarter of this year till the next year. That is question number one. Point number two, on JAL, I think it just accelerates our entry into the market. Auction premium is one issue, but overall I think we want to build a pan-India footprint and it is in line with that strategy. Understood. Thank you so much. Thank you. The next question comes from the line of Shravan Shah from Dalit Capital. Please go ahead. Hi sir, most of the things have. Just to understand in terms of the CapEx, if you can help us break up first on the Assam, how much out of the originally announced INR 3,641 crore, how much is already spent till Q1 FY26. At the same time, on the Belgaum, how much we have already spent. I wanted to understand in terms of the INR 4,000 crore CapEx, and maybe for FY27, even if we don't assume Dalmia Bharat or Jaiprakash Associates Limited, how much more CapEx one can pencil in for FY27. For Umrangshu we're almost done. The trial run of the Umrangshu clinker will start by September this year. I think we should have somewhere a number between 600 to 800 which will probably get booked this fiscal as far as Umrangshu is concerned. On Belgaum again, because most of the CapEx will be incurred by about Q4 2027, the number should be closer to 1,400 to 1,600 on Belgaum this year. Again, of the total CapEx which Dharmender Tuteja has set of INR 4,000 crore during the fiscal, approximately 75% to 80% will go into the announced growth projects and also procuring land for our future pipeline. For FY27, would be for existing whatever we have announced, what would be the CapEx including the RE and the maintenance? The balance 20% which I just mentioned will be towards RE maintenance, CapEx and all other ROI improvements that we'll be doing across the plan for next year. Whatever the CapEx number, it should be something similar to INR 4,000 million. Again, in FY 2027, approximately 70% to 75% will again be growth CapEx and the balance will be for maintenance, ROI, renewable power, etc. Okay, got it. It is requested to please join back the queue. Thank you. We take the next question from the line of Patanjali Srinivasan from Sundaram Mutual Fund. Please go ahead. Yeah, I have a couple of questions. One is our marketing spend is reduced year on year from 2024 to 2025. Is there any change in strategy that we are doing here? No, nothing really. There was also a brand launch, so there was a one-time brand launch. Otherwise, it's continuing the same thing, and going forward, of course, as we deepen our brand leadership, this also will slightly go up. Prior to that, I think we were spending almost INR 75-80 per ton on a year-on-year basis for marketing, but it's declined to almost INR 50. I just wanted to understand if we are spending more in any other way for advertising or in terms of our dealer rates. Now the focus has slightly shifted on the BTL expenditure closer to the markets. When the brand was launched, there was more of ATL, this IPL sponsorship. Those things are shifted towards BTL. Okay. Thank you. Thank you. The next question comes from the line of Pratik Kumar from Jefferies. Please go ahead. Hello, good morning. A couple of questions. Firstly, just for modeling your mind on. Your net debt positions from current INR 800 crore including the three projects which I've talked about, three, four projects excluding Jaisalmer. Where do you see your net debt? Position from INR 800 crore currently? The second question is on. On the expected, if we like sort of when the JAL bit is the expected cash out, did you expect from, I mean that bit. With the current announced projects, debt should go up to about INR 5,000 crore or so, which should not be a concern within our capital allocation policy for JAL. Of course, we're not able to comment right now until the matter gets closed with the CoC, because there could be timing issues also, how the money gets paid. If at all, when it comes to, we'll do the proper announcement and give you far more pickup. Thank you. The next question comes from the line of Rajesh Ravi from HDFC Securities. Please go ahead. Yeah, hi, sir, good morning. My question pertains to this northeast expansion and also first of the northeast expansion. What sort of incentives these plants, the grinding unit and the upcoming clinker unit. You know, bring with them? On the CapEx, we had 20% of the incentive on your total fixed cost investment, and that is for 20 years. Okay. On an annual basis, how much would that work out? Sorry, can you repeat that? On annual basis, what sort of incentive one can, you know, Dalmia could potentially accrue from these plants? I think you should see the macro level. What we see was INR 100 per ton for the company as a whole, rather than getting into the budget specific per ton basis. Okay. Would you repeat the incentive numbers accrued and collected in this quarter? It was INR 82 crore accrued and INR 42 crore received. Okay, 82 and 52. Okay. Yeah, I think that's all from my end. Thank you. Thank you. Ladies and gentlemen, we take the last question from the line of Nashee Chopra from Citigroup. Please go ahead. Thank you. Sorry if I missed, if I got disconnected, but have you given any guidance for volume for this year? You don't get volume guidance. All right, and second is at what point would you start using auction limestone? Rashi, now that we'll be expanding into the newer regions, the auction limestone will probably start coming into play. Jaisalmer will be an auction mine as and when we develop it and on our existing plants as we augment in future. Currently we're using most of our limestone. In the next two, three years, there's going to be very little auction limestone. I think it's not going to. Move our cost curve at all. Three, four years later, there'll be a marginal shift, but it's not material. What's the premium for the Dalmia lands for? I think it meant 20%, 50%. I don't remember. I don't remember. I think we'll give it to you. I'll give it to you later after the call. Okay, no problem. Thank you. Thank you, ladies and gentlemen. With that, we conclude the question and answer session. I now hand the conference over to Mr. Puneet Dalmia for closing comments. Once again, I just want to thank you all for your interest. I think I'm very happy that this was the best quarterly EBITDA ever for the company. We are very confident about our plans, and I think staying within our capital allocation framework. As I said. The best of. India is yet to come. The best of Dalmia is also yet to come. Thank you for your interest. Bye. Bye. Thank you on behalf of Dalmia Bharat Limited. That concludes this conference. Thank you for joining us. You may now disconnect your lines.