Ladies and gentlemen, good day and welcome to Orient Cement Limited Q3 FY 2024 result earning conference call hosted by ICICI Securities. As a reminder, all participant lines will be in listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Harsh Mittal from ICICI Securities. Thank you, and over to you, sir.
Thank you, Ria. Good afternoon, everyone. On behalf of ICICI Securities, I welcome you all to the Q3 FY 2024 earnings call of Orient Cement Limited. From the management, we have with us MD and CEO, Shri Desh Deepak Khetrapal. Without any further ado, I hand over the call to Mr. Khetrapal for his opening comments. Over to you, sir.
Thank you, Harsh. A very warm welcome to all the participants in this call. As usual, I am grateful to all of you that you show interest in our company and spare time for coming on this call. I know we are a few minutes behind, but we were waiting for more people to join the call. Here we are. I know the participants on this call are all interested people and who do their homework pretty well. Still, I will give you a little bit of summary as you would have seen. We are happy with the, I would say, profitability results that we have been able to put together, INR 117 crore EBITDA. I am touching about INR 840 per ton, and this is where we said we would want to be at the end of the year as well.
I think some of the concern that people may have had, and I am saying may have had because internally we at Orient Cement also are a little bit disappointed with the degrowth in volumes that we have recorded in Q3. I will just give you a perspective on what we think has happened in Q3. Our disappointment aside, the fact of the matter is that in Q3, there were several things that have happened in the industry. More importantly, in our home states, home state means the two very important states, which is Telangana and Madhya Pradesh. We had elections that obviously created too much of a slowdown and the labor and people just disappeared. You know what happens when the state elections happen. That was one of the main reasons.
Besides that, obviously the festivals in this quarter and also the Maratha agitation in some parts of Maharashtra. For the first time, we saw construction activity and multiple bans being placed on the cement and concrete activity in both Mumbai and Pune. Multiple reasons are there. One of the most important I should point out is also that despite our degrowth, when I look at the YTD growth numbers that have come out from DPIIT, they came just a few days ago. When we see YTD, we have a growth of about 9%, which seems to be completely in line with the growth of the rest of the industry pan India, because that is the only reliable data available.
While we do believe we should have done better, it does not seem that we have actually lost in terms of the growth that the industry is recording and we have already grown. In fact, if you look at the data, the data also shows that up to November, the growth of the industry, I am talking about YTD, was about 10%, and up to November, we also had a growth, which when in axis we were at 11%. In the month of December, if you see the numbers, the growth rate has come down very significantly, and that is where I think we also have a little bit. At the end of November, we are looking at 11% growth YoY. I just thought I will bring that up to you.
The other matter of concern basically has been in our state of Telangana, which as you people know, it is not the largest state for our sales, but it is still a very important state for us because that is a smaller market, but our home market. In that, the B2C sales have been extremely slow in this quarter. The trade sales as the jargon goes in the industry. Obviously, first it was the election, then it was the change of government. A lot of uncertainty there where lots of changes are being made in the administration, the officials. Things are not sort of getting to go as they would with a stable government, with low demand and too many players actually getting aggressive in Telangana. We are surprised as to how many players in Telangana are beginning to offer prices which quite frankly surprise us.
I don't want to name them, but if you people do your research, you'll find that some of the topmost brands who've enjoyed premium for a long time in the markets because of the brand equity. In Telangana market, we have seen them selling, not just quoting, selling at about INR 20 less per bag than our price of regular cement. That is something which obviously puts pressure on us also, but given our strategy of staying with the right pricing and also pushing more and more of premium cement in the market, you would have seen that our realization per ton, very close to INR 5,400, is in some way in contrast to what we are seeing as realization being reported by many other players, which I think is carrying on and sustaining the strategy that we've had.
I just thought I'll point out to you that despite lower prices from very big brands, we are not succumbing to the pressure. As a result of that, the pain has come our way. Just to give you one data point, the B2C volumes in Telangana in Q3 for us are actually lower by 29%. That's a huge hit. Are we happy degrowing by 29% in our home state? Certainly not. But the options are you compromise on price and start selling cheap, which as a strategy, as of now at least, we've not thought that it's prudent for us to do that. So I thought I'll just table that. Even in our largest market, by volume, we sell 60% or thereabouts in Maharashtra market. As we know, that's our most important market.
There, again, I think the major growth in demand continues to come from what we call the B2B, the non-trade segment. They largely buy OPC cement. In that market, again, because the growth is coming to the forefront, we have actually been growing well. The only problem that is there is that in that state also, in B2C, there has been degrowth. So B2C sales degrowing is a worrying sign for us because that means not just the segment change, it also means the product mix change, and that keeps getting adverse. When you sell so much more OPC, you know the pressures it creates on companies. So that was a little bit qualitative feedback or inputs on the volumes that we have.
Overall volumes, as you people would have seen, we ended up at 13.92 lakh tons, a degrowth of 3% over last year and 2% over the previous quarter. YTD, as I mentioned, the sales have been 44 lakh tons and up about 9% over last year YTD. Again, as I mentioned, in line with the industry. The pressure of, let's say, demand growth that we've seen coming from the B2B sales has resulted in our total B2B sales in this quarter actually going up to as high as 56%, which is something that we would like to correct as Telangana consumer demand picks up and as Maharashtra consumer demand picks up. We hope, even if it doesn't happen in this current quarter, but sooner than later, I think this trend needs to reverse because this is not a trend that we would like to pursue.
But as of now, Q3, we had 56% of our volumes coming from B2B. As a product mix, our OPC, that is unblended cement versus blended cement, has reached a high of 50% in the quarter. So I thought because all of you remain a little bit curious about how that breakup is. So non-trade, 56%, OPC, 50%. Balance obviously is our trade sales. In all this, I think the good news is the consistently growing share of our premium brands. And we now comfortably as of crossing 20%, 21%, 22% that we are selling our premium cements including initially we used to cover only Strong Crete. Now, OrientGreen is beginning to chip in and Dolphin is still to, like I said, volumes worth mentioning.
But any consumer who's actually used our Dolphin brand, they are actually the people who start with only the basement or only the smoothing slowly gradually start coming back for other uses also. So that product again is being received exceedingly well by the user customers. As happened with Strong Crete and as happened with OrientGreen, basically we rely on word of mouths from our existing users to build our market share. Exactly the same strategy that we've had from the day we introduced the first premium brand, which was Strong Crete. So we'll go slow but go steady and keep charging the price that we believe our product actually deserves. As a result of that, despite, as I mentioned, the degrowth in volumes, if we say our revenues, they've actually improved.
We are 3% higher year-on-year and 4% higher QoQ, which is, as I said, the higher blended realizations coming in because of premium cements helping us a lot. As I mentioned earlier, realization at INR 5,400 per ton this quarter is 5% up year-on-year and 7% quarter-on-quarter, which I think is a very strong evidence that the strategy that we're following is of premiumization and actually being in the league of the A category brands. It's working and we're happy to be there. It's taken us many years of effort and commitment and some sacrifices. But we are glad it's working out for us. I don't need to call it out, but still the YTD net sales at INR 2,292 crores are 11% up year-on-year against, as I mentioned, volume of 9%. Balance is coming from price premium.
To a certain extent, I must acknowledge, while our premium products have helped, they're also in the Q3 for about five odd weeks, getting close to six weeks, there was a little bit of pickup in prices initially in this quarter. Which in the second half of the quarter just disappeared, and we ended the quarter with prices going back to where they were at the end of September. But for a part of the quarter, there were somewhat higher prices. They definitely helped us look at better realization in the quarter. EBITDA, as I mentioned, is 28% higher than previous year and on YTD basis that about INR 309 crores is 33% up, which is good news given the scenario that we have in the industry.
EBITDA per ton at about INR 840 is up about INR 200 over last year and about INR 220 over the preceding quarter, which is again, helping our bottom line. Besides the slightly improved prices in part of the quarter, and also as I mentioned, the increasing contribution from our premium brands. The other elements which have worked in our favor are the way we have benefited from the waste recovery plant that we had set up. It is still not 100% operational, but with the 80%, which we had called phase one, with that itself which got commissioned during the quarter, it did not work for the full quarter. We are actually beginning to see the benefit of over INR 4 crores per month, and I think when we have the balance 20% power also coming in, which is from preheater section.
The work is in advanced stages, and we should be commissioning that soon. I believe that from at least next quarter, the benefit that we see from waste recovery itself should be around INR 5 crores per month and a total volume that we typically end up doing about 5 lakhs or between 5 lakh and 5.5 lakh tons, it would be close to INR 100 a ton. In this quarter itself, the waste recovery impact for the whole quarter has given us a benefit of INR 56 a ton when the plant was neither in use for the full quarter, nor, like I said, worked at 100% capacity.
Here again, if I look for the good news is that with 80% completion, what the assumed generation was, we actually are having generation from our waste recovery, which is higher than what the guaranteed generation from the vendors was. So what has been completed is doing well. We are quite sure that even the preheater section, when it is completed and commissioned soon, we will keep getting this significant benefit that we have told the shareholders. But the benefit is proving to be a little higher than what we had perhaps conveyed to all the analysts and shareholders. Power and fuel costs, they are down by INR 157 per ton year-on-year and about INR 87 from Q2 because prices have been softening in the meantime, the costs here.
The important thing to remember here is at INR 14 and INR 20 per ton that we are quoting here, it certainly has the impact of much higher proportion of OPC than we are used to. Typically, we used to have 40% OPC. Now we have come to 50%. So every percentage point higher in OPC consumption does mean that we are using lesser additives. Which means there is more clinker going per ton of cement, which means more fuel going into that. That obviously impacts our total cost. Even grinding of clinker is more because when you are adding between 30%, 35% of fly ash, obviously the grinding power on that part is so much lower. But when you are using only about 4%, which is as per the standards, then obviously your grinding costs along with the clinker making cost goes up.
So that's pushing the per ton fuel cost slightly on the higher side, despite the fact that our fuel has actually benefited us. Our waste recovery plant is benefiting us, but still we would like to see it more competitive. And thankfully, when we see the results of competition, people who have the luxury of about 80% of PPC cement, obviously the power and fuel costs tend to be lower. Even as, let's say, if we actually did apple to apple comparison and looked at our what is my cost of producing 1 ton of OPC or 1 ton of PPC, I think we are still very competitive. But the product mix right now doesn't make us look the lowest power and fuel cost, which we have had in many quarters. So this, like I mentioned, currently is our compulsion.
We are taking it, but as we move forward, we're hoping that this trend will change and will come back to the PPC also having its fair share in our product mix as we move forward. The other initiative which we've been talking about, and which has helped our power and fuel costs is our thrust on the alternative fuels. And these AFRs, as all of you are aware, they are nothing but the waste of other industries. So with the effort that's been going on and I think quarter after quarter, we've been increasing the percentage of AFR in our fuel mix. As a result, I'm happy to announce that in Q3, we actually on volumetric basis, we consumed as much as 25% of our total fuel coming from AFR.
On TSR basis, it's a little bit more modest because AFR obviously doesn't have as many calories as a traditional fuel has. So if you go by TSR basis, it's at 17%. We've never been in this range before. And we will like to continue this trend and keep increasing the usage of AFR as we go forward. Not just AFR, besides the waste recovery plant that I've already mentioned, currently about 50% of our power requirement at our Jalgaon grinding unit is actually coming from solar, which is a renewable power. And the further investments that we have, which should be available to us in the next maybe a quarter or quarter and a half both at Jalgaon and also at our Chittapur, Karnataka plant. That will further give us more renewable power, giving us more savings.
But currently, we have reached in Q3, 25% of our total power consumption coming from renewables, including waste heat recovery and solar at Jalgaon, which should go up significantly once we commission the solar capacity, which is under construction at the two locations, as I mentioned. In terms of state mix, all of you do know that west is about 64% for us now. South is at 27%. It used to be closer to 30%, 29%. It's dropped a little, and the balance is being made up by the Central India, Madhya Pradesh, and some markets around that. Always, I think it's interesting to share when we talk about on a blended basis, so much high OPC in our system.
Despite that, in Q3, our power consumption per unit is, I think, at a low of 63 units, which most of the industry players will confirm is a very good place to have, especially when you are selling 50% OPC. Heat consumption, similarly, the per ton of clinker is 687. Again, it continues to be one of the best. I am giving you blended for the whole company. Obviously, the Chittapur Karnataka plant works at significantly better than that. So it is a blended number I am sharing with you. The fuel cost, power cost is one element in the whole thing, which is coming down because of waste heat recovery. Although the CPP coal continues to be expensive and CPP is our captive power coal. Despite that, we have been able to sort of lower our power costs.
On fuel cost, again, it is down from last year on a complete power per ton cement basis, which I have already given you total power and fuel. In terms of coal or our fuel prices, the domestic coal that we source from Singareni Collieries, as you know, it is a public sector body. I think there, the coal prices, thankfully, in this quarter have been flattish year-on-year. There is no further increase. Also sequentially, they have been a little stable now for a change. I think that is a pressure coming with the pet coke prices have come down significantly. Therefore, I think coal in India has to somehow remain competitive. The pet coke cost which we largely use at Chittapur, actually the cost is down by about 10% over last year and about 6% sequentially over the previous quarter.
I know these questions have been coming, so I am including that in my briefing right at the start. Blended cost of fuel, I am talking INR per million kcal. Blended includes my coal, pet coke, AFRs, whatever we are burning in our kilns. At our Telangana Devapur plant, it has been flat over last year. I am sorry, it is flat at about INR 1,800 sequentially, but it is down including the AFR when I am saying that. Including AFR, our blended cost is down about 12% over last year for our Devapur plant. At our Chittapur plant, the main fuel is pet coke. There also, sequentially, it is down about 7% and about 12% lower year-on-year. So there is obviously the benefit of AFR, and a somewhat benign pricing on pet coke is being translated into better margins for us.
In terms of total fuel mix, the indigenous coal is about 42%, pet coke at 41%, and balance, as I did mention to you, about 17%. All these are on thermal substitution rate, TSR basis, 17% AFR. One pressure point for us definitely has been our freight costs which I think on a per ton basis when they look higher by about 4.5% and also 8% QoQ. Two factors. One, as I already mentioned, because of the loss of momentum in Telangana, which is our closest market, basically. When we are still sort of in a way making up for volumes elsewhere, which are lost in Telangana over the previous periods. It means we are having to reach out to markets which are slightly farther away, more volumes in markets which are somewhat farther than what the Telangana markets are. So that is one factor.
Secondly, when I am saying B2B projects, whether in Mumbai or in Pune area, most of that is going in bulkers. As we know, the per ton, per kilometer cost of transportation of bulker is higher. Bulk cement in Q3 for us has been as high as 40%. That is the second pressure point in terms of freight cost being higher. The third, obviously, is the typical lean season discount that is available from railways that has not been available in Q3. That is the third factor which has impacted our freight costs. Given the, I would say, withdrawal of the lean season discount and also the bulker demand, the rail dispatches in this particular quarter have actually fallen from about 15% to 14%. Those are, I would say, some highlights of what the numbers for the quarter.
Like I said, we keep drawing satisfaction from the fact that our strategies of premiumization is working well. Consumers love our product, and they are willing to pay the price that we are charging for it. Also in terms of, I would say, the ability to sell OPC so much higher, have higher costs, but still being able to improve our bottom line is something which again, is a part of our operating model, which is working well for us. That is on the operations. A quick word I will also have on where our expansion plans are. I know I am very conscious of the fact and the number of times we talked about when the capacities will be put up, how they will come down, and every time we have not been able to keep up with the date that we had announced.
Largely, I have been reporting that it has been due to delays in our being able to get the necessary regulatory approvals. In this quarter, there has been significant progress on almost all the four projects, I would say, that we have been telling you about. As we speak, one of the things that we have is our Chittapur plant expansion, which I have been mentioning, that will be our first project to take up for expansion. The public hearing, which is a precursor to the environment clearance, has been scheduled. The public notice has been issued for 17th February. On 17th February, we will have both the public hearings for the production capacity and also for mining. That happens on 17th February. Post that, obviously, the environment clearance process really picks up speed because the process before the public hearing is a lot more cumbersome.
That we have been through. On the Telangana Devapur plant expansion Line 4, I had been making again a very clear communication that we would want our grinding unit to be parallelly available before we add more capacity at Devapur. The good news there is, and that you might have seen part of our release to the stock exchanges yesterday. Earlier, we were not disclosing the name of the location. Today it is official. It is the Madhya Pradesh Power Generating Company. They have a power plant in Satpura range, and the name of the village, if you want to call it, is Sarni. At that place, they have approved our proposal to put up a grinding unit on their premises. They will provide us land, they are giving us use of railway siding, and they will also be providing us fly ash at a fairly competitive cost.
All those things they have approved. Only one or two, I would say, that are minor additions or modifications they have made in our conditions in terms of landed cost of fly ash. They stipulated an amount which is higher than what we had stated, and something to do with space for people to live, their colony and things like that. While they have made those changes, we are in touch with them. We have not accepted what they stipulated as a conditional approval. We are in touch with them to basically negotiate to the extent there is room available for us, which we should be able to tie up very soon.
I am for the first time letting you know that the new grinding unit, which will support Line 4 at Devapur is now very close to being signed up, because if I accept their condition, it is ready now. But yesterday at the board level, we discussed the whole thing, and we believe there is some room for negotiation. We are going to try our best, and post that negotiation, we will close it and get on with the activities there. That gives me the encouragement to now come back to track for Line 4 at Devapur also. Again, for which the public hearing for mines has been scheduled for, actually, that is before Chittapur, on 15th February.
But the Sarni site means that very quickly we will go through certain formalities, close the deal with the Madhya Pradesh Power Generating Company, and thereafter start the process for environment clearance for Sarni also. That sort of ties up multiple loose ends which have been hanging for quite a while. And as luck would have it, even the last fourth I said, expansion of capacity, Rajasthan mines, for which the government orders had been passed but the required deed was not being executed for some technical reasons. Finally, that deed also has. We have a now valid signed lease deed for our Rajasthan mine also, which will now allow us to start making the acquisitions of the land if we do.
All four expansion plans have gained momentum in one quarter, which is good for us because so many times we have said we will do it, and we have not been able to deliver on the dates. Exact schedule now, based on how the public hearing goes in the next two weeks, as I mentioned, and how the files move from there. I am not announcing the exact start of the activity once again and once again going wrong. In a few weeks, maybe the moment we have clarity, we will come back to all of you through whatever forum, to tell you when exactly we will complete the expansion plans. But all four of them are on. It is just sequencing of them and when to start one, when to cover off one and start the second one.
Those kind of things will perhaps take a few weeks internally, and our long-term plan for that perspective is under process. Let me form it up a little bit and only then communicate that to you. That's good news on the expansion plans. I personally don't think there's much left for me to add more to the initial briefing. I'll stop here and open the floor for the questions. Thank you very much for your patience. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephones. If you wish to remove yourself from question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Hello.
Hello.
Thank you for the opportunity. I want to get a sense about how big is Telangana market for you, B2C market overall?
Telangana market overall, typically we've been giving numbers for South India as a whole. Statewide, normally we refrain from giving, but South India as a whole for us does 30%, bulk of which come from Telangana.
Okay. Understood. As you highlighted, the September to December prices are similar. How are the pricing trend in January?
January, I am sure you are talking to many other companies also. It is a difficult time for the industry because typically in the last quarter, the momentum we should have seen in January, which sets up the entire quarter very well. That momentum, frankly, has been missing not just in January, from December itself. That is why I told you the YTD figures of DPI also tell you that till November end, the growth was around 10%, and by the time the quarter ended, it came down to 9%. So obviously December was slow. January again has been a little slow, and prices as we speak have actually stayed at the exit levels of December, I would say.
Okay, understood. Is it possible to give fuel cost in the terms of INR per kcal?
I think I did give it to you. Okay, I am just giving you the movement. At Devapur, on blended basis, it is Let me just see what my
Company level will also do.
Sorry?
Company level will also do blended.
No, I am giving you because blended, I would rather give you plata. At Devapur we have about INR 1,800 and at Chittapur it is a little under INR 2,000. So blended perhaps will come to more around a little under INR 1,900. I do not have the straight number with me, but I am just doing a mental calculation, weighted average. Certainly ballpark about INR 1,900. A little less maybe.
Okay. Yeah, got. Last call you have highlighted that you will reach a premium share to 25% by FY 2024 end. So you think is it achievable or it might be with a lag of a quarter or two?
Look, 25% by FY 2025 was always going to be difficult. But yes, we are working on that. We are already around 22% or thereabouts. For all you know, one of the things that needs to happen is that, you see, the premium cement is all at the B2C market. The momentum in B2C market, and if Telangana consumer market picks up and goes, I think we will be able to hit 25%, but without Telangana B2C market supporting us, it will remain a bit of a challenge.
Okay. Got it. Lead distance for the quarter?
Maybe it has gone up by about 10 km, 11 km, more than what we had on an average. Which will be perhaps a little over 300 km that we keep saying, so that 305 km may have become 315 km thereabouts.
Okay. Thank you. That is it from my side.
Thank you.
Thank you. Next question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead.
Yeah, good afternoon, sir. First question is, if you could share what is the net cash level, I believe it could be net cash at this point, as on 31st March?.
31st March? March we've not even
31st December, sorry.
Okay. No, honestly, we are not keeping much in cash form. I think I need to give you the debt numbers which have actually come down. Just to sort of innovate. Sorry, that somewhere got left out in my briefing. The total loan that we've had against the Chittapur construction when we started that entire loan by now as we speak is almost liquidated completely. We had the repayment period to 2030. As we speak today, there were about INR 37 crores left at the end of 31st December. That's been repaid in January itself. Okay? By now it's already repaid. I think total borrowing as of now would be perhaps more around INR 150 crores, and that's about it. Which includes my working capital.
Rather than keeping cash in hand, we've actually reduced our borrowing so that when we are going to banks with the new expansion plans, we have a debt-free balance sheet.
Understood. Got it. Sir, any sort of volume guidance you would like to give for overall FY 2024, which now is just left for the fourth quarter, and 2025 as well?
No. Look, as far as Q4 and rather FY 2024 is concerned, as you know, we have done just about 4.4 million till end of December. We do comfortably do about 1.8 million tons in Q4. Although January has not supported that, but we are still not giving up our expectations, our hope and our efforts. We try to do more than 1.8 million, in which case we will end up at about 6.2 million or thereabouts for FY 2024. Right? Given the current, I think, lack of momentum, it is difficult, but my own guess is that as the elections get over, in Q1, we may see a little bit of election. When the election is happening at that time, demand does slow down. From all indication that we are seeing that there may not be any kind of destabilize at the political level, national level.
We believe, if not earlier, post-election, the momentum should pick up, and typically what we talk about, I think everybody in the industry would assume that if strong government is at the center without any dislocation, a growth of 10%, 11% is a given. We would rather promising anything more than the rest of the industry. Actually, if you ask me, Sumangal, honestly, we should get something more because Telangana should pick up at some point in time. In which case, we might do somewhat better than the national average, but largely we would like to not be behind the national average.
Understood. Sir, one just last set of questions on the expansion. So we should start the land acquisition at Rajasthan in the couple of months once this.
Yes. We will start because as I told you, till you get the mining lease, you are never sure. With the government you never take anything for granted. So that activity of land acquisition would start soon. Obviously, we will go in phases, trying to acquire first the land which is needed for putting up the plant because that is an 18-21 months kind of activity to put up the plant itself. So we need to have that. Last when I was briefing, I was saying that from the time we start acquiring land till we get into some kind of a position to start the activity, the investment there would be ballpark about INR 100 crores for acquisition of land there. Then we will keep coming back. But yes, you are right. For Rajasthan, we will start acquiring land. That is a time-consuming process, and we are conscious of that.
Okay. Just one last question. Are we looking to parallelly expand Chittapur and Devapur, or is it one will kind of happen first and then the second?
Honestly, I personally think that picking up two clinker line at the same time may test our bandwidth. That's a very honest acknowledgment of our size of the company. What is more perhaps likely that we will think, and don't take this as the final guidance, but as I think about it, I think Chittapur should happen now. As I mentioned to you, there the demand is a lot more than what we can meet. My own guess is, I think we should be able to start Sarni somewhere in parallel, the grinding unit, for which we have clinker available at Devapur, right? As we sort of in a way, complete the putting up the expansion project in Chittapur and Sarni, in the meantime, Devapur sometime in the middle can start. So that's how it'll be a little bit of overlap but not parallel.
Understood. Got it. That's all from my side. Thank you so much, and all the best.
Thank you, Sumangal.
Thank you. A reminder to all participants, you may press star and one to ask questions. Next question is from the line of Krisha Kansara from Molecule Ventures. Please go ahead.
Sir, I just have two questions. You said that volumes were down in this quarter. Can you please guide us on the percentage loss that you saw on the volume side sequentially as well as on YoY period?
The overall volume for the company?
Sorry?
The overall volumes for the company, you are asking?
Correct. By how much percentage were they down in this quarter?
We were down 3% over last year and 2% sequentially.
Okay. Second is not a question. I just want to confirm the EBITDA per ton figure that you mentioned in your opening remarks. It was INR 840, correct?
Yeah, that's right.
Okay. Thank you, sir.
Thank you.
A reminder to all participants, you may press star and one to ask questions. Next question is from the line of Uttam Kumar Srimal from Axis Securities Limited. Please go ahead.
Yeah. Good afternoon, sir. Thanks for the opportunity. Sir, my question pertains to CapEx guidance for FY 2024 and FY 2025. Since mostly in FY 2025, we will be doing the expansion plan as mentioned by you. So what would be our CapEx guidance, and how much debt we are going to take for this ongoing coming expansion?
As I did mention while briefing, I have sought some time from all of you, maybe just a few weeks in which we are actually preparing our own plan now that the clarity is emerging about the public hearing authority. Just give us a short while. Let me not again throw some number at you. I want to have a little better query, the public hearing getting completed, the files moving. It's all a function of when can I start the activity. Total, as you know, at Chittapur, our expansion costs are going to be in the ballpark in the region of INR 1,500 crores. That's known to us. What I mentioned just now was also maybe Sarni can start coming somewhere in parallel if we can get environment clearances quickly. It's inside a power plant, so hopefully it should be easier.
That cost would be ballpark, again, about INR 500 crores. Our grinding unit costs us that much. So out of that INR 1,500 crores, Chittapur how much will get spent in FY 2024 and FY 2025, the split is not there, but my guess. FY 2024, nothing is going to happen there. I'm talking more about FY 2025 and 2026. In which we would like to complete Chittapur for sure and also bulk of the Sarni skilled grinding unit. Total cost of INR 2,000 crores between FY 2025 and 2026. The split is something I would know only when I start the actual processing. I am ready to start construction now. But ballpark is for these two projects, I think my current estimate is we'll spend about INR 2,000 crores between the two years of FY 2025, 2026.
Okay. And sir, this one, this grinding capacity will be around 3 million tons or 2 million tons?
No. Grinding at Chittapur is going to be 3 million tons, which is integrated clinker and grinding. Sarni will be a split grinding unit where we'll be putting up a 2 million ton grinding unit.
Okay. No, sir, I am asking for Rajasthan, where we were trying for like a question.
Rajasthan, our current calculation tells us based on the reserves and based on the life that we want on the plant of around 40+ years plus. We are currently working on the assumption of 3.2 million tons at Rajasthan.
Okay, sir. That's all from my side, and all the best to you.
Thank you.
Thank you. Next question is from the line of Parth Bhavsar from Investec. Please go ahead.
Hi, sir. Sir, thank you for the opportunity. Sir, I have two questions. Right now, we can see that your share of B2B sales is quite high. Can we say that this is because of the election time in Telangana? Do we see this improving going ahead?
See, the B2C demand in Telangana or any other place is basically how is the consumer demand across industries. I do handle another consumer company, and anybody I'm talking to any business today, consumer demand, especially in the rural, semi-urban sector, has been very soft. The moment the rest of the economy picks up in Telangana or elsewhere, we'll start seeing more B2C demand coming in. That's always been the norm, right? Currently, because the B2C demand is not there, it's largely B2G spending or B2B spending, which is carrying the demand forward. As a result, the percentages are looking a little distorted from normal. But as the consumer demand starts picking up, our B2C business also will pick up.
Okay. This is not an election phenomena, right? To confirm.
Election, partly. One quarter can be election, right? But overall, if you look at it across India, if you've been noticing consumables, whether durables or otherwise, everybody's telling you that the consumer demand is soft. I think that's a known fact to everyone.
Yeah.
That is on top of Telangana going through elections.
What would we target? We would bring this B2B sales back to like, the target would be 45%? In the long term.
B2B, let's say our ideal mix that we worked in the past is about 60% B2C and 40% or under B2B.
Okay.
Yeah. We are not able to go to 20%-25% like some other players whose markets are different. In the markets that we operate, where Maharashtra and Mumbai and Pune will remain large markets, I think our sweet spot will be B2B sales being less than 40%.
Okay. Sir, once this improves, we do expect we can see some good improvement on power and fuel cost and freight cost, right? On the back of this?
Yes. And obviously, the more blended cement that you can sell, the less the power and fuel cost. It is a very simple process of manufacturing.
Fair. Perfect, sir. Those were my questions. Thank you.
Thank you.
Thank you. A reminder to all participants, you may press star and one to ask questions. Next question is from the line of Raghav Maheshwari from AMSEC. Please go ahead.
Hello, sir. My question is particularly on the demand side. Last quarter, we have reported almost 3% demand degrowth. So how has the industry grown and degrown in particularly area of our operation, particularly Karnataka, Telangana, and the part of Maharashtra where we are operating?
Look, unfortunately, there are no official confirmed data available with anyone on a statewide basis. Because nobody collates data like that. It's very difficult for me to hazard a guess and tell you. Overall, we know that it's been low, and I have also mentioned, besides the demand being low, people have come under volume pressure, and they've been pushing more volume at lower prices. So maybe some of them at much lower prices have sold a little more than what the market would have needed, for sure. But there is no reliable data available with anyone on demand on month-to-month or quarter-to-quarter basis in every state, unfortunately.
Got it, sir. Second, for the proposed M.P. grinding unit, is our current limestone availability, facility available at the Telangana particularly, is it sufficient to serve this grinding unit, or we need particularly new line to serve that clinker line for this grinding unit?
For the time being, we will have some spare clinker at Devapur, but Line 4 at Telangana Devapur plant, I have always maintained, would actually need a spare grinding unit. That is why I did not start Line 4 earlier. So the Sarni grinding unit in Madhya Pradesh would need finally to add capacity at Devapur also in Telangana. But if it is a question of a few quarters, can Devapur spare some clinker? Yes, it can.
Okay, sir.
That is why I said that maybe I will start doing Sarni before I put up Line 4 in Telangana. It is just to manage our bandwidth and manage our resources. Because ultimately we have a certain size of balance sheet. We have a certain size of cash flows that come in. So taking up our two clinkerization units simultaneously, I think we are just going to overstretch ourselves, and I do not think we would like to do it.
Got it. And sir, what is the status of the EC and FC for the Telangana and EC for Chittapur? Is it in our hand or we had applied?
If you heard me earlier what I was saying, the public hearing is being scheduled at both places in February. Without public hearing, you do not get the EC, simple. EC cannot be in hand if I am still to do public hearing.
And sir, same case with the FC also?
No, forest clearance is happening in parallel, which is a separate process, which again is going at a good pace. My only anxiety right now is that earlier it got delayed by a couple of months because there were state government elections in Telangana, because the file has to move from Telangana. Now in Telangana state after the election, the file has started moving. My fear is by the time it reaches center may announce election, that they will go under model code of conduct. These are the hazards when you have to move from state government to central government. So by now, if Telangana elections were not there, a file should have been through in Telangana government. But unfortunately, not only the election happened, the government changed. So obviously, things are slower right now. They are resetting the administration. The officials are being shunted.
All ministers have not been appointed. Despite that, the file has moved well in the forest departments in Telangana. My own guess is that fairly soon it should be ready to move to center because it has to move from state government to central government. If it happens only, let's say all of us today, mentally, we need to be prepared that in about a month's time, the central government elections may be announced.
Right. That is my anxiety. The biggest anxiety with forest clearance is will it cost me another two, three months because our file has not reached center before the election announcement. So that's a bit of a worry right now. Yes. Like I said, there is no immediate crisis in terms of either availability of limestone or carrying on our manufacturing in Telangana. A two, three-month delay, I would have wanted not to have it, but not that it's going to impact our operations.
Got it, sir. Okay. Thank you.
Thank you. We take the last question from the line of Vaibhav Jain, an Individual Investor. Please go ahead.
Hello. Hi. Thanks for the opportunity. Am I audible?
Yes, you are.
Yeah. Hi. Just wanted to know for this Rajasthan 3.2 million tons, what would be our CapEx estimate?
Quite honestly, I personally don't see that construction activity happening for at least three years in Rajasthan. We just acquire land and get ready with it. But when it's ready for us, it's a greenfield site. 3 million-ton capacity, to my mind, will cost us about INR 2,500 crore, INR 2,600 crore based on today's information. In three years' time, things might change a little bit, but if you ask me today, at today's we know what the equal prices are and everything. Ballpark INR 2,500 crore, INR 2,600 crore, about that much.
Okay. Got it, sir. One more question, sir, regarding the realization per ton and EBITDA per ton. Can you give us the split between what is the realization and EBITDA per ton for OPC and PPC for-
No, we do not share that. No, I will not share that. It is plenty of data that we are sharing with you. Nobody shares separately for OPC and PPC.
Okay.
Because then I have to give every little detail that is not in public domain.
Okay. Thank you. That is it from my side.
Thank you.
Thank you. The last question is from the line of Surya Narayan from Sunidhi Securities. Please go ahead.
Yeah, thank you for giving me opportunity, sir. So, sir, what is the CapEx for FY 2025 with Chittapur and forest clearance, everything put together and for FY 2026?
As I mentioned just a while ago, five minutes ago, to another question. Currently, I am indicating to you our CapEx between now and FY 2026, which will be close to INR 2,000 crores. Exact split off between FY 2025 and 2026 will depend on when I get my environment clearance in hand, because only then I can start contemplating erection. So in the absence of that, it will move based on when the environmental clearance will become available. Total CapEx in these two for expansion in those FY 2025 and 2026, total I can indicate INR 2,000 crores.
Okay. How much debt could we plan to come in?
How? Debt?
Debt, yeah.
Oh, debt. Sorry, I misheard you. Look, largely what we would want to keep using is all the cash flows that we generate. We do not keep, historically, we never kept cash in hand. We will keep using our cash flows to fund these projects. To my mind, I think debt in the next two years, if we are doing a INR 2,000 crore CapEx, perhaps about INR 1,200 crore, thereabouts.
INR 1,200 crores.
Yeah.
Okay.
It will keep getting fine-tuned as we go, but ballpark, you can assume about INR 1,200 crores.
Okay. Thank you, sir.
Thank you.
Thank you. As there are no further questions, I would now like to hand the conference over to management for closing comments.
Thank you. Closing comments are nothing more than my usual, just my appreciation and thanks to all of you who come and attend our conference and ask some very good, interesting questions, and make us think harder about the way we run our business. Thank you for your patience. Thank you for all the support that you keep giving us. Grateful to you. Thank you very much.
Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you. Bye-bye. Bye, everyone.