Please note that this conference is being recorded. I now hand the conference over to Mr. Navin from ICICI Securities. Thank you, and over to you, sir.
Thank you, Steve. Good morning, everyone. On behalf of ICICI Securities, I welcome you all to the Q4 FY24 earnings call of Shree Cement Limited. From the management, we have with us MD Mr. Neeraj Akhoury, Senior Advisor Mr. Ashok Bhandari, and CFO Mr. Subhash Jajoo. So without any further ado, I hand over the call to the management for their opening comments. Over to you, Akhoury, please.
Thank you. Thank you, Navin. Good morning, ladies and gentlemen. I hope my voice is loud and clear. Most welcome to the earnings call of Shree Cement Limited, also now known as Bangur in the market, for the quarter and year ending March 2024. During our last call, we informed you that we have taken a major exercise to simplify our brand structure, with Bangur as the master brand, and also launched a new premium brand called Magna. I'm happy to see the enthusiastic support and response that you received for our master brand Bangur for the last quarter. This rebranding, as I explained last year, is combined with our accelerated channel expansion programs, but also very sharply focused on creating sustainable differentiation amongst the consumers.
The broader features of the financial results, both on year-on-year and quarter-on-quarter basis, can be summarized as follows. So, very happy to say that Shree Cement recorded its best-ever volume and profitability in the year 2023 to 2024 due to buoyancy in the demand. The total sales went up by about 8% from 31.8 million tons to 35.5 million tons, thereby increasing capacity utilization from 70% in 2022 to 2023 to 77% in 2023 to 2024.
Of course, realization remained flat at INR 4,833 against around INR 4,872 per ton last year. Operational EBITDA increased by 48% from INR 2,942 crores to INR 4,364 crores on the back of rising volumes, lower fuel cost, operating efficiencies and leverage, and, of course, our very, very major thrust on other digital initiatives. Both this quarter as well as annual EBITDA are the highest ever achieved by the company during any quarter or year.
Also, the net profit for the year is, I believe, also highest ever achieved by the company. In the March 2024 quarter, our total sales went up by 8% at 9.5 million tons against at about 8.8 million tons registered in the March 2023 quarter. Capacity utilization was also at about 79%, versus 77% in the last March quarter. Our realizations were, however, down by about 3% from INR 4,847 to INR 4,721 per ton. Fuel cost witnessed a significant downward trajectory from INR 2.53 per CV to INR 1.82 the last quarter, majorly contributing in the EBITDA increase from INR 892 crores to INR 1,327 crores. EBITDA per ton also stood at a healthy INR 1,392 per ton, up by about 38% versus last year at INR 1,011 per ton.
On the CapEx front, apart from operationalizing integrated units at Nawalgarh in January 2024 this year, we commissioned our 3 million-ton Guntur plant in Andhra Pradesh on April 2nd, April 2nd of this year. Work is also progressing well on the other 18 million tons capacity expansion projects, which we have already announced last time as well. We believe that we should be completing out of this about 9.4 to 10 million tons capacity in FY25 itself. Let's assure everyone that we'll continue to progress with all our attention on the expansion projects in the coming years as well. The company is very happy to say the company's green power generation capacity, which now stands at 480 megawatts as on 31st March 2024. This is versus 386 megawatts in March, 336 megawatts in the last March quarter.
The company is in the process of adding another 188 MW of green power capacity at various locations. During Q4 2024, Shree also became part of the prestigious RE100 initiative, where we have committed to using 100% of energy through renewable sources by, by 2050. Our existing green power consumption is roughly about 56% of our total power consumption, which will further increase to over 60% with these new renewable power plants coming in. We have increased usage of alternate fuels as well, like agro waste, stubble, hazardous waste reduced greenhouse emission. We are working aggressively on setting up advanced technology shredders and associated equipment to increase usage of municipal solid waste, which will increase our TSR level significantly. Our water harvesting and conservation initiatives have helped us, and now we are very, very proud to state, we are about seven times water positive.
This is up from six times last year. These are areas where we would like to work more in the coming years. Again, very proud to say that our new vertical ready-mix concrete business, which we announced last time, we have signed a deal to purchase five ready-mix plants in Mumbai, at a consumption of about INR 33.5 crores. Additionally, we have also commissioned 1 more plant in Hyderabad, with a capacity of 90 cubic meters per hour capacity. The company has mega plans to scale up this business very fast, and soon you will see us as an important player in the ready-mix business as well. This is from my side. Now I hand over to my colleagues, Mr. Ashok Bhandari, who's our Senior Advisor, Mr. Subhash Jajoo, our CFO, and Mr. K.K. Jain, our Head of Finance, who take this conversation further.
Thank you, everybody. Thanks a lot.
Good morning, everybody. Before we start going into the results, let me share my experience of various NDRs I have had in the last one year. The common questions which have been asked to me: why the growth is slow? What is happening to the convergence of EBITDA margin? Why are you not doing inorganic? Why are you not being more aggressive in the market? Now, to address all this once for all, you know, I thought this is the right time to tell you what the ethos had been of Shree Cement and what is the cultural background and how we have progressed. If you look at CRISIL data of per capita cement consumption CAGR from 2001 till date or 2023, if I, you may correct me, the CAGR is 7%. You'll be surprised to note that during this period, the capacity of Shree Cement grew by 17%.
So the challenge which is being faced to us, that why are you slow in capacity expansion, is probably misplaced. If we are growing more than 2.5 times the market, what more do you want, my friend? Secondly, why are you so conservative? Why don't you look at inorganic? Why don't you look at other opportunities? Yes, point taken. But let me share with you another data point. Since 1985 till March 2024, the internal rate of return generated by Shree Cement for its shareholders is north of 24%. We are exactly at 24.44%. Now, this has been possible because of a very astute capital allocation strategy and also our penchant to keep debt-free to protect the sanctity of equity.
Please understand, once we go into the inorganic section, we may capitalize the liability side of the balance sheet, which is the main value driver for equity shares. Asset side doesn't drive the value of equity, my dear friend. It is the net enterprise value, net debt, which is equity value determinant. And that is why we prefer to grow organically because when you grow organically, when you don't borrow and when you don't dilute, then you are using one fungible asset like cash and the investments into fixed assets for better productivity. Having said all this, let me give you another very interesting point. We have 3.6 crore equity shares outstanding, and we are sitting at a capacity of 56 million tons, which should go to 62+ within this financial year. In pro forma this means that for every share we have created, 15 tons of capacity.
By 2028, every share will lead to 20 tons of capacity. I challenge all and sundry to show me a single company which has created this kind of equity value, and on top of that, more than INR 5,000 crore cash in the bank. I assure you that going to 80 million tons, we neither need equity nor we need debt. We have sufficient internal generations and cash balance to meet the entire CapEx requirement. Now, I open the floor to questioning. I wanted to address all these points so that everybody is in sync with the ethos and culture. Shree has never been an aggressive expander. It has never wanted to become number one cement player in India. It has always aspired to remain the most profitable cement plant in India, and that is what we have achieved.
In between the two years of learning in capacity creation, we were not sitting idle. As Mr. Akhoury pointed out, our renewables have gone to 480 MW. We are still actively working on under 90 MW of additional capacity we could be created. This takes the renewable consumption share in the overall energy consumption from 56% to 62%-63%. Please appreciate that the arbitrage between a mix, weighted average mix, cost of energy and purchased energy is about INR 3, and you need about 66 units of power per ton of cement. Also, as Mr. Akhoury pointed out, the fuel cost has come to 182 NAR per kilocalorie as received. We don't see at the moment any uptake in this. We have sufficient pipeline to maintain at least a 182 per kilocalorie cost, so there is no threat from the fuel side. The power side should improve.
Capacity utilization has been the focus. We intend to reach the capacity utilization of 80%. We would have reached it last quarter, but for the fact that for two days, the new launch of brand event and the migration from old Oracle system to SAP had taken away about three to four days of dispatches. If you add 400,000 tons of additional dispatch, our capacity utilization as on March 31st would have reached 80%. That is the aim we intend to achieve in 2024 to 25. Hopefully, the prices should support us. I don't take a call on prices, so I don't take a call on EBITDA, but I have always taken a call on cost. I can assure you that looking at current fuel trend, looking at overall logistic pricing, and the work we are doing on logistic front should keep all these costs in check.
Balances are very nominal costs. They really don't. They are real. They don't make the cement business very sensitive. I would also like to share one point which is very important. By 2028, we intend to have rail connectivity at all our sites. Detailed statements are available, and I suggest, and I strongly suggest, that I have been privileged to be the part of Shree Cement's journey for the last 40 years. Probably, I understand this company good enough. All and all of you, all and sundry are invited. My doors are open. Come and understand first. You see, risk is for as a risk is inversely proportional to knowledge. Increase your knowledge on us, then assess risk, and take your decisions. You all are intelligent enough. You all analyze and understand the business enough.
Maybe you don't know the ethos and culture of this company so fully, so I invite each one of you to come and personally meet me just to understand how the company was managed for 40 years. Now, I suggest all your financial questions be directed to Subhash Jajoo. He is there, and he would like to clarify on all points. If I have to at all intervene, I will do. If you have a question directly for me, please feel free to say so. Thank you. I am giving it to Jajoo. Subhash.
Navin, we can start with the Q&A session.
Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchscreen telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Murarka from Axis Capital. Please go ahead.
Hello? Yeah, thanks for the opportunity. So.
Moderator Ashok Bhandari.
Haan, Bhandari ji.
Maananiya Ashok Bhandari hi hai [Foreign language]
Yes, Bhandari ji.
[Foreign language]
Nahi to, we will connect again on that one.
right, okay, fine. Thanks. Now you can go ahead and join with Jajoo. Jajoo, please.
Yeah, yes. So, on the Q4, like, couple of things I wanted to clarify. First thing, what was the power revenue booked in Q4? And also, if you could just help understand the EBITDA that came from the power segment.
Yeah, the power revenue during the March was around INR 440 crore, and roughly 10% is the EBITDA which we get out of this.
Okay. So I'm to understand the fuel sourcing that you do for power, so it, like, the coal prices are all generally have corrected to, I think, INR 1.75 to INR 1.8, even the imported coal or so broadly. So is the EBITDA margin still at 10% with the lower fuel cost that we are seeing now?
Amit, Amit, I had explained to you, we have very old CPP the power plants. Our thermal efficiency of the power plants are very low. We are 1,200 kilometers landlocked. Please understand that my repair and maintenance incidents and my fuel cost, though the fuel cost has come down and other auxiliary plus the efficiency of the plant, [Foreign language]
[Foreign language]
Sure, sure. Okay. And also yeah, other expenses seem to be a bit lower in Q4. So could you help understand, like, marketing spends were lower? What is the reason for that?
[Foreign language] The major point is lower spares cost.
Please understand, four days' dispatch already lost, because of the two events I explained. So now the repair and maintenance, which routine repair and maintenance is, that a bit deferred, that bhai, plant run and capacity then run, selling is goods. And over, over next, and this is not, this is not a one-off adjustment. This will play out when, when we reach 80% capacity utilization, because per ton spare consumption goes down then. So this is a real saving, which we have attained. We have not attained any saving. We have deferred the advertising expenses only. But still, 80% on then world fine only should remain. And tell, bhai.
No, no, that's helpful. And also, just, lastly on the volume growth, like, generally 8%, while it's not bad, but we saw companies, like, doing double-digit this time. So is it a conscious that branding strategy related?
400,000 tons add [Foreign language] , because of two special events of ye, Oracle to SAP and brand launch? 400,000 tons add [Foreign language] .
Okay. Understood, understood. Okay, I will come back in the clear. Thank you.
Ya, thank you, Subhash.
Thank you. The next question is from the line of Sumangal Nevatia, Kotak Securities. Please go ahead.
Yeah, good morning, sir. Thank you for the opportunity. Congratulations on the sector leading performance, and Bhandari ji, thanks for the reassuring opening commentary. First question on this railway connectivity at all sites by FY2028: Is it possible to quantify what sort of rate cost saving can be expected over the next 2-3 years from the initiative? And also, yeah, maybe, maybe this is the first one, then I will go ahead with the second.
Yeah, the current differential between rail and road, rail is around INR 2.60, whereas road cost is around INR 3. And currently, we dispatch, like, in last quarter, 88% was through road and 12% through rail. So as by 2028, we should be able to move much more material through rail, and accordingly, this cost economics will play. The differential is around 10% to 12% between rail and road on a per ton per kilometer basis.
Okay. So, I mean, something like 75 to 25 gradually is what we are moving at?
Yes, we should definitely be able to move at least 25% through rail in next three to four years.
Okay, got it, got it. The second question is on this RMC foray. I know it was touched last time also, but, if you could just explain overall what CapEx are we looking at over next two to three years, and, what is the thought process and the return expectation on this invested capital from this foray?
Ladies and gentlemen, we have lost the connection for the management line. Please hold while we reconnect them. Thank you. Ladies and gentlemen, thank you for patiently waiting. We have the management line reconnected with us. Sir, please go on.
Yeah, I'll maybe I'll repeat the question. I'm not sure if you heard it. I wanted to understand a bit more on this RMC for you. I know it's a very small CapEx, but overall, what are we spending over the next few years, and what sort of return are we expecting on this invested capital?
So, typically at the current level, the plan is to go for about INR 100 crore per year for next two years. We are focusing on those cities where, typically the ready-mix demand is, the market size is big. But we are also looking at some of the, tier-two cities where RMC profitability is higher. Altogether, we would be targeting at about 5% to 7% of margins on a pure-play basis, or ready-mix. And, and, typically about 100 plants by, by end of, the mid-term ambition of four to five years, yeah?
Understood. Got it, got it. And just one last bookkeeping question. This depreciation quarterly has been quite volatile. This quarter it was almost 2x the previous year. So what sort of run rate should we expect in future quarters and maybe full year also, if you could explain?
All right. Hello. The depreciation was higher for this quarter because we have just in January, the month of January, we commissioned our Nawalgarh unit, and that is the reason for the higher depreciation for the quarter. Going forward, I think you should take around INR 1,500 crore to INR 1,600 crore of depreciation for the full year because a few more units will be commissioned in the current year. Guntur has already been commissioned in April, so it should be around these levels only for full year.
Okay, but that is similar to FY 2024. I believe it should have increased, right?
Yes. Yes, it is similar.
What? Sir Bhandari, yeah. Listen, my friend. I had been telling all and sundry that when you look at Shree Cement balance sheet, there is no point looking at PAT number. You please look at cash profit number. Depreciation is specifically designed for us because that is the best way of converting your non-fungible fixed asset to cash asset in a faster manner. You would like to have more fungible assets than non-fungible assets. If you want more fungible assets, then I need necessarily depreciate my plant and machinery faster so that cash retention in the system is more, which helps us in setting up our own capacity from internal accruals itself. So there is no point, you can say, "Shree, [Foreign language] ?
[Foreign language] . Where will you have 9 million tons of capacities this year? So [Foreign language] 3 million ka, 6 million [Foreign language] . And that is why we are at this but because they are back-ended, we are seeing that the depreciation level will be almost same. Got the point?
Understood, sir. Understood. Okay, thank you, sir, and all the best. Thank you. The next question is from the line of Indrajit Agarwal from CLSA. Please go ahead.
Hi, good morning. Thank you for the opportunity. I have two questions. First, any color on how the regional demand has been in, or, in your key markets in fourth quarter?
The regional, as far as the current quarter is concerned, the demand growth was mainly in the East market, where we grew by almost 20% year-on-year, followed by North, where the growth was around 5%. In South, there was a slight decline of around 9% to 10%. So overall, the growth was around 7%.
Sure, that is helpful, sir. And thank you, Mr. Jajoo, for initially highlighting the cash flow and capacity extension philosophy of the company. But if you look at the balance sheet, you have about INR 5,000 crore of cash, INR 5,000 to INR 6,000 crore of cash already sitting, and your organic CapEx would more than be sufficient from your current cash flows. You will throw off much more cash flows than what you need. So what is the thought process and the use of cash in the next three years?
What do we do about the limestone options, which are frequent? We give them up, or we borrow for them. You have to appreciate, my friend. We are not in borrowing mode. We are not in equity-raising mode. We will prefer to remain cash long, to remain limestone long. CapEx, yes, you are right. I have INR 5,000 crore of cash. I will be needing that for this year CapEx. But the cash generated during this year will be retained for limestone options. Ah, this is not you see, this, this is what Indrajit, I wanted really you guys to understand. Come to me and understand how we see this business. It is not possible. It is not a spreadsheet game. A 40-year culture has gone into it. We have reaped the benefit. I have given you a 24.5% IRR. I have given you 2.5 times capital in capacity creation.
I have given you net cash balance sheet. How this has all happen? This has all happen because of a philosophy, because of an ethos, which we follow. Aap aao. You had ask for time somewhere, I think next week or something. You are most welcome. Come and sit with me. I will explain you how we have grown, why we have grown, and why we pursue this strategy. Okay?
Sure, sir. I will reach out separately. Thank you so much.
Thank you. The next question is from the line of Prateek Kumar from Jefferies. Please go ahead.
Arre, take it. That's what I don't.
Yeah, yeah, good morning, sir. Congrats for great results and great EBITDA turn. I have a couple of questions. Firstly, on CapEx, so in the presentation, presently, they talked about going to 56 to 66 million ton capacity, which probably means, like, 12 million ton addition. Talked about 10 million ton in ongoing demand. So what is not included there, on which all capacity they are looking to commission this year?
One minute, Prateek, please understand. We promise you 62 million tons by March. We can extend to 65 depending on how our branding units start shaping up. So it is very difficult to pinpointedly give you that [Foreign language] . We will deliver and then explain, instead of proclaiming and then explaining.
Right, sir. So the ETA, ETA branding unit is probably, which is we are looking at, maybe 1Q26. So that is the only difference, sir.
25. ETA promise March 25. It has too much of logistical advantage. We can't afford to delay that project.
I will say, all these projects are going at full speed, yeah. Most of them are to be commissioned in the last quarter of this year. There could be potentially some delay, unanticipated and uncertain delay. And therefore, we are being cautious by the current speed. We expect that 9 million tons should be commissioned in this year itself, 9 to 10 million tons, and rest in the coming year.
[Foreign language] .
There make sales? Yeah?
That makes sense, sir. Secondly, they have been prepared solely around amalgamation of Shree Cement East Private Limited and North, I mean. So what is the strategy there? Why are we not amalgamating them in standalone operations and amalgamating separately?
We have to understand that both these companies are under new regime of tax, enjoying a tax rate of 15%. Amalgamating them in Shree Cement will have a tax disadvantage. And we want to have an entity of 15% tax bracket so that whatever expansions we can do logically in those companies would keep on getting tax rate 15% only. [Foreign language] ?
Okay. So incrementally, sir, till now, we are giving standalone volume. So we should, we start looking at consolidated volumes and numbers from, maybe, I don't know, from when they are looking to go meaningfully?
Look, Nawalgarh was commissioned in January, Guntur was commissioned in April. So you give a little four months. Maybe H2 onwards, we will give you some consolidated number. But let, let the plants stabilize, right?
Right. And last question on RMC revenue expectation. Is there any revenue expect? I mean, we talked about INR 100 crore CapEx numbers, but any revenue expectations we have for, like, first three years outlook for something, and maybe first year?
RMC takes a while to stabilize. You know, I mean, typically, it's a cyclic time of six to eight months before you are able to operate it at a for the certain capacity. The five plants that we have taken, that we have acquired in Mumbai, they already have a customer base, so that could stabilize really quicker. But the greenfield plants take some time to stabilize. In my experience and opinion, typically, six to eight months before it starts becoming EBITDA positive. And that's the, that's the way it will be in this. Give us this year. This year will be a crucial year because we are embarking on a new journey. And maybe by, by early next year, when we start projecting, we will be more accurate in terms of RMC.
In any case, the proportion will be, if I may use the word, not insignificant, but very small compared to the whole cement business that we are doing. We should not have much of a material impact on our results.
Sure, sir. Sorry, sir. I can, I can ask one more question on the premium segment. We had a brand makeover, like, earlier this quarter, last quarter. What is the expectation on price improvement for our product, like, as we see there by, like, some of the other companies, and proportion of our premium cement on overall trade sales in next one, two, three years?
It has been established in the month of January. It is still stabilizing in the market as a new brand. It takes a while, people. What I expect that, Bangur Magna, Magna being our premium product, for, for till now, as one brand premium product strategy, we should, hopefully aspire to be to reaching somewhere around 12% to 15% of our total sales, yeah. That journey continues. A lot of initiatives are being taken on how to improve, Magna consumer pull. You have seen, us more active on the mass media, like television and social media. We expect the pull to be created. Magna is also one of the, products made from the industry best standards on quality.
So we expect that Magna pull should further enhance in the coming quarters, and it should reach about 12% to 15% of total sales.
Thank you, sir. One more question.
Thank you. The next question is from the line of Pulkit Patni from Goldman Sachs. Please go ahead.
So, sir, thank you for taking my questions. So my first question is on pricing. I mean, uh, because you spoke about the mix, it looks like, despite having an adverse mix, your realization decline was actually lower than most of your competition. But my question is more broadly on this 5% to 6% QoQ decline in pricing. Now, Mr. Bhandari, you spoke about, you know, 40 years of experience in this industry. Can you think of a time period where, between two quarters, prices decline 6%? And how do you read this into how the pricing environment is evolving? Is it different than what it has been? Is it larger players being more competitive? So if you could just talk about how you are thinking about this pricing dynamic, uh, from a medium term perspective, that would be helpful.
So, sir, reinventing the wheel. The price is completely dependent on demand supply situation. So demand and supply, supply side, we are quite confident that it will not go berserk. Demand side dependent on macroeconomics, today majorly government project. And also, also remind you that over last 40 years, I have never taken a call on cement price, because it is impossible for anybody in a world, for any commodity price. If there is no point, we are just maintaining the stand that how we will be the most cost-efficient players. And if it rains, everybody gets wet. If prices come down, yes, we will also get wet. If our operating efficiency is directly proportional to our capacity utilization, we expect to do capacity utilization of 80% this year, which should effectively result into a production of about 39 to 40 million tons.
At 80% capacity utilization, having everything constant, cost coming down, we expect EBITDA margins to improve. But then it is all dependent on how the top line moves. And it is beyond anybody's control, anybody's control in the world, to define the top line of any commodity business. And that is why I can not define the EBITDA. I can tell you that we will remain the most cost-efficient player in the industry. That's it.
Sir, Sir, I fully appreciate that. But I am sure there would be a reason internally to think about why these prices are where they are. I am just trying to understand, what in your opinion is that the case?
Oh, my God. No, no, no, no. Just let me hold you there. No. Even if we try to do anything, can we effect it? No, we can't. It's a completely market-based phenomenon. I told you the laws of economics are supreme. Demand supply is what determines the prices. Today, the demand is low because the election or whatever reason. Summer, neighbors going for the harvesting to their villages and voting as well. If the demand picks up, the prices are likely to pick up. There are no dynamics. Please, you are, you are unnecessarily looking at industry dynamics, internal dynamics. There is nothing like that. The demand is down. That is why the price is down. Let demand supply correct. Prices will automatically see an uptick. [Foreign language] ?
[Foreign language] the macro principle of demand and supply defines the prices. [Foreign language] . Demand supply reigns to supreme.
Theek, theek, theek hai, sir. Sir, second question, what is the kind of coal inventory we have right now?
Oh, my God. I don't know. I have to look and come back to you. What is it? It's around, the current inventory as on 31st March is around 1,400,000 tons. And the average fuel cost is, as the same, like $1.8, $1.8.
1.8 टन.
What is the pipeline? Does it include the pipeline? Is it rules the pipeline? 1,400,000 tons is equal to how many months of consumption? Up to October. So at least four months of inventory we are already having at this rate.
Very helpful, sir. Thank you.
Thank you. The next question is from the line of Raashi Chopra from Citigroup. Please go ahead.
you. So just from the cost side, your realization on a sequential basis have declined 6%, and you got a flat EBITDA per ton. So the correction in the cost, is that largely ought to be attributed to the, you know, the marketing and the stores and spares that you mention, or is anything more in this sequentially?
Oh, no. There, there are two-three things, Raashi. Ashok Bhandari here.
[Foreign language] .
One is, of course, spares and stores and spares—[Foreign language] . The biggest beneficiary of my cost reduction is coal. The coal prices have come down by INR 0.70 over the year, INR 256 to INR 182. So that INR 204.
[Foreign language] .
Yes, quarter-over-quarter is INR 197 to INR 172?
178 to 182.
Coal cost too actually gone up, I think, sequentially, a little bit to me.
INR 1.82 badha hai. You are right, INR 1.79 to INR 1.82. Sir, [Foreign language] that operating efficiency is directly proportional to capacity utilization. 79% ka capacity utilization [Foreign language] .
So I think, I mean what I am trying to ask is, in this like you were saying that, you know, you reduce some of the expenses on the brand building, etc. So how do we look?
If it's got deferred, AI expenses got deferred.
[Foreign language] .
Because if the idol, we would say that the brand idol doesn't have time to shoot, to shooting [Foreign language] . So it just got deferred. Paper advertisement and publicity, we went low because we wanted to see how the market react to our new brand strategy. It will also get recouped. Stores and spares is yes, one time correction, small correction, and should last because of higher capacity utilization. The part and spare cost comes down.
Got it. And sir, what was the, I know the overall year, green power was 56%, but for this quarter, what was it, the proportion?
And, and 50? Around 54%. It's 56% last year kaise mila? Overall last quarter mein ja raha hai. Achcha, okay, right.
50 [Foreign language].
You are talking of quarter of?
Quarter, quarter, sir. 54%. It's 188 MW that you are adding. This is likely to come through in the course of this year, the next couple of years? Like what are the timelines?
I know, major up to March 2026. Major part is March 2025. I think about 100 MW is March 2025.
148 MW is by March 2025, and balance 40 MW is by March 2026.
The total, this is the breakup for 188 MW.
And if you don't mind, possible to break up the 188 between, like, WHR and wind solar?
Yes, sir. It's 34 MW is the WHR, and 114 MW is solar.
3.4 is WHR, yes? Your voice interfere.
Yes, 34 WHR, 114 MW is solar, and the next year 40 MW is also solar of that year.
That's clear. Thank you, sir. And just lead distance in this quarter?
435[Foreign language] .
So this has come down from 448 in 3Q?
No. In 3Q it was 457.
So it's come down annually 20 km?
[Foreign language] .
Okay. Thank you, that. That's it.
Thank you, Raashi.
Thank you. The next question is from the line of Shravan Shah from Nomura. Please go ahead.
Hello. I thank you for the opportunity, sir. You guys ask a, you know, great set of numbers. I just want you to understand, ah, Since our power and fuel cost will most likely remain stable. We are, you know, Shree Cement is the lowest, ah, cost producer right now. What is the cost drivers, ah, from where, ah, you know, Shree Cement can see?
[Foreign language] So, understood, sir. So green power.
[Foreign language] .
Right, sir. Understood. And sir, one more thing on, you know, the volume and demand scenario. If I remember correctly, you know, last quarter you have given a target of around 40 million tons for FY 26. So given, we have already been one and a half months.
[Foreign language] 25.
FY 25. Sorry, FY 25. And we have already seen one and a half months of, you know, demand scenario. Does that guidance still hold? And how is the, you know, demand in each of the region we have seen in the, you know, one, one and a half months?
There is no point throwing the towel so early in the year. Yes, the 1.5 month has been slow. But we expect H2 to be much faster because by that time the government will be operational in full swing. All orders will be there, and good demand should come. So at the moment, I am guiding 40. [Foreign language] .
Understood. And just one clarification.
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Understood. And just one more clarification, I think Mr. Neeraj Akhoury and you also mentioned that most of the capacity expansion will come in the fourth quarter or last leg of the FY 2025. Is that correct?
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Correct. Okay. Thank you so much, sir. I will get back in the.
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Thank you. The next question is from the line of Rajesh Kumar Ravi from HDFC Securities. Please go ahead.
Hi, sir. Good afternoon to the entire team. Thanks for detailed presentation, in terms of numbers. Sir, my first question pertains to, could you split out how would be the CapEx expenditure in FY 2025 to 26, and how much was the incentives booked in Q4 and full year FY 2024?
Look, what you have to understand is that to complete 6 million tons of capacity will be needing about INR 6,000 crore.
[Foreign language].
[Foreign language].
[Foreign language] .
Haan, [Foreign language].
Correct. Incentive, sir, Q4 and FY24.
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[Foreign language] .
Haan, [Foreign language] question tha?
Incentives booked in Q4 and FY24.
[Foreign language] . Booked in Q4 FY24 balance sheet utha ke other operating income [Foreign language] . But that is a disclosed number.
[Foreign language].
[Foreign language] ?
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Sorry to interrupt, sir. Ah, I would request Mr. Ravi to please follow up in the question queue for further questions. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to one per participant. Thank you. The next question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead.
Yes, hi. Thank you for taking my question. I have a couple of questions. Sorry if I missed earlier. Can you help me with the realization number for the quarter?
Realization number means cement realization, power realization, what you want, my friend?
Cement realization, sir.
The cement realization for March is INR 4,721. And for last year it was INR 4,848 per ton.
Oh, thank you. My second question is, I know demand has been relatively weak in the first 1.5 months of this quarter. Can you help me understand how prices have behaved across your home geographies? That will give us clarity in terms of how demand has been across markets. Thank you so much.
They are stable to weak.
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The pricing is stable to weak.
This is versus. Thank you, sir. This is versus, March, exit prices or versus, versus the quarterly averages?
March, March exit prices.
And, we have been seeing stable to weak across markets, right?
Well, you see, there are various markets where there are still pockets of lucrative pricing for power. So it will be very difficult. We will have to go into an analysis. As, as far as the company is concerned, we look at the average gross realization. So average gross realization is lower than exit March 2024.
Thank you. The next question is from the line of Parth Bhavsar, sir, from Investec. Please go ahead.
Hi, sir. Sir, thank you for the opportunity and congratulations on the good set of numbers. Sir, I just have one question. Just wanted, revenue contribution from power segment last year, Q4 FY 2023.
440 crore?
So this was this year, right? 440? I wanted last year number.
Q4? Yes, last year was INR 343 crore, March 2023 quarter. Yes.
Okay, 343. And, and one can assume same 10%. Same 10% at EBIT amount, right? Okay, sir. That was my question. Thank you so much.
Thank you. The next question is from the line of Navin Sahadeo from ICICI Securities. Please go ahead.
Yeah. Thank you for the, uh, opportunity. Sir, just one question. Ah, ah, this was, ah, more a, a bookkeeping in the sense the difference between the consolidated and standalone, where I am seeing the difference on revenue front is a very stable 330, 320 crore in the past two quarters. Or even on a year-on-year basis, ah, revenue difference is about 300 crore. But EBITDA for the quarter difference is a good 95 crore versus 33 crore 30 odd crore maybe in the previous quarter. It used to be really marginal, like, you know, loss or marginal number in the past. Could you help us understand?
have been fortunate. We have been fortunate in our Ras Al Khaimah operation, UAE operation.
Is there any one-off or, how should one?
Ah, I feel it is one-off, but let, let time tell.
Sure. I just wanted to clarify on this because the previous participant had asked about one of the previous participants about consolidated numbers. So does this consolidated number has any volumes or benefits of any domestic expansions as such?
come back again. What you want? Ah, the domestic expansion so Nawalgarh chhod ke kuch aaya nahi?
No. So exactly. So Nawalgarh is not in the consol, right? Is not a separate subsidiary. It is in the standalone number captured.
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Agree. I was only saying, I just rephrase, standalone mein Nawalgarh capture [Foreign language] ? That's all the clarification.
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Correct. Nawalgarh standalone [Foreign language].
Perfect. That's all I wanted to clarify. That's it.
Sir, unit there in Shree Cement itself. So obviously it is there in the standalone. Anything which is there in our subsidiary East, like the Purulia unit, that will not come in the standalone and come in the consol. But anything which is there in Shree Cement will definitely be there in the standalone numbers.
Ya, ya. That was only clarification. Thank you.
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Navin, are you through with all the questions? Hello? Hello?
Yes, sir. The next.
I just have one closing remark to make. Once you guys come and meet us, and you have more meetings with us, you will understand that we have the uncanny habit of pulling rabbits out of the hat. So don't think that we have disclosed everything what we wanted to say, what we are planning. Look for further surprises. Thank you.
Thank you, sir. The next question is from the line of Ashish Jain from Macquarie. Please go ahead.
Ashish Jain, last question. Ashish? [Foreign language] ?
No, sir. Sirf one question hai, sir. Just railway lines, what is the progress? I wanted to understand.
Haan, sir. Of course, main [Foreign language] . That chart I will mail you tomorrow. I am in Delhi today. I will mail that chart to you. Aur I will take a WhatsApp and send it to you.
Yes, sir. Thank you, sir.
यस, सर.
Thank you. Ladies and gentlemen, that was the last question for today's conference call. I would like to hand the conference over to the management for closing comments.
Thank you. Thank you for all our shareholders and all everybody in this conference call. We did get to see that the numbers were pretty large. I think about 250 people together in the call. Thanks a lot. As has been said, we will be progressing very strongly on all the topics that you all have raised. What we have committed is what we have committed, and we will deliver that. But clearly, the effort will be to exceed your expectations as well. With that, we will bring this call to end. Again, thanks a lot, and see you next quarter.
On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect this meeting. Thank you.
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