Good day, and welcome to Ultratech Cement Limited Q1 FY 2022 Earnings Conference Call. We must remind you that the discussion on today's call may include certain forward looking statements and must be therefore viewed in conjunction with the risks that the company faces. The company assumes no responsibility to publicly amend, modify or revise any forward looking statement on the basis of any subsequent development, information or events or otherwise. As a reminder, all participant lines We'll be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded.
I now hand the conference over to Mr. Atul Dhaka, Executive Director and CFO of the company. Thank you, and over to you, Mr. Dhaka.
Thank you. Good evening, everybody, and thank you for joining this call to discuss our earnings for Q1 FY 2022. 1st and foremost, I wish and pray that all of you are safe and vaccinated. Global economies after reaching a vaccination status of in excess of 70% are shagging the burden of COVID and making it a part of Live, we should also commit ourselves to the cause and get ourselves vaccinations get our vaccinations completed at the earliest whoever has not Done it yet. With Wave 2 of COVID reasonably under control, we have seen revival of demand As the statewide lockdowns have been gradually been coming off, demand saw Resurgence from almost all fronts, I.
E. Trade and non trade. This quarter, we have achieved a growth of 48% y o y. An interesting point to emphasize upon is the growth trajectory that we have demonstrated quarter after quarter Since Q1 FY 'twenty one, growing faster and rapidly as compared to rest of the industry. And all the growth has been without new capacity addition, organic or inorganic.
We achieved a capacity utilization of 73% This quarter with South going above 50%, North being above 75%, East more than 95% and Central and West doing 70% plus. This needs to be looked at in light of the previous quarter where Ultratech operated at 93% capacity utilization, Ending March with 99% capacity utilization, we grew 30% YOY last quarter and 17% Q o Q as compared to rest of the industry growing 22% 13%. This I'm referring to, ladies and gentlemen, for the January, March quarter. It is important to keep this factor in mind. And our growth was mostly organic as compared to the industry having added nearly 3% additional capacity.
All of you know that Alchetaq is a growth hungry company and the country's cement consumption is expected to keep on growing. This is what propelled our expansion plans, which are more or less on schedule. You will recall our expansion plans of 19,500,000 tonnes, which we started towards the end of last calendar. We expect the next quarter to come to 3,200,000 tonnes, which will be in East and Central Q1 FY 'twenty three about 3,500,000 tons, which will be again East and Central. The next three quarters would see the balance, 9, 11, about 12 odd 1000000 tonnes of commissioning happening in the remaining We are on course to complete all our expansions By the end of FY 'twenty three, Our cash flows continue to grow stronger with every incremental capacity going on stream.
We have reached net debt EBITDA of less than 0.5% already. Going to net cash on the balance sheet is within sight after absorbing all the cash flows for our growth CapEx this year. Talking about cash flows, COVID had an impact on our cash flows this quarter. Although we saw A reduction of INR 733 crores in net debt this quarter, we could have done better because a lot of working capital requirements came up in this quarter suddenly due to the surge in COVID cases.
Our confidence on
the cash flows has helped us increase our dividend payouts to the shareholders, and we will meet our Ongoing CapEx out of internal approvals and yet be net cash on the balance sheet as committed In FY 'twenty four, for sure. Happy to share with you that today, we have again, Today, we have prepaid another INR 5,000 crores of long term loans. Today, I will criticize 22nd of this month. We have doubled our growth to around 16.5% from the ABLE stock around 8% in 2018, and we'll continue this trajectory as well as we keep improving our earnings supported by low cost expansions and asset splitting. R and C and white cement both were impacted due to COVID lockdowns this quarter.
In spite of that, we have added 4 new RMC plants this quarter, taking the tally to about 136 and achieving a growth of more than 38% in RMC YOY. White Cement volumes were a bit slow, but now they have started catching up. Work has commenced on the Putti expansion plan in Rajasthan as well, which should get commissioned in Q2 FY 'twenty three. Happy to tell you about Dalla Super Unit. We have received a Stage 1 approval from MOEF for the plant.
For refreshing your memory, it is a 2,300,000 tonne clinker facility, which we had acquired from JP. Stage 2 approval is in process, and we expect to start work on the plant and commission it by March 'twenty two. Let's now talk about the brass tacks, namely demand, supply, prices, costs. Our views have one big assumption that Wave 3 will not impact the business. Demand has started picking up on all fronts.
Against the earlier fears of rural slump, we have seen the rural cement consumption also increasing in almost all the corridors, in particular, Central and East, followed by other parts of the country. It is clearly reflected in our trade sales jumping to about 70%. Urban real estate continues being pulled up by the current situation of lower interest rates, government subsidies, the need for space being felt due to COVID. And large infrastructures and large infrastructure projects continue to generate increase in demand across the country. Infrastructure projects, if you would talk about a bit, roads, there is a big emphasis on road infrastructure, both by way of speed of construction as well as awarding new projects.
As on June end, The daily road length completion has reached 37 kilometers per day versus the target of 40 kilometers a day. I remember talking about these numbers way back in 2014, 2015 when the speed of execution was 3 or 4 kilometers This number was unbelievable, but the government has actually achieved and delivered it. Greater emphasis is given on the completion of expressway between Mumbai, Delhi, Nagpur, Mumbai, Bangalore, Chennai, Delhi, Varanasi, all of which are cemented roads. Just to refresh again, one lane kilometer of cement concrete road takes about 100 tonnes of cement. Metros, all the metrorieal projects which were announced in the last budget are going on.
In addition, The first RRTS connecting 8 satellite towns to NCR, Gajabag, Meerut, Alwar, PANIPAT, etcetera, is all going on full swing. The other major new development which is taking place in the space of infrastructure is Health Infrastructure. To tackle the potential challenge of COVID wave 3, recently, the government has allocated as much as INR 21,000 crores from the PM Relief to develop public health centers. Oxygen plants are coming up in all district hospitals, 15 All India Institute of Medical Sciences, vaccine manufacturing facilities, all of them We'll, of course, complete cement and alternative stressors everywhere. To talk about airports, The work on all regional airports has started as part of Hudan's scheme to connect lot of districts of commercial and tourist importance.
Smart Cities, worth mentioning about that. What is going on to build sustainable connected infrastructure in these places to improve the urban infrastructure to address the rapid urbanization of these of the country. High speed train, which is a bullet train project, work on the 1st Mumbai Ahmedabad section has started in Q1 and will pick up pace in the remaining part of the year. Clearly, infrastructure will lead from the front. Another interesting phenomena worth sharing with you is changing landscape of logistics for Cement.
The painting is still on the canvas and we have seen a few brushstrokes only. I am referring to DFC. DFC started emerging as a game changer for logistics. Few patches have already been implemented. The total program as of now is for around 2,800 kilometers, out of which nearly 4 35 kilometers is in operation.
It is important to note that the rig speed has doubled. The rig size will become 4 times the current capacity. You can visualize the impact it will have on the cost of rail movement and shift from road to rail. And Nadwana cement, which we acquired recently or 2018, is already connected to DFC. Axle load of these rigs will also increase.
Max speeds off will increase 33%, I'm told. Rig packing capacity will increase more than So this is going to be a game changer for logistics and I think we are very well connected. To talk about input costs, both coal and pet coke have been threatening to break all the chains around them and continue to surge. Demand from China as usual is one big lever driving our prices. Coal has gone up from $60 in Q1 to around $100 Plus $120 in June, pet coke is hovering upon $160 July loading U.
S. Petco cargoes have been offered somewhere around $1.60 to $1.63 per tonne, but without any buying interest. Saudi origin cargoes are being offered around $1.40 per tonne. However, the industry so far has shown resilience against these cost pressures with price improvements, I. Cost pressures are being passed on in prices, thus protecting the margins.
Talking about prices, prices have generally been stable to strong in most regions. We have noticed an average of 6% to 8% increase in regional prices in regional markets, East and South growing somewhere around 10%, West growing 7% to 10%, North and Central growing 3% to 6%. In the end, I would only say, don't worry about these line items. Let the operating teams manage that. We have this quarter delivered an EBITDA per metric tonne of around INR 1600 per tonne, which is the highest so far and will go higher further.
Growth of 17% from less than 10% till 4 years ago, a growth Faster than the industry, fastest deleveraging program from a 3.4x in December 'eighteen to 0.4x in Q 'twenty one And all growth financial internal approvals, We deliver what we commit. Thank you, ladies and gentlemen, for your time and over to you for questions.
Thank you very much. We will now begin the question and answer session. Participants are requested to use handsets while asking your questions. Ladies and gentlemen, We'll wait for a moment while the question queue assembles. The first question is from the line of Sumangal from Kodak Securities.
Please go ahead.
Yes. Thanks for the opportunity, sir, and many congratulations for the results. First question is on the realization you touched on a little bit on the opening remarks, but we've seen a healthy increase Even in this quarter sequentially and a bit more than what we were anticipating. Is it possible to share some more regional colors for us To better understand this and also as trade, non trade moved during the quarter. And lastly, some color in how prices are shaping up in July?
July typically slows down a bit, and you are seeing heavy rains across the country, and it is premature for me to talk about the ongoing quarter in detail. And For prices, regional prices, I had already given a breakup in my commentary, East and South around 10% West 7% to 10% Northeast 3% to 6%, The price hike which we saw in the last quarter.
Okay. And so the trade in the non trade also moved Okay. So next question is on the cost. I mean, we've been keeping cost impressively under control. But I mean, as you said, the recent cost numbers for TypeCo, I mean, what sort of cost inflation is Expected on that front in the coming 1 to 2 quarters, if you can get some directional sense.
And also any line item on the fixed cost is something Which was lower because of COVID led restriction and that is somewhere where we see increase in coming quarters as we return to normalcy?
On your first question, we have not seen Any respite in the prices of coal and petco, fuel prices essentially, And we don't have any signals or indications whether production of oil increasing and the spread coke increasing or the Coal mining output going up or China demand coming down. Nothing is visible. So it might And what is happening is Petco, as I was mentioning, cargoes are being quoted, but there is no offtake. So there will be a tipping point after which either the prices start Reduce the speed of increase or slow down or stop or you see some correction. It's very difficult as of now to give any trend on which side the wind is blowing as far as fuel prices is concerned.
The second point you were asking about overheads, COVID related overhead or impact due to COVID is Mostly on travel, I would say, because the travel costs have gone down dramatically. Plants are running as usual. Maintenance costs, we have pre poaled some maintenance costs this quarter, Which will benefit in the subsequent quarters. So I don't foresee any spike in fixed costs From where we are right now.
Understood. So just last follow-up on this pet cook topic. So is Is it possible to share what would be a consumption cost in 1Q versus the current procurement? Procurement you already shared, but consumption cost in 1Q?
I'll just double check and give the number during the call. Can we move to the next question,
Thank you.
Thank you. A request to all the participants, please restrict to 2 questions per participant. If time permits, please come back in the question queue for a follow-up question.
And last quarter?
The next question is from the line of Menakan from JPMorgan. Please go ahead.
Yes. Thank you very much, sir. So just following up on the previous question, in terms of you said July is seasonally a weak month. So is it fair to say that the prices which we saw in the Q1 have broadly held up in month of July across the key markets? Or July has We have seen a correction versus the June quarter averages?
I wouldn't be tracking day to day prices, but Generally, prices don't go up. At times, there might be some pressure. I have our Managing Director, Mr. Jawahar, also on the call. Perhaps he can give a better color.
Yes. Very good afternoon to you. Yes, Mahindra, at the The prices are in the range, but as you know, the last 1 week, 10 days, the monsoon has picked up across the country. So definitely, There generally used to be some dilution in the prices, but it will be very It's difficult to just at this point of time whether it could continue or whether it will stay at this stage, actually. But yes, Once there is a demand pressure, you understand there used to be some price increase, the year end there.
And from Edison Logistics Coast and the Vodang Coast, etcetera, that also impacts real life.
Understood. That is very helpful. So my second question is on energy cost. Now as you mentioned, there is relentless cost surge and what we understand is that Newcastle high grade coal prices have Cross $150 a tonne. Now as the company would be maintaining a certain amount of inventory, Has the policy changed?
Are you buying less coal at this point of time and pet coke in the expectations of price fall? Or broadly you're maintaining the same inventory?
We can't take that risk.
We are
not speculative in nature. We have to protect the operation. So at any point in time, we would carry 45 days of inventories.
Understood. And so that broadly stays the same?
Yes.
Understood. Thank you very much.
Thanks.
Thank you. The next question is from the line of Indrajit from CLSA. Please go ahead.
Sir, two questions. First is more on the medium term. Thank you for the detailed explanation of demand drivers. But what we are seeing on the supply side is some of the lime Mines which have been auctioned are struggling to pick up given the new mines app. So on a 5, 7 year period, How do you see the demand supply dynamic changing?
Do you think that utilization could tighten meaningfully more than probably what the street is expecting or what we are
I have always been of the firm view that utilization will tighten over a longer period of time. Lines on mines Obtaining our lines of mine and auction is one aspect first aspect. The next on line is land acquisition and various Which is a time consuming process. It becomes expensive because The operating cost for the new plant comes will go up because of the royalties, the premium that is attached to it. Cost of land goes up because it's all in public domain, which company has bought the Enough quiet lines on mine.
So it becomes difficult to compete. Yes.
Just to further add upon what Atul said, because there are Lots of regulatory requirements. So the overall gestation period of the project gets announced. So generally, if you have a Direct allotted mines, you can put a plant in 2 to 3 years' time, depending on the location and the issues there. But now 5 to 6 years is the general tax, auction and then finally, concluding the Auction, commodities and land acquisitions, etcetera. So that's the reason things are going to be A little bit.
Thank you for the detailed explanation. A follow-up to that is in the last annual report, you had mentioned that we have reserves to expand capacity By up to 50,000,000 tonnes, none of our mines get impacted by this. Is that correct, Alastair? Sorry? In the last annual report, you had mentioned that we have reserves to go up to 50,000,000 tonnes additional capacity organically.
So none of our mines Or our reserves get impacted? Whatever we said, it is fully protected. Okay. And one last question, if I may. Are you sharing the working capital and the CapEx numbers for this quarter?
What was the working capital?
The fees spend was about INR 1,000 crores cash out. Our working capital went up INR 600 crores or INR 700 crores.
Yes, which is a very normal feature because Q4 versus Q1 always high. And number 2, the milestone build up milestone takes place for inventory.
So I'm not particularly disturbed about Spike in working capital in this quarter. So as Jahanji also just now mentioned, Q1, April, it always spikes up. Historically, you can check n number of quarters, it always spikes up. And then it will start tapering down and I'll release both working capital.
Got it. Thank you so much for the answer, Oliver.
And just to complete the previous question, the consumption cost was $123 per tonne of fuel in this quarter as compared to
The next question is from the line of Ashish Jain from Macquarie.
Please drop out. Take the next person, please.
The next question is from the line of Amit Muraka from Motilal Oswal. Please go ahead.
Yes. Hi. Good evening, Mr. Dalla. So, the first question is around The capacity, so while we mentioned that about 3,500,000 tonne will be commissioned in 2Q, so that Includes the Dala sorry, the Bara Phase 2, right?
Yes, Bara Phase 2.
Okay, okay. And also like just in terms of the cash flows and we are generating exceedingly strong cash flows and I believe For the full year, it looks like we should be generating 12,000 crores plus. And now that the leverage is coming down substantially, So like is there any I mean, what is the thought around the utilization of this cash flow? Will it go towards Further organic growth or will inorganic be also on the table? How will it be?
It will go towards growth
And shareholder returns.
Okay. Okay. Got it. And so on trade, I missed the trade mix Remember, what was the trade mix in this quarter? 70%.
Sorry? 70%. 70%. And blended cement would be how much?
72%.
Okay. Got it. Also during the quarter, like My understanding was that generally the larger projects did not get impacted as much because on-site workers were there.
So there was a bit of a slowdown, Amit, in whatever we've understood and things
are currently picking up.
Okay, okay. Now why I asked that is in the last quarter, the trade mix was 67% and this quarter, it is 70%. So Do we think that the non trade activity slowed down more than trade in this quarter? Or was it just because In the last quarter, you could capture a bigger share of the non state market.
What was happening is the impression being built on the assumption Being made in this quarter was that rural markets have slowed down, rural markets have slowed down, But rural markets did not slow down actually, and we saw a good amount of demand surfacing from rural areas. My absolute quantity of cement consumption in non trade is continuously going up also.
Okay, sure.
Because it's too difficult to dissect
Okay. Let's
just slow down. I know some real estate projects where they were having 500 laborers on the site and now they have 350 laborers. But the entire team of 3 refined laborers does not work on cement only. In the sense, cement related payment become other staff also involved in the project. Very difficult.
If you have been traveling to Worley, The coastal project has been on throughout.
Right, right.
The
projects could have once all whichever area was badly hit. I'm just assuming I don't know any project in Kerala, but Kerala is so badly impacted with COVID, it must have been yes, Jameel.
Yes. Just to add upon, I think There are some disruptions from site to site actually centrally because somewhere the impact of COVID was heavier than the Libergains must have left actually. But to our the best of understanding The work is on, on the most of the sites. Nowhere, technically, the 0 kind of activity there, potentially. So The work is going on, but maybe a reduced rate at second side.
Okay, understood. And just lastly on Century, like what percentage of brand transition has already happened?
Everything completed. We had the Satish Gutter plan we are not doing, so That continues to operate on the whole plan.
Okay. And when will the work be started on Satishwar? I believe you'll have to do some CapEx also there.
So decision has not been taken on that as yet because we are having a lot of other expansion happening, plant Within 100 kilometers, which is less than 100 kilometers, which will hear me is undergoing expansion. So we are not making a decision on that yet.
Okay, okay. And that would be roughly 15% of volume, if I'm not wrong, of the century volume. The breccon capacity would be 15% of the Century capacity if I'm not wrong.
2,000,000 tonnes, 2.4000000 tonnes out of 40.6.
Okay, got it. Okay. Thank you very much. That's all.
Thank you. The next question is from the line of Lokesh Garg from Credit Suisse. Please go ahead.
Hi, sir. Good evening. Yes. Basically, just want to ask you in terms of quarterly volumes, you have ended up the quarter, Let's say comparing to 1Q 2020 base almost unimpacted, while obviously, Nation went through a massive COVID wave with all the disruption that it caused. Could you also give us a sense, although it's backward looking,
I understand there is a lot of
excitement going forward, but could you also help us understand how did April, May June Individually pan out because then the June momentum could at least help us get insight into what we can look forward to.
So June capacity utilization was obviously the highest, way above 70%. The sorry, 74% was June
70%.
Could you sort of share this commentary in form of Y o Y volume moment?
Monthly, Nava,
I don't want to talk about actually.
Okay. Any other way you
can give this perspective on how things have panned out as we move from
I'll Share with you the directionally, June had improved much better than what April was doing.
Okay, sure. Thanks.
Thank you. The next question is from the line of Satyadeep Jain from Ambit Capital. Please go ahead. Hi, thank you. Both of my questions have been answered.
Just one quick question. After the expansions, you mentioned Edney, Drinker in Grand Unit Expansion, all the other expansions in each. By FY 'twenty three, would you have Clinker, short AT and T?
No. The other thing that
is happening is Dalal clinker is coming up, which was stuck for a long time, which is essential but in close proximity to serve Asian markets. Hiromi is expanding with clinker, so we will not have clinker shortage.
Okay. Thank you. Thank you. The next question is from the line of Ritesh Shah from Investec. Please go ahead.
Hi, sir. Thanks for the opportunity. So my first question is
Ritesh is asking an easy question, please. Yes, sir. Asil,
for this quarter, did we have full benefit of the MMDR amendment, which I think was March end? Is it possible to quantify the amount?
I will get the quantification done and share with you, but it's Fairly simple, dollars 64 a tonne on limestone. Okay, okay, fine. And sir, second question is 30,500,000 tonnes, you can Motamudi, you can take the same ratio, 30,500,000 tonnes of line shown
Okay, great. So my second question is, we have stayed away from commenting much So construction chemicals and white cement and Walputi, the initial remarks you did indicate about Walputi expansion. So these are easy wins for the Company, GratSim has gone into paints. I think investors would love to hear specifically on construction chemicals wherein the company has a right to win. So any incremental color, targets, expansion plans would be very useful.
So I think you should reserve that question for the AGM and ask the Board Because I am discussing quarterly results, but that was in a lighter vein, Ritesh. Consistent Chemicals, we have started work, And we are building scale and there is a
lot of work but
it's too Small in the overall P and L and balance sheet of Ultratech. Maybe, Janshi can answer that.
Yes. No, What Atul said, I would like to just build upon. The construction chemical is, as you all know, it's a very specialized subject actually. So We started building up some skills about it, and we are looking for something if something we find interesting, then obviously, We will think about it. We are not at this stage to I would say we have not zeroed down anything.
We are just trying to build up our skill.
Okay. Is it possible to quantify how much will be the white cement in
Walgothi capacity post expansion?
We are at 0.6 right now. And what is the expansion?
Thank you. The next question is from the line of Girish Chaudhry from Spark Capital Advisors. Please go ahead.
Yes. Hi, good evening. Thanks for taking my question. A couple of questions. Firstly, in your earlier comments, you did indicate trade sales with 20%.
So similarly, what is the rural urban split? And if you could also guide us the volume mix from the urban real estate, if you have it handy.
Urban Real Estate, I don't have a split like that. And I'll just give you the rural I will give you the numbers definitely.
Sure, sure. Secondly, if you can also split the net debt between gross debt and cash.
One second, one second. So I'll just tell you, Rural sales were about 65% of our trade sales. 70% was trade sales.
Yes. Okay.
And what do you
think? Yes. My second question was the gross debt and cash and Our
INR 18,000 crores gross debt as of 30th June, INR 19,000 crores gross debt and INR 13,000 Crores of treasury. Sure.
Sure. Sir, I have one more last question.
Sure. Sure.
You did give a very good slide on the Ultratech Smart Factory, which talks about various initiatives using tech.
So if
you could sort of elaborate this more in terms of ramping This up across plans. And if this is already implemented at any specific plan, what are the benefits you're
I cannot disclose the plan at which it has already been implemented. There are various schemes which are under implementation At different levels and different things at different plants. I'll give you
Ahmad here, I would add what Atul said. Yes, because the digital, as you know, there are a number of areas where Our plant teams are working, and it are in the cement plant area, it is in the power plant area and the root delivery area. So the entire idea is how we can improve the reliability of our operations, how we can have Our operations with the minimized cost and reduce the variance, actually, if you are able to reduce the variance, obviously, the cost and reliability gets improved. So some pilot verticals succeeded and now we are moving forward across our package. So will this involve any sizable CapEx or?
No, it's not I would say very straight. It's not sizable CapEx. It's more of a sort of software sitting on our existing systems actually. So There is no much hardware gets involved in this. So for example,
a lot of artificial intelligence, IoT is being done. To give you one example, classic example, when the heat temperature varies in the kiln from one end to the other and the team is trying to Stabilizing it through the kiln, narrowing it, which reduces the overall heat consumption. And this is Being done through digital interventions.
Got it. Thank you. That was very useful.
Yes. Thank you. The next question is from the line of Navin Sadio from Middle East Financial Service, please.
Good evening, sir.
Can you hear me?
Yes, please. Great. Thank you for the opportunity and congratulations on a good set of numbers. So two questions.
One is, you said Your capacity utilization for
the quarter was about 73% and June was also around 74%.
Yes, yes, that's correct.
Okay. Which means April was much lower, yes. Okay. 73% and
The real impact of lockdown, shutdown, COVID wave 2 was in April.
Okay. My what I was trying to really understand is in July, as in since Q1 has already seen the impact of wave 2 and So is July are you seeing a sense of pent up demand? Or in general, are we operating at, Let's say the June utilization levels directionally or higher or lower than that, if you can give some color will help us understand.
July is all about rains. Then, Navin, July is all about rains. So July, you will expect a lower capacity utilization. It not be new to you guys because every July, the capacity utilization goes down.
Fair. I was just talking that in some regions, the monsoon seem to be a little delirious. I was just thinking, is there any pent up factor, So to say, in Bombay, you're getting happy
to report. We expect pent up demand to kick in big time, yes. I don't want to comment, as I mentioned earlier, I don't want to comment specifically on the month of July on what's happening on the 22nd July at 4 p. M. But there is a huge expectation of pent up demand coming back.
As monsoon recedes, you will start seeing Demand picking up.
Okay. My second question was on your fuel mix. So in the last call, you said pet coke has come down to almost about 28%. It's gone lower further. Yes.
So just wanted to understand what is the current fuel mix?
Yes. Coal is around 17%, 2%, 3% would be other and balance would be coal.
So in coal, I just wanted to understand if because Prices of both imported coal as well as petcoats have been going up on a landed kick off basis. I believe the Indian coal Turns out economically. So just trying to understand how much can it go? Then can Indian coal be 20%? It used to be 10% in FY 2021.
Just trying to understand where is that as a percentage in overall mix come after? Okay. I would respond to Nwari again. So Fundamentally, it's a function of your plant location actually because if you have your plants located in central And Eastern part of the country, obviously, you have linkage or you are near to the coal mine, so then you can get the local coal. But if you are looking at, as you know, in the West Coast, no way you can transport coal despite imported coal prices have gone up.
Number 2, there is also linkages of the coal with the now the limestone quality and so on. So that people Even if the coal prices go local coal prices go quite low, but switching over to the highest coal would be very difficult for So we and if we talk about Alcatec, we have planned in East Central, Northwest. So it's a combination of Fuel mix actually. So we have in our basket the indigenous coal, we have the imported coal plant located on the West Coast and the North part of the
country.
Naveen, the advantage of our diversity That we can use the most optimal fuel at a particular location.
Fair. So I'm just trying
to like request a number to be the last year. If Indian coal was 10%, will it be broadly there, Not likely to change or there can be some scope of 10% to 15% in
No, you can take a range of 10%, 20%. I also don't have a number, but I'm just guessing it will not go beyond that.
Understood. Fair point. Thank you. Thank you very much.
Thank you. The next question is from the line of Rajesh Ravi from HQC Securities. Please go ahead.
Yes. Hi, Chuck. Good evening. Congratulations on great set of numbers. My query is with regard to the fuel energy cost.
You mentioned during the call that our connection cost is up by almost 12% Q on Q. However, in the presentation that you shared, your energy Cost per ton is up around 5% Q on Q. So what is explaining that massive difference?
I'm sorry, I missed your question.
Sir, in the presentation that you shared, where the per ton cost, energy cost, Fuel energy cost? Yes. Is that by around 5% Q on Q?
Yes. And
during the call, you answered to one of the participants that your Fuel cost, convention cost for the fuel has increased from $109 to $126 Yes. Okay. So that is close to around 12% to 13%.
So, why you No, it's
a combination because That was Petco is
what we were talking about, yes.
Okay. So this is particular to Petco. You're saying that this cost is €109,000,000 to €123,000,000
That was Petco.
Okay. So my question, where I was coming in from is that because of Facebook and Core both have served Yes, over the last 6 months. So how is that impacting your captive power generation also? Are you seeing No, bump up in your electricity generation cost also?
No, not really because we are Taking FSA coal, which is regulated prices.
Okay. And sir, how much would be your captive consumption for electricity? Coal? No, no. Electricity, how much of it is captive?
So, 88% will be captive power.
Okay. 88% will be captive power. Most of the integrated plant, We have almost 80% 80% largest captive power.
Okay, okay. And there you're not seeing the largest Inflation that is largely coming up is in the kill fuel is where you are facing
the Correct. Okay.
And that
is why the blended number is much lower on a power and fuel cost together. Okay. Great. And so secondly, on the CapEx, you have mentioned that this year around 2,000,000 tonne would be commissioning, right? So of the total 19,000,000 tonne FY 2022, how much and which place The capacities are coming up?
In 'twenty two, we'll have 3,200,000 transcribing commission, Patna, Dhankoni and Bara.
Okay. Okay.
And the clinker also will be coming by end of March 2022.
I already have clinker. These are all grinding capacities? No,
no. Yes, these the Phase II where your Phase I have already All the
clinker will come by the end of 2023.
From GC, okay. So the Dalla in the UP, which was where the Of Google, sir, pending you received Stage 1?
The love will come by March 2022. March 'twenty two. Ali and Helmi by March 'twenty three. Okay.
Okay. Great, sir. That's all from my end. Thank you all the best.
Thank you. Thank you. The next question is from the line of Milind Sudesh Raghnevar From Santam, please go ahead.
Hello. Yes. Hi, Vinay. Hi, sir. Thanks for this opportunity.
So firstly, at the beginning of
the call, you just mentioned about
So the regional capacity utilization, I got about 50% in South And 70% is East. Can you please repeat the numbers for the other 3 regions?
South was 50, North was 75% around 75% East was 95% plus Central and West was 70% plus.
Thank you, sir. And the next thing is, sir, about the incentives part, how much of that should be built in the revenue number?
Roughly INR 80 to INR 90 a tonne
is or
INR 70 crores to be precise, sorry.
Okay. And sir, if I'm comparing the number of our bodies, In the Q1 of 2022, over the Q1 of FY 2020, That is June 2019 quarter. We are, I mean, still declining on that number despite the So how should we read?
No new capacity has been added From June 2019 to June 2021. So that is one that has been big ramped up right now. So no new capacity has got added on our overall base of 100 plus 1,000,000 tonnes. Looking at April, June 2019
and April, June
April, June 21, there's a marginal growth, not a decline. And what we are looking at is the potential the way we saw the pent up demand coming in And the new intra projects which are which
I was
particularly enumerated in my Opening remarks, we expect that the demand will continue to surge. So the cement consumption will keep on going up.
Okay. Okay. Yes, Yes.
So just to complete the loop, I don't think that there is stagnation and there's no point in comparing with April, June 2019 because
a lot of water has thrown at the break.
There are a lot of issues with COVID which have impacted demand. New vistas of demand have opened up. Urban Real Estate Tier 2 towns Has started picking up. Tier 1 has started picking up. Now we are just in the midst of monsoons.
You see October, December. Yes. Jawad, do you want to add?
Yes. Just to end up on what Atul said, I would say it's good to note that there is a marginal increase in The overall numbers in terms of demand, despite the severe environment of COVID actually in In this particular quarter actually, we are as we all know, there were lockdown number of lockdown across the country and Similar to that was too high actually. So that's the positive side that there is a good opportunity for Growth going forward, actually. I would read this way.
Okay. And Atul sir, lastly, our Overall capacity utilization for the quarter was 74%. Is that what I heard correctly? 73%. And for June, it was 74,000,000 for June of the month.
Yes.
So that means our loss In the 1st 2 months or not that significant, is that the way to look at it?
Yes, May was pretty bad. April had started declining.
Okay. Okay, great. That's it for my question. Thank you. Thank you.
Thank you. The next question is from the line of Prateek Kumar from Amtech Stock Broking. Please go ahead.
Hello. Yes, good evening, sir. My first On the Century plant profitability, so while we have now to like 600 EBITDA per tonne, So the centuries where we used to target 900 orders, that would have been also exceeded that number now.
No, it's
probably across the INR 1,000 mark there also.
And regarding your fuel cost, is it possible to give away like sort of average fuel cost including coal Coal and Petco combined for this quarter versus last quarter?
Just one second. If team has it, I'll give it to you. You guys should do it. I'll get it communicated with you separately.
Okay. And particularly last quarter results, PPT of yours said that imported coal consumption at that time was
Pratik, I'll give you a backup to you separately.
Sure. And is it possible to quantify like how much Another INR 100, INR 150 tuning station we can build on or is it too early to print?
$1,000,000 question. I also don't have the answer for that.
Sure, sir.
I'll get back to the question. Yes.
Thank you. The next question is from the line of Sanjay Gandhi from Ratnavalli Investments. Please go ahead. The next question is from the line of Ronald from Sherkhan. Please go ahead.
It's dropped off.
Hello?
Yes.
Hello. Yes, am I audible, sir?
Yes, please.
Yes. Yes, I just I had one query regarding your material costs. Like you believe during this Quarter, you had changes in inventory, which if I see that including raw material and purchase of finished stocks, It had completely absorbed the rising power and fuel and freight cost rise. So and this phenomenon has also been there in Yes, Safi, CP and Mangalam. What we are seeing that raw material cost together on aggregate has led to outperformance on EBITDA per turn, Which we should expect also.
And if this can be explained like what is this thing like is it gains in the inventory and this kind of We don't have not yet repeated over the next coming quarters.
I haven't followed your question. So one is if I look at my raw material cost, which has gone up from INR 4.70 a tonne to INR 5.10 a tonne, A large impact is felt because of diesel. Huge amount of consumption in the mining operations movement, internal movements. That is what drives cost otherwise. And the second one is fly ash contracts.
Fly ash It's very opportunistic. The power plants also keep on changing prices depending upon demand supply situation. Both of these are Not in control.
Sir, I am referring to the negative 290 odd color, the changes in inventory of finished goods, which was reported
is because of increase in inventory in this year. Yes.
So this
Last year, it was a decrease in inventory.
Yes. So this has bring down the overall cost of this, if I include raw materials and purchase of stock into. So this frees up around 200 per ton in profitability?
This is the increase decrease of finished product And what is progress for your inventory?
And this figure won't be repeated in coming quarters, right?
It will change. It will change. It can go up or down. This element of the P and L is always there.
Yes, yes. That's true, sir. Okay, sir. I'll understand it later. Thank you very much, sir.
Thank you. The next question is from the line of Roshan Poinikar from GM Financial Services. Please go ahead.
Yes. Hi, sir. Thank you for the opportunity. Sir, in your presentation, given that the proportion of green energy in our portfolio is at 60% right?
Yes. Are there any internal targets?
And I mean is there a cap up to which it can go up to? We are now looking at going up to 34% of our existing capacities with the Green Power. That should get commissioned get completed by 2023, FY 'twenty four latest, yes.
Okay. So this includes the WHR capacity?
Yes. WHR and solar, these are the 2 main sales. All right. And the next question is on the lead
distance, sir. What would it
have been in this quarter? Lead distance, I believe, would have been higher around 430 or kilometers. 4:30.
4:30 2 kilometers.
Okay, okay, okay.
That's it from my side. Thank you, sir. Thank you.
Thank you. Ladies and gentlemen, we'll take the last question from the line of Bhavan Cherra from Manheim Holdings. Please go ahead.
Yes, good afternoon, sir. Thanks for taking the question and excellent set of numbers.
So two questions. One was what EBITDA numbers. EBITDA numbers.
I don't I'm not able to calculate EBITDA separately.
Okay. You should give a combined number of non cement In the earlier quarter, so if we can, it normally is between 150, 160, 160.
No, no, nothing like that. Okay. Sir, what was the industry growth number in the quarter 1? If you can share that number and any update on the If the results get declared, we will know. Only this is a second or third company declaring results.
3rd company, right? Okay. Thank you, sir.
Thank you. Thank you. The next question is from the line of Kamnesh Baghmar from Pravadash Nilagar. Please go ahead.
Yes. Thanks for the opportunity. So one question on the part of Divestment of overseas operations, like, say, that fiber asset which we got through the acquisition of Binani Cement. So any update on that?
Working on it, I'm hopeful to conclude it by this in this financial We are now at least have multiple dialogues going on. There are interests being generated. So the confidence level is very high that by end of March 'twenty two, we should be rid of all these pending issues.
Okay. I'm sorry. Second question on this margin. So you mentioned in your opening remarks that We are very confident that margins could improve from current levels of around INR 1600 per 100, which we did in this quarter. So, given the fact that there is significant pressure on the cost side and secondly, like The way the volumes are coming up and the capacities are also coming up in the system.
So what drives this particular confidence on the margin?
Firstly, costs going up, they will not keep on moving in one single direction. I'll again harp on the point that there's No off take of pet coke at $150 So it's not naturally going to correct. 2nd point is new capacity is coming up. It need time to stabilize, time to mature, time to establish in the marketplace. 3rd one is from Malteq's point of view, We ourselves will begin close to 15,000,000 tonnes of capacity in the next fiscal year.
I can already say lots of plants are already oversold, as in we have our order book building up whereby We will have our utilizations going up in those acquisitions in those new capacities as well. Next point to add here is the brand itself. Ultratech is one of the best brands of cement. It's any major project, whether it is a house or infra, Ultratech is there. And the way India is growing, there's no reason why Ultratech will not grow.
Clearly, overhead absorption is where the incremental capacity utilization will help absorb overhead At a much faster pace, the operating leverage keeps on improving, thus helping me improve my margins further.
Okay. Got it, sir. Thanks a lot.
Thank you so much.
Thank you very much. Ladies and gentlemen, on behalf of Ultratech Cement, that concludes this conference. Thank you for joining us. You may now disconnect your lines.