Ladies and gentlemen, good day, and welcome to the AltraTech Limited Q4 FY twenty earnings conference call. We must remind you that the discussion on today's call will include certain forward looking statements and must be in conjunction with the risk that the company faces. The company assumes no responsibility to publicly amend, modify, or revise any forward looking statements on the basis of any subsequent development, information, or events or otherwise. As a reminder, all participants will be in the listen only more than every day an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference, please signal an operator by pressing 008 at 404.
Please note that this conference is being recorded. I would now like to hand the conference over to mister Atul Daga, executive director and CFO of the company. Thank you and over to you, mister Dada.
Thank you so much, Ramesh. Good evening, ladies and gentlemen, and welcome to this call to discuss our results for q four FY twenty. First and foremost, we apologize for the delay in announcing our results, which in normal circumstances should have gone down in the April 13. The delay is all due to COVID, which created obstacles for completing the statutory audit. And then we are absolutely now guiding corporate solutions.
So we have completed the audit all all kinds of physical verification with various ways and means to the satisfaction of such as the auditors, and that's why we're delaying the results. This quarter is not a representative quarterly benchmark We or the industry or the economy saw a heightened pullback across all trends in the month of March due to the ongoing pandemic. Businesses started slowing down region by region, I believe, since late February, when things came to a grinding halt in towards the March. It was worthwhile to mention that we have been seeing improving demand sentiments in Jan over the previous month and in Feb over and Feb over the end Jan.
That's the positive part. And we would say, a business that makes nothing but money is a poor business. Let me talk about first what we have been doing besides cement, especially in times of this pandemic. During the current quarter, we have almost committed 75 crores helping our country fight the pandemic. We are helping the authorities by arranging PPEs, n 95 marks, surgical exams, etcetera.
At the local level across our plant locations, food packets, sanitizers, soaps, bleaching powder, disinfectants, etcetera, are being distributed to the needy people around in in and around the villages surrounding our plant locations. We are arranging proactive awareness to programs among the local communities. We have also added two quarantine centers with a facility of 30 beds in the state of Madhya Pradesh and Rajasthan. In the last count of two ten, more than half a million people have benefited by the company efforts. Let me now talk about the operations and firstly, must tell you about our plan during COVID.
We started off this year with enough, inventories. By the end of third week of April, we received approvals to start manufacturing activities at all the plants as well as approvals to dispatch in it. Both these approvals are independent of each other. Dispatches have continuously been going up, and all the plants are continuing to sell dispatch and sales in it. Sales have been employed.
Clinical fees for the grinding unit is also stabilizing. To your information, I'll just check out the network of 22 operational integrated plants, 22 grinding units, and six bulk terminals. We are dispatching cement from almost all the locations, barring one or two where there might be a situation, but 52 locations are today dispatching cement. We have a unique advantage of being able to cater the demand in different parts of the country. The question is, where is this demand coming from?
The larger part of demand is from the retail market to video markets, where we believe that the pending work is being completed three months. Some of the infrastructure projects have commenced construction activities. And with this demand surge, few of the plants are already operating at 70% capacity, few of the plants. In the urban real estate markets, we understand that large organized real estate players have accommodated labor on their sites and can commence work and have started work, whenever there is an improvement. However, as everybody knows, there has been and there will be a difference of labor from the city websites at the earliest available opportunity.
And this could lead to a potential slowdown in construction activity land demand during the next two, three months. This otherwise also will be a lean to you. If I mean few of the infrastructure projects where the work commenced, almost all major national highway projects like Sanjabi Expressway, Delhi, Beretta, Bodhuzera, Greenpills Corridor, either can't do, Chadhaan project, Mumbai Doha, Expressway, metro networks across various cities, modernization of Bangalore Airport, DFC, A lot of female work is going on in Muddy Pradesh. Government authorities, I believe, are monitoring the project progress, social distancing, and other aspects with respect to COVID. We move into cameras at these product sites, and this is what progress with payments have been released promptly to the contractors.
The idea is to expedite completion of completing work before months. Let me now talk about debt on our balance sheet. Our net debt at the end of fiscal twenty is 15,096 crores. Nearly 60 of our loans are available rate loans, which is helping us get the advantage of the reducing interest rate regime. Our gross debt is about 18,280 plus.
With a prejudice that was up five eight eighty four starting ended the fiscal year twenty. All our treasury purposes deployed in triple a liquid debt schemes. For your information, in the recent debt to back up by Frank Franklin, Hamilton, the IFS, the HFL, we had zero exposure. All our treasury operations generated positive carry compared to the borrowing costs. And these these numbers are available at any point in time should there be a need for the business.
During the year, we have reduced our net debt by about more than 5,000 crores for India. Happy to share with you that we have achieved a net debt to EBITDA ratio of 1.55 x on our India balance sheet for the trailing twelve months as compared to 2.64 x March 19. ROE for the company has improved to 10% from 7% last year. I must remind you that 10% while 10% does not, sound a very nice number, but we have invested in excess of 36,000 crores in the last few years. Two benefit of which have not yet been realized.
Over the next few years, the appreciation and improvement in operations and realization of, cash flows from the, non core assets will only improve the ROE for future. And having cash is the biggest motor for us this year. Having a negative working capital cycle has been the key. Our net operating working capital, I I am differentiating this, operating working capital, which is pure inventories and receivables and payables stood at a negative of 700 plus. Our suppliers both domestic and international continue to partner with us, extending credit, definitely realize the benefits of long term relationships with Arduckeq, and we are equally committed to all our business partners.
Luckily, input costs have also been low on account of Core and Petco, And we are carrying sufficient inventories, across all our plants to meet the production requirements. Having said this, let me now quickly touch upon our CapEx plans. We had started planning big CapEx plans. 3,200,000.0 and the expansion had also been announced which would require cash during this financial year. However, due to COVID, we have restricted our CapEx plans to an amount of around rupees thousand plus.
We have slowed down the work on the 2,200,000 ton in cutter grinding unit. This was scheduled for commissioning in March 21. This project will now get pushed to the next financial year depending on when we are actually able to start work. Down to capacity expansion work at West West Bengal in at the West Bengal in the Bihar dining unit is almost coming to a printer and close and should get commissioned by March 21. The Champloo coal block will also get commissioned by March 21 as most of the work is over.
The coal supplies from this will meet the requirements of Mayer plant and empty. We have restricted the work on new WHRS plants for the moment. However, the last one to get completed will be WHRS at Madhurra plant within this financial year. At the end of it, we will have one forty five megawatts of WHRS power, about 12 and a half percent of our total power requirements. There are no other media CapExes which are being undertaken as in new WHRS or any major modern modernization projects or maintenance CapEx and other routine ongoing CapEx which I just spoke about would consume about 7,000 cost.
Fixed cost cannot be left out of the purview. We, as a business team, have looked at our business continuity plans and taken various initiatives to reduce overheads during the current financial year. We have targeted reduction of around 10% of our overheads during '21 as compared to f y twenty two. Let me share the work done on sensory assets. We're happy to inform you that the assets were operating at more than 80%.
It is at 83% for this quarter in spite of the COVID impact. I guess if we were operating full steam, we would have been operating at 90% plus for some of the Nearly 65% of the bank conversion has already been completed as compared to 55% in the last quarter. Supplies in Western North markets from these plants are 100% of the decline. This has resulted in increasing realizations for these for the Century plants by about one fifty per ton over the last quarter. Cost improvement programs have also been at play and we have reduced cost by about 200 rupees per ton.
There might be a small delay in, rebranding program because of COVID, which we wanted to complete by June, June 20, might get pushed depending upon how the markets open up. During this quarter, I must mention that we have accounted for one time improvement cost of 32. I told you all about it last quarter also. All the one time cost with this have got over, and now the operations should be on stream at par with our other plants. Talking about q four twenty, cement prices remain strong in the middle of the country.
And in fact, we saw some increases in North, Central and Western markets. At an all India level, the company saw an increase of about 2% in realizations over q three, but exit prices have been higher than the quarter average. Costs remain under control with reduced fuel prices. Petco consumption for this quarter was at an average of $70, $10 lower than the consumption rate of Q3. The purchase prices of Petco, that's a high of 78, but now are hovering around $60.
I guess the benefit of these purchases will be visible in second quarter towards the end of second quarter, this financial year. These prices have been at a historical low, but all of us know that the benefit of these prices has not been passed on yet, to the industry. The company has achieved an operating EBITDA of $11.46 as compared to thousand, for last quarter, which is about 1414% improvement despite the slowdown in the month of, March 20. For the full year, I'm happy to share that we have achieved an EBITDA per ton of one one five four, eleven fifty four per ton. This is a very unique feat because of it being an average across the country.
We all know how the prices and operating margins performed in different parts of the country. $11.54 per ton for the year is the highest so far in last several years. In fact, since inception, since 02/2004, this is the highest, and I think there is lot more to come. One more point, there are so many, you know, adjustments which have to be done to the accounts. One more point I should tell you about accounting standards on leasing.
Interest cost was higher because of an additional non cash impact of 48 crores as required by accounting standards this in this quarter. Otherwise, our profits would have been, to that extent, higher. Thank you, ladies and gentlemen, for patiently listening to me. And I must conclude by saying, when the going gets tough, the tough get going. That's all I did for you.
Thank you.
Thank you. We will now begin the question answer session. Anyone who wishes to ask a question, press star and one on the telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question.
We
or we would have underperformed the industry demand? Being Pan India, I think this should be this is an industry norm, I would say. And you will not see this number, this kind of a number anywhere else. The other challenge that you might see is entering numbers of last quarter have been added to our volumes as is where we do not have any role to play. Sure.
So on the last call, your life for life, what would have been the work? That correct? I'm sorry? So on a like for like basis, if I take out century, then the volume decline would have been slightly lower than that. Is that a fair understanding?
Slightly lower. Yeah. Yeah. Updated a percentage only. Not not too too different, but a percentage also.
Sure. Thanks. That's helpful. The second question, like, mentioned you have delayed your CapEx plan. Given the kind of volume or demand destruction that you could see, do you think the industry will now have a much lower capacity additions scheduled over the next two years than what was earlier in research?
I I think so. Any prudent balance sheet management and financial planning we want to really look at business plans. Sure. Thank you. That's all coming.
I can't comment about how I was thinking. So that's my view.
Sure. Thank you. We take the next question from the line of from. Please go ahead. Yeah.
Hi, sir. Thanks for taking my questions. Two questions. Firstly, on the century, really good to see the ramp up coming through. Now if you could just talk about the EBITDA per ton, is it somewhere in the range of $6.50, 700?
Is that assessment correct?
This quarter, I I mean, if I were to exclude the one time calls, then we will be somewhere around $5.75.
Okay. $5.75. And now if I look at the next couple of quarters with the cost It will do one. The brand shift. Yeah.
So what I mean, just keeping the pricing flattish, what is the kind of improvement we can see from the brand transition and the the cost levers which are still there? It should go up to 8.
Difficult to give a number, but anywhere between 800 and 900.
Okay. Got it. And the second question I had was on this deal everything now. Good to see the reduction coming through consecutively for the last couple of quarters. Now how should we think about the target in mind from your perspective?
I do understand there's a focus, but is it you know, do we have some some number in mind that, you know, we're we are looking to bring down the debt to this this level. And in the same backdrop, given where we are in the market right now, there could be possibilities of some stress assets. I don't know. I'm not sure if anything comes up. What is our thought process in terms of balancing m and a versus the balance you know, deleveraging that we are pursuing right now?
As of now, we are not looking we are we can't convert in cash. However, I don't rule out the possibility as something attractive to them. We will examine it. I already mentioned earlier that our target is to go to one x net debt to EBITDA, and then maintain the balance sheet at that level. It would be possible because the cash flows from this large operation.
As you saw, we we knocked off nearly 5,000 crores of debt in one single year where CapEx was not only CapEx. I think we spent 1,500 or 1,700 crores on CapEx. So we should be aiming towards net debt EBITDA of one x. That's number one.
At the consumer level. In your group.
Add a add a consumer level. Yes. Keeping our eyes and ears open for any opportunity that comes by. But we are we are I told you in the past also that we are very well prepared for organic expansion and should should the situation arise, should the demand be there? This quarter, we had a capacity utilization
There is enough headroom that we have in individual markets for, you know, servicing the market should there be a demand. So plenty of headroom to think.
Okay. And just one clarification. In your initial comments, you'd mentioned that your plans are ramping up. If you and I I'm not sure if you mentioned a number where the dispatcher's levels are versus the pre COVID pre COVID, you know, what we were seeing in Feb. If you can just talk about that.
Oh, so we have not reached the same levels. I I just said, if I were to look at last few days, which is not the correct way to look at it because, ultimately, average full quarter is what matters. We are already reaching around 65, 70% capacity utilization in the last few days. We started off April or April 2 with a zero. And gradually, a wrap up has been taking place.
So we are almost almost there. If I were to look at, some plant in fact, in each, we are running full capacity right now. So, it's a mixed bag. Things are going on well. Personally, I don't think that it will last too long.
Monsoons will be there. COVID, there's still no sign of COVID going up. Migrant labor problem continues to be there. So this might slow down. Keeping fingers crossed crossing each day living each day as of now.
Sure. Thank you so much. I'll join back with you.
Thanks. Hello? Manish? What happened? No.
You are you calling the operator? She's connecting right, sir. Okay.
I'm sorry, sir. I'm back. We take the next question. It's from the line of Ritesh from Investecap. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity.
Sir, my first question is on the distribution side. Sir, given one in every four banks is UncleTech in India. Now this is a challenge, and it's also a blessing. Sir, I wanted to understand how different is our distribution strategy as compared to its peers, basically, when it comes to last mile connectivity. Anything specifically on having where I'm in each district, which probably is a blessing for us.
Can you still give some color here on road, rail mix? You can drill a bit down into how we look at our distribution strategy? Thank you. Right now, the road rail mix road would be about 70%. 27% would be rail at 3% ocean route.
Our distribution strategy during these times, with the dedicated fleet that we have, we have transporters who deploy their trucks exclusively for Algertec. I think the last number I remember, I think 53% of our fleet was dedicated fleet. So that is where the biggest advantage which architect would have to manage distribution in these COVID times. I think that's what you were asking calling about. Correct.
So this is one thing. Actually, sir, when we look around the distribution, we typically talk about silos and warehouses. Sir, how if you can quantify the numbers, basically, over here, it can be quite useful. So this is very useful. 53% of fleet.
That's that's very useful. But for something on the warehouses go down, which enhances our last mile connectivity given the the business of finding labor and prep. So, you know, there is a concept of temporary warehouse which can be higher depending upon market requirement. That is what is at play right now, and we would we have, at any point in time 900 to thousand distribution points at play. I am not updated today as of how many are shut down because they might be near a red zone, but in a good nominal situation, thousand odd distribution points, SLOCs are available.
Okay. This is helpful. Sir, my second question is specifically on the mining regulation. Okay. You're taking your third question.
Noted. Noted, sir. Yeah. Sorry. Go ahead.
Yeah. Sir, I wanted to know what quantum of our resources is currently placed under saved leases. The reason I'm asking is there can be some activation which can come around this. So I just wanted to understand if you can quantify what is our river basket and how do we look at it in our PPL and ML. I'm trying to understand the incremental You're in you're speaking in Greek and Latin for me.
I don't know what your your question is. Sir, I'm asking what the recognizance permits that we have at Ultra Tech Club. I'm trying to understand the incremental What permit? What sorry. What permit, ma'am?
RP. What permit? RP. So probably I'll I'll I'll call you after the call for this this particular question.
Well, ladies and gentlemen, requesting you all to please stay connected. We've just lost the line for the management. Requesting you all to please stay connected. We are just trying to reconnect the management back to the conference. Requesting you all to please stay online.
Thank you. Aditi, please just log the line for this manager requesting you all to please stay connected. We are just trying to reconnect them back to the call. Thank you. Ladies and gentlemen, thank you for patiently holding the line.
We have the management reconnected on call. We also have we also take the next question from the line of Rachi Chopra from Citigroup. Please go ahead. Thank you. Can you hear me?
Yes, Rachi.
So I believe, okay, I wanted to check this. You know, you mentioned that so one is, of course, your volumes were down around 16% for the quarter. And is there any any reason which has a more extreme variation, one? And second is that you said that 65 to your plants are operating at 65 to 70%. Again, regionally, is there anything which is, you know, disconnected in the 65, like, is the South also around that level or the South lower income of the region higher?
What is the plan currently do?
First question on the first question on 16%, let me see if I can give you some color around that. But on the second question, right, you know, it's more current. East is operating at much higher capacity. Eastern, some plants in Central are operating at much higher capacity. West is the lowest today because that is the most impacted region in terms of COVID, whether it is Ahmedabad and surrounding markets, Mumbai and the surrounding markets where you know, the impact is higher.
So, you know, if you were to look at, then North is doing well, East is doing very well, West is the weakest today, and South is doing South is coming up. Telangana, Andhra, Tamil Nadu. Almost an entire South impact. Karnataka. Yeah.
We are all aware. Karnataka has in fact now started almost all the activities. And talking about last quarter, if I were to look at our capacity utilization, I think this was again rocking at ninety five ninety five to 100%. Central was weak was the weakest would be would have been operating below 60%, and all other regions were 65 to 80%.
Okay. So central was weak or central is picking up now, you're saying?
Central is now picking up. Yes.
Okay. Okay. Then the second thing I wanted to check was so Okay. Firstly, on the realization, I wanted to check that how much of this would be rebranding? I mean, say, about 100 rupees would be rebranding.
I mean, there is a maximum reason. Yeah.
Yeah. No. I don't have a breakup. You know, West, for example, West markets and South markets, we are 100% branded to Algertec. East as we have already pension, in fact, is not branded.
And pension is the weakest in prices current not pension. I would say Chatti, but as a market, is the weakest in prices on an all India basis. And I don't have an answer how much is due to rebranding and how much is due to, you know, natural price increases. Natural price increases, Surrogate, if I were to use, I we on an all India basis, we saw 2% increase in prices over the last quarter. So there'll be a small component of natural price increases, maximum benefit of rebranding.
That's just a surrogate which I could use to explain.
Okay. Got it. And in and for the cost side, you mentioned variable costs are down again. I'm sure part of it is due to the Petco prices benefit kicking in, and part of it is into efficiency parameters. So going forward, again, how much benefit can one assume on the cost side on efficiency for instance?
I know you mentioned the EBITDA can be Yeah. By so let me give it another way. We are we have used a normative EBITDA per ton of $5.75. It's usually a onetime cost. This $5.75 will go up anywhere between 800 to 900.
So let me be conservative. Let's say the first target is to attach 800 rupees a ton. That's where the gain lies. 65% of the produce of Century assets has been branded architect. Our target excluding the Chattingar plant, because Chattingar plant will not be rebranded.
So 84 or 85% of the total produce from Century plans will be architect. So there is room for price advantage in Century assets. So I guess large benefit will come from pricing. We are implementing we will take on implementation of WHRS. Now I think WHRS has locations, which will give cost improvement, but that is, I think, phase two now.
The immediate one will come from pricing performance. And to help you analyze it, Chathisa since we are not doing it, all of the plants are in high price zones. We give us the bulk of the benefits. So from $5.75 to 800 to 7 $2.25, bulk of the gain will come from prices. Petco consumption has been 68, 69%, you know, in a in a mix of all plants.
It can go up to 75% that have been that or 80%. Is that over a period of time? We might not have too much of juice left over there.
Got it. Okay. And what were the trade volumes percentage during the quarter and for the full year?
Trade volume? Trade percentage is what I will try. Yeah. Yeah. Yeah.
So blended, we are at about 68% for this quarter. And interestingly, you know, I must share with you all of you that during post COVID, all these ratios, blended of 68% or trade of 68%, looks so ridiculous because now these are ratios of these 90%. Maximum sale is happening in the trade market.
So currently, you're saying trade is around 90. And what was
the last year for you on the fourth quarter? Sixty and fifty nine percent, Minish.
Sorry. Can you say that?
Minish, you have the exact number? 66%, actually. 66%. Yeah.
66 is for the full year?
This is for quarter. For the quarter.
For the quarter. Okay. And just one we'll keep in question. If we can just get the revenue breakdown for RMC and white cement and put the the white cement
RMC was about RMC was about 555 crores. White cement was 421 crores.
Okay. And you have a white
cement Sorry. What did you want?
White cement and 41 crores.
About lakh R20,000. 3 lakh 20,000, you said? Yeah. Yeah.
Okay. Sorry. Just one last question. Bara, the remaining 2,000,000 is still on track?
Yes. Also, no. On track? No. I I was using a quarter delay for this because of COVID.
But June earlier, we would have expected it in April
June.
It could get pushed to July, September period.
Got it. Okay. Thank you. That's it, Shun. Thank you.
And and since you asked about Bara before the next question, let me also tell the audience about the the last report, the NGT Walla plant. I think the the approvals are moving on track, and we should be seeing light of day for that plant by March 21. Next question, please.
Thank you. Next question is from the line of Somal Mehta from BNP Capital. Please go ahead.
Sir, over a period of time, is it fair to assume that the EBITDA difference, what you said, Century versus the blended, which is about 300 assuming Century goes to 900, that will remain partly because of Chattelsgar unit and some bit of regional mix or that gap can narrow further, the cost efficiency, at least some of them, I'm assuming, would be pending? So so it will be regional dynamic. So, you know, if I have achieved, let's say, for full year November, Chenji obviously will not achieve November. It will perform according to its needs. Sure.
So to that extent, almost thirty, say, thirty years has given one and a half, two years down the line as soon the utilizations are at optimal levels. You will continue to see at least that $202.50 rupees per ton of cap. That's your fair assumption. Right? From a on India average?
Yes. No. They it could shrink because we will be investing behind improvement in this entry branch, which has already been done in other branch. So that could give for example, WSRS has to be done across all locations. Okay.
It's investment of, you know, like, 300 crores between Mahir and Manningar. So there will be there's a gap which could reduce over a longer period of time, not in this financial year. Okay. Okay. And second, for the quarter, what was the lead distance and how it has changed q on q?
Because on a part time basis, the freight cost actually has moved up. So just wanted to check. Yes. The lead has lead has gone up because we've been crisscrossing a flow across the country. I think we were around four forty.
Sorry, we were around four forty kilometers, that's what I remember. Okay. And my last question is when you said that the best market seems to have been more impacted, so is it April and May onwards or you saw that impact even in the q four numbers? Was post was talking COVID. Okay.
So because that we are seeing the stuff that that we are seeing today, for example, Eastern markets. As I mentioned, plants are operating at 90%, which is back to normal, near to normal. West has not come back. West, all the cities are more impacted than any other state. We haven't been able to get control of COVID.
Sure. And last question is what could be the possibility of a pent up in the non trade demand? Because as you said, the trade mix has gone up significantly. So once assuming government spending starts in second half of this fiscal year, again, that's the hope. Do you see a lot of things that they want coming in?
It could. It could. Then I won't have capacity. Okay. Yeah.
Okay. Perfect. Perfect. That's very encouraging. Yeah.
Thank you very much, and all the best.
Thank you. We'll take the next question from the line of Raveet Ramakrishnan from CFC Group. Please go ahead.
Hi, mister. Excellent performance. I just have one question. With such weakness in demand and cash flow streams which you see across the economy, we expected excellent improvement in working capital cycle to be distorted either in terms of buildup of some amount of inventory or in terms of needing to give more receivables, period from your customers? Thanks.
My receivables are at the lowest at, as we speak. Inventory, buildup could happen because today, we plan on a particular trajectory of performance performance of the fund and the long lead item which is called tech code is procured. And word for that is if demand collapses, then we will have higher inventory to carry. Otherwise, we intend to work with a negative working cap. Thank you.
Thank you. We take the next question from the line of Swadhita Bhush from Franklin. Please go ahead.
Yeah. Thanks. So for the fourth quarter, for, what was the utilization?
About 57%.
Okay. And the profitability for the quarter?
No. Hang on. Hang on. Hang on. No.
Just hang on, Shwadhati. For UltraTech, you you guys should not look at Najwara's capacity utilization stand alone because we need we need to pull all our capacity and then the distribution is managed. Just because Najwara capacity utilization is low does not reflect does not say that it is a poor performing asset. It's an optimize optimization of the overall capacities within the network. Yeah.
Yeah. That's right. I understand that. Yes. And profitability for the quarter from IBM?
Oh, yeah. It's eye popping. $1,600 plus.
Okay. But in the slide, in the earlier quarter slide, you generally have mentioned that 1,500 kind of number. Now this quarter slide, you have mentioned for the full year, it's $12.50. All it said exceeds $12.50, but that kind of different indication that the fourth quarter number is lower, but that is not the case.
No. No. Nilesh, will you explain what was the $12.50?
$12.50 is more of operating EBITDA.
Hello? Right. Yeah. We were asking about profit EBITDA only. So we have this quarter at least about 1,600 rupees per ton on a average basis.
I don't know why. Okay. Maybe because of the first couple of quarters where we might have had a lower performance. That's why we have reduced our So this quarter, operating is about somewhere $14.90. Okay.
1,400. And, sir, one other question. Do you
see going forward in the medium term, lead distance to be slightly higher because of how maybe chunky demand centers can get?
Yes. It could be higher in the short term. So from that manage distribution to not to lose our customer. Wherever we can supply from, we will do that. Okay.
Okay. Okay. And sorry. One last question on
the Petco prices. Did you say that the benefits of the current spot prices can come in from second quarter
of this financial year? Yeah. Yeah. Yeah. Yeah.
Yeah. In July, September 2 and yes. July, December. Okay. Thank you.
Thanks a lot.
Thank you. Our next question is from the line of Nitin Arora from Axis Mutual Fund. Please go ahead.
Hi, Nitin. Good evening. Sorry, I missed your opening remarks. Just one question. You have delivered a net debt closer to what you guided.
Any sense in direction for this year given the constraints of, you know, direction in volumes depending on what the situation pans out on the COVID post COVID level? Any direction can you give on that? It can very difficult to give any guidance on how things will pan out. Nobody knows whether there could be phase two, and being extremely pessimistic. Whether there could be phase two or phase three or or how fast the recovery is.
How soon the economy opens. It's a million dollar question. So I I'm not able to give you a clear answer. Sure, sir. Thank you so much.
Thank you. Thank you.
Next question is from the line of Pulski Patni from Goldman Sachs. Please go ahead.
So thanks a lot for taking my question. So my first question is, again, on demand, but not the near term demand. What I'm trying to understand is that once we come out of COVID, clearly, the government's fiscal numbers are not going to look very good. And that's why the fact that you mentioned that there's been a significant surge in trade percentage recently. What I'm trying to understand is what is giving you confidence that even over a twelve, eighteen month period, volumes could likely come back to what we've seen in the past?
That would be my question number one.
All along, Pulkit, in the last two years or three years, Vivo and Ultra has been driving growth. Price, you are right. Government will have fiscal pressures. I don't know where they'll bring the money from, but there are lots of avenues, you know, we can discuss offline, which the government could tap into. The other sector, which is more promising remains to be rural markets.
Now they are not dependent on MSP alone. The average prices have actually gone up on the revenues. Both the crops, the winter crop, the summer crop have been good, which improve the cash flows in the rural markets, pumping up a rural demand. If and So unfortunately, India is so so tough on spec and so much dependent on the vagaries of weather. If crops remain good again for a longer period of time, we would see rural demand continue to surge.
Government spending, I don't know how they are managing, but we are seeing good amount of demand or consumption pickup. I'm talking about post COVID. I'm not I shouldn't say post COVID, but April onwards, whatever you want to call it. Mhmm. There were possible, the government has started work on its existing infrastructure projects.
Today, we step out if you want to step out on Mumbai roads, you will see the metro work has started. So government is having some thought process on expediting infrastructure. And all those commitments which were made when in the last budget and subsequently also millions of dollars being millions of dollars being committed for infrastructure in spite of these dark sky moving over the economy, I'm sure there will be some mechanism that they are thinking about.
So we are all hoping that government has some money to spend on this. My second question is, assuming that there are constraints in government spending, you did talk about 10% reduction in discretionary spend that we could do. Any specific heads that you could highlight where this fixed cost reduction could come through?
So we put a manpower fees. That is one. Second, you know, with ad spend will go down, yeah, which was a big bucket of cost. Third is the declining costs at plants will go down because plants have been in shut for, let's say, a month or so. This means extension applied on the plants.
So plant maintenance costs without compromising on the quality of the plant at all. Checkdowns which hit a cement company will go down, will reduce. Travel expenses, all admin related stuff will, you know, go down. That's the plan that we have. These are the high big ticket items, manpower cost, maintenance spends, ad spends, admin related culture will see reduction.
K. One one more question, very basic. For a a normal cement plant, at what percentage capacity utilization does it breakeven?
Depends upon the profitability of that particular plant or that particular company because, you know, every company has a different level of efficiency, but I would take it anywhere between 3040% where it's a breakeven capacity. Sure. That's very helpful. Thank you.
Thank you. Next question is from the line of Amit Murarka from Motilat Insight. Please go ahead.
Hi. Good afternoon, sir. Good evening, sir. Hello. So so on one moment, the current situation that I mean, active under the market, the industrial utilization clearly is
sir. But your No. No. Not audible. So your audio is breaking up.
If you can hear us, you may please dial back and Is
it is it better now?
Yes. Yes. Now it's better. Thank you.
Yeah. Yeah. So I was saying that while while the on the nameplate basis, the capacity utilizations are at 40 to 50%, but there are supply constraints as well, like labor availability or logistics and others. So, like, once you see, let's just forget about demand right now, in the current scheme of things, how what could be the, I mean, the utilization level with the plants you think given these constraints around the the factors of production? As I said, today, are operating anywhere between 6570%.
But could it go to, like, a higher number if there was no demand constraint?
Yeah. Why not? If there was
no sorry. If there was no demand constraint as of today, I don't have any challenge across the network? No. There's no challenge. So if it's required, we can decrease that.
Okay. And also how with that one lining unit, which has been kept shut because of demand not being there, that is near Delhi. Yeah. So Delhi is an any case shutdown area, and we have a dining unit close by. One of the dining units has been has not been started.
That's demanded. Understood. And on the cost side, I believe, those logistics costs have also moved up, particularly the road logistics. And similarly, I'm not sure how would be the raw material availability of pricing beyond fly ash and other things. So could you comment a bit on the on those factors, the variable cost side?
So fly ash costs, in any case, quarter raw material costs went up this quarter, largely driven by fly ash. Fly ash availability is not a problem because power plants in the country are not shutting down. Transportation of fly ash could become a problem at some point in time. Today, it is not a problem. Other than that, I think from the raw material perspective, this is the biggest thing, domestic.
Yeah. Internationally, coal tech companies are available. That's not a problem. And is the is the roll rate up, like, 1010% or so is what I understand? Because the return load is not available for a lot of truckers.
Load fleet no. It's almost flat over last year. As of, as I see the data, there's no change. Oh, even post COVID talking about current current Yeah. Yeah.
I'm on the current post COVID situation, Marlene. No. Don't have the number anymore. Okay. Understood.
Thanks. Thanks. That's all that's all from my side.
Thank you. We take the next question from the line of Navin Karte from Eelwife. Please go ahead.
Hello. Can you hear me? Yeah. Good evening, sir. Yeah.
Yeah. Yeah. Good evening. So so just a couple of questions. You mentioned 65 to 70% kind of a utilization for our plants.
I just wanted to confirm this. Is it for the plants that are operating, or is it at the company level that you are talking about? Company level. At the company level. The company level.
Operating plants, again, they are much higher. So all plants are operating except for the drilling units, which you said? Yeah. So Delhika is grinding unit is still not started. Each plant are operating 90% already.
West might be the Maniggarh, Avantor cluster has begun because the suppliers are going to that expressway project, big way. House plants have begun, and plants are operating. Yeah. Okay. That's that's encouraging to know.
And this is related to the sales. Is it coming at a higher cost in the sense that the previous question was also that since there is no return load, also the fact that the driver also, obviously, there is there was a scarcity, so to say, what we are hearing from Janet or media. And also, since social distancing as a norm has to be practiced, so is this utilization ramp up coming at a higher cost to us? From a distribution point of view, I haven't heard anything otherwise. See, what happens in a on on the ground, there are the same driver is not necessarily coming back, but the transporter is able to find some alternate driver.
My rates are not for the driver. My rates are with the transporter, the number of trucks that he, you know, deployed with us. As long as he's deploying those trucks, it's in his interest also for his own business. He has to deploy as many trucks. So rates are not being increased for that.
And the the the reverse logistics, if something is not you know, if the reverse logistics have gone down, we don't have a very number on how it is impacting currently. Yeah. Yeah. Yeah. Overall, logistic cost has now increased by acquisitions.
In fact, in some of the destination cost has reduced also. Okay. That's nice. You know, because in general, what you're hearing is there is scarcity of labor. I mean, apart from labor migration, there is also the driver set of drivers who are unwilling to, come to work, and that's where they were The driver The driver issue, I'm fully aware of, you know, tracking it, but alternate drivers are coming.
Or you can tell that I have to change driver to do a data and come back, but we are finding a frequent change in drivers the way the transporters are landing it. That is already as long as we have been in touch across. Okay. And are you also seeing some demand, as said, into some of the projects, that work in progress that construction or government projects has started? But also, are you seeing because since you said it's also the paid demand that you're seeing a very high percentage, are you also seeing some sort of channel filling or dealers carrying in higher inventory, so to say, given there is a bit of uncertainty in the near term, which could get done, like, know, disrupt the supply or something like that?
I mean, I mean, a dealer dealer community is a high grocery business, and they don't carry inventory. They don't have stock point. They they will give instructions to deliver the, you know, dispatch and unload at a location. They don't carry inventory. They don't invest so much.
So chances of, they're building inventory is highly unlikely. Sure. Right now, the demand is good. Sure. And and just, like, you know, related to this COVID thing and things that's so new and got every day caught every day of us unraveled.
The the in general, the changes that has to probably come to the business because at even at the plant, you cannot have, let's say, let's say, loading division or some functions where there is potential crowding of ladders. How do you address that? In the sense, is there more CapEx that you are planning towards having more automation at the plants or anything like that? So why is there is a lot of work in parallel happening, studies being done across the network, inter inter unit comparisons to see who are actually most optimal and then that's the case. This is a new norm a new normal that we are seeing.
Today, we are running the plan at 30 to 35%, and the plan is operating, right, without any handicap. Right. So it's a recovery that is happening. I cannot invest overnight in automation and it's newer. So my newer cost is not going down because I am paying everybody.
Right. But the plan is updating with lesser number of, you know, technical people on the shop floor. Understood. Understood. And just one last question if I may speak to say, you guys have given us an opportunity to test new ways of working.
Yeah. That's precisely my question was. So when you when you test new ways of working, there are two things can happen. Either it can improve the efficiency and we realize some cost of, you know, the lesser number of people or some people become redundant. That can be a cost saving from a longer term perspective or even though there could be automation.
I was just trying to understand that. Yes. Yes. As of today, we realized that we are able to operate a plant at 35%, 40% of the normal manpower policy. Sorry.
I I missed that. Can you can you repeat that? We have realized when we plan all of our SOPs were done on manning norms, etcetera, where people are required. We are now operating at maybe 35% or 40% of normal manpower. So that will seem to be a benefit in the longer term where we for the new expansion and Poly comes up or the new dining unit comes up, it will demand differently for sure.
Okay. And just one last question, if I may. Can you say, in the previous quarter, the central, utilization were the lowest. When you when you say Central, is it also Chhapithra that you include in that, or how do we look at it? Or is it only the Shatma cluster you're talking about?
Central is, Shatma, and the and the way we look at Central is the West UP and West MPE. East sorry. East. Not West. Sorry.
That's my East. MPE. Right. But some of the players in that region, like, you know, typically, the network for, let's say, hybrid work for that matter, they they report of a very high utilization, so to say. So that's where I was somehow, I thought, is there a disconnect?
Just wanted to clarify. Our utilizations are low. But now cluster is low for us as compared to somebody else because they are actually local player. Look at their distribution. Are they are very small market that they are pitching to.
As compared to our raw material also flowing from certain plants to the more lucrative Bihar market, which is quite close. Understood. That's it from my side sir. Thank you very much.
Thank you. We take the next question from the line of Sumangal Narodhua from Credit Suisse. Please go ahead.
Yeah. Good evening,
sir. First question is with respect to
the reversal of deferred
taxes. Any particular year as far as adjustment when we will be moving to the new tax regime in future?
If I were to, let out that secret, then you would know the UPS bump up this year to take place. So I'm not gonna tell you that. Okay. It's not a problem. Minimum to minimum two to three years.
Okay. Understood. Okay. And sir, with respect to CapEx of around INR
1,000 crores, I mean, what part of that is going towards completion of Bara and the Superdala grinding unit? And what would be maintenance? Bara has and, Neha, do you remember what is left on Bara? I don't think we have about 120. Bara has a 120 crores left, which will get spent this year.
Bichakur, ColdBlock also had somewhere around that number only. The last super, we have not factored in any spend as of now because when we get the plant and the plant is, you know, available. It's more of a maintenance and oiling the plant that will have to be done. So it's not a not too big a CapEx to my knowledge. Okay.
So 600 would be Maintenance. CapEx. 600 plus minus 600 crores will go on maintenance CapEx.
Okay. And this is is this a reduced maintenance run rate given the
challenges this year, or this is something which is a normal run rate to assume in future as well? You know, $100,100 to 100 crores would have got revenues on our current network. Otherwise, we're not compromising on maintenance cost.
Understand. Okay. And next question, I mean, we we quite optimistic on
the rural demand. As a payment assessment, does your what proportion of the rural demand is given the government role in terms of, say, housing schemes, subsidies, etcetera, and what is then in self reliant? A broad intelligence and vendors. Because this needs to be self reliant or non government because everything is going in trade. And I believe that I don't have any data source to split the demand between government support and private.
And in a normal year, what would be
the total rule demand as a percentage of total mix? Around 30%? By what? In a normal year, what would be the rule in demand mix in the overall cement industry demand? About 35% or thereabouts.
Okay. And just one last clarification, you said 45%
to 70% utilization in May. April would be I mean, I know that April would
be what percentage utilization? It would be lower. It would be lower. April is not a month to talk about because you started around April 20. Yes.
Yes. Sorry.
Alright. Alright. Thanks. Thanks and all the best, sir.
Okay.
Thank you. Well, ladies and gentlemen, due to positive of time, this was the last question for today. On behalf of Azertech Symond, that concludes this conference. Thank you all for joining. You may now disconnect your lines.
Thank you very much.