Ladies and gentlemen, good day, and welcome to the Ultratech Cement Limited Q3 FY 'twenty 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 statements on the basis of any subsequent development, information or events or otherwise. As a reminder, all participant lines will 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 Dhaga, Executive Director and CFO of the company. Thank you, and over to you, sir.
Thank you so much. Good evening, everyone, and welcome to this call to discuss Alteryx results for q three f y twenty. Better late than ever. Wishing all of you a very successful and eventful 2020. I think too much is happening in the country and around the globe.
And in all this confusion, the growth story of India has actually taken a beating. But let me start by sharing some good news. We have started seeing improvement in demand from few geographies in the country with states like Corissa, West Bengal, Jharkhand, Bihar, Tamil Nadu, Kerala, Telangana, Maharashtra, Rajasthan and Mp. Turning around. And this covers a lot of territories.
The best thing to happen is the restart of work on the Palabaram Dam, the biggest irrigation project in the country, and several other irrigation projects have been reawarded by the AP government. Clearly, the government is concerned on the depressed state of the economy, and I'm sure where there's a will, there is a way. The honorable prime minister has identified and chopped out a detailed program of driving growth, and the cement sector is totally going to benefit with a thrust on infrastructure. You all would have read about the task force on national infrastructure infrastructure where pipeline has been identified in different segments for spending about 1,500,000,000,000.0 US dollars till 2025. Of course, the pipeline has this work that has been identified has to actually get awarded and start execution.
In real estate segment also, there is a 25% growth during second half of twenty nineteen for launches in number of launches of number of housing units in top eight cities in the smaller and lower ticket sizes. Unsold inventories dropped about 13% in calendar twenty nineteen versus the previous year. And we are, as I mentioned, seeing new launches. This should help in the overall pickup in the real estate demand in urban areas. Let's now talk about cement prices.
During the quarter, prices dropped on an average about 4% compared to Q2. However, they still remain higher than last year. Prices collected mainly in East, South, and Western markets. In some markets, prices have started picking up as we speak during the current month with improving demand sentiment. And how are the costs doing?
Please don't be alarmed seeing a higher amount of other expenses in Altertec's P and L. Let me first tell you about the exceptional items which have been charged in the P and L during this quarter. Rs. 133 crores has been provided against the disputed liabilities offered under the amnesty scheme called SAPKa Vishwas introduced by the central government. This amnesty scheme, as you might be aware, is for service tax and all other indirect taxes up to June 2019.
We've examined our various pending cases, and the gross liabilities involved against the settlement that we have taken is rupees $8.32 crores. All these liabilities are in the nature of contingent liabilities, show cause notices, and cases which have been going on. We thought it is better to focus the management efforts on productive work instead of spending time and effort on running around courts and legal authorities. To my mind, this will give us a lot of peace of mind, and we can do more productive work. As I mentioned, $8.32 crores worth of contingent and disputed liabilities have been settled by way of payment of $1.33 crores.
Sorry. The payment will be made by thirty first March twenty twenty. The provision has been made in this quarter. Another one time expense is an amount of 31 crores, which was incurred for the acquired Century plants as a one time exceptional cost as part of our process of integration and alignment with our company accounting policies. Both these items have an impact on operating EBITDA to the extent of nearly 82 a ton.
As for the transition costs or upgradation costs at Sensory plants, we will further have around 30 crores of spends in the current quarter as part of the integration program. Getting further into details in the costs, energy costs, they have reduced about 6% linked to drop in fuel prices. During the quarter, we have consumed pet coke at about $80 a ton as compared to $91 a ton in the same in the last quarter. Spot prices of pet coke are hovering around $70 and U. S.
Coal is around $80 on a landed price basis. The benefit of these prices will surely reflect in Q1 FY twenty twenty one. However, we are all aware of the IMO's ban on bunker oil being used as shipping fuel. Whatever we know of, most of the chartered ships are switching to low sulfur fuel oil, which will lead to an increase in their cost and thus the ocean freight. This means that we might not see significant fall further in the landed cost of fuel going forward.
It will be important to talk about green power. In our total power requirement, the share of green power is increasing every quarter. During this quarter, the green power constituted about 12.7% of our total power requirements, up from 10.5% in the last quarter. This excludes Century assets. At this mix, the company is reducing about five lakh metric tons of fossil fuel on an annual basis on a current capacity utilization.
Logistics cost, which is the biggest cost for cement industry, Railways extended the benefit of exemption from busy season surcharge till June 2020, which has helped maintain the logistics cost at the current level. The recent hike in passenger fares seems to have been absorbed very well in the system, giving us hope that there will be no increase in rail freight for some time. On the other hand, road freight rates have gone up due to hike in diesel prices. Synergies between existing plants and the acquired assets have helped reduce our lead distance by about 2% as compared to last quarter. As the capacity utilization of ancillary assets ramps up, this benefit could increase further.
During the last quarter, there were several questions about the Sensory Cement asset performance. We had just taken it over, and I did not have enough details to tell you. So now let me tell you about the progress of integration of Century assets. The assets are fast turning around. For the month of December not the quarter, for the month of December, we have achieved a capacity utilization of 79%.
This has been a month on month ramp up with average capacity utilization from these plants touching about 55% for the quarter. You'll appreciate that it takes time to convert category B brand into category A brand in the same markets. The dealer community selling a category b brand takes time to change their practices, and our team is on the job. For the month of December, with a 79% capacity utilization of the 14,600,000 ton of capacity of Sensory assets, we have achieved 55% brand transition, and this will reach upwards of 80% by the September '20. We are tapping into various synergies in operations, manufacturing costs and overheads.
Today, the production costs are higher by about INR $4.25 per metric ton from our neighboring plants. This includes the structural cost increase of 70 per ton towards MMDR royalty and about 125 per ton being exceptional costs. We expect to have a complete alignment in cost with Algertec costs by the time we complete the transition. We have been rapidly converting the Century plan into Algertech and are confident of a complete switch in twelve months since we started managing the operations by September from first October twenty two twenty nineteen only. And this acquisition, in my view, will start generating an EBITDA per ton in excess of rupees thousand.
Hence, it will not be relevant to look at the current quarter's performance as a steady state performance for the Century acquisition. Next, it would be worth mentioning about Aljadek Nagdwara. I think it has achieved nirvana, generating an EBITDA per ton in excess of 1,500 and a capacity utilization of only 15%. The production costs are in line with our existing plants or better than some of the plants. They will improve further with commissioning of a 10.5 megawatts WHRS plant by March 21.
This will be our eleventh WHRS unit. With improvement in demand, my guess is that this unit is unit is poised to for bigger wonders. Talking about WHRS, we now have a total operating capacity of 103 megawatts, and another 39 megawatts is under implementation. During the quarter, we completed the sale of a grinding unit of six lakh metric ton in Bangladesh at an EV of 30,200,000.0 USD. Our cash flows on CapEx till December 2019 were $11.50 crores, and we expect it to go up to 1,600 crores by the end of fiscal twenty twenty as against our earlier guidance of about 2,000 crores, thus saving us INR 400 crores of cash flows.
Orders have already been placed for the 3.4 metric ton grinding capacity expansion in the Eastern markets. Kathak will be a greenfield capacity and two brownfield expansions, one at Dhankuni in West Bengal and the other Patliputra in Bihar. All these three plants will be for composite cement. We expect to commission this expansion by March 21. I'm happy to tell you, and you would have noticed from the stock exchange release yesterday, that we have finally been able to commission the phase one of Para grinding unit, which was purchased as part of the deal from JP JP Associates.
Talking about the JP transaction, Dalla Super Unit, which is a 2.3 metric ton clinker plant, is expected to commission by March 21 after completing all legal formalities. There is a delay. However, we are fully covered on our existing clinker requirements. Having given you an overview of the cash flows that have taken place and what lies ahead, on the basis of twelve month performance, our net debt to EBITDA is at about 1.87 on a consolidated balance sheet, including the Star Cement UAE. We have reduced our net debt by about INR3486 crores during the first nine months of this year.
I'm happy to tell you that our ROS for the trailing twelve months has increased to about 11.2% as compared to 8.9. And ROE has improved to 10% as compared to 7.3% as of March 19. These numbers, of course, have to be looked at taking into account the front loading of the investments that we have made. We have a lot of capacity available, and I'm sure there are interesting times ahead, and Altertec is in a unique position to tap the opening up of the markets going forward. Thank you so much for listening to me, and I hand it over to you for further discussions and questions.
Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Session. Participants are requested to use handsets while asking a question. The first question is from the line of Vumika Nair from IDFC Securities.
Please go ahead.
Yeah. Good evening, sir, and thank you for the detailed opening remarks. So I just wanted to understand Century a little better. You know, we've clearly seen an improvement in realizations, and we are making the brand transition. So just wanted to understand what has been the average realization improvement on a per ton basis for Century?
And if you can give some color on the EBITDA for the asset?
Improvement in realizations would be a percentage. So right now, I think we are more focused on brand transition and then it's a marginal improvement only. Prices will start falling in line with Ultratech from January, March. And as far as EBITDA per ton is concerned, operating EBITDA excluding onetime costs
will be
about INR $2.67 per ton.
Okay. So in that sense, so as we move ahead, there will be a continuing cost of the 70 rupees and $1.25 rupees per ton?
Only only 70 rupees per ton, which is the MMDR royalty. And the one time cost, which we incurred about 31 crores in this quarter, I might have give or take 25 to 30 crores in the January, March quarter. Okay. So that that will be the end. And then from April onwards, we will have only the 70 rupees as an accept.
I can't call it an exception. It's part of business. So
Okay. And so so by then is when we are saying that that will hit the number of thousand rupees EBITDA per ton from
It will June.
Sometime in one q. Would that be a fair understanding?
Absolutely. Okay. Okay. With the capacity utilization in excess of 80%. Got it.
Got it.
Perfect. And as in when the balance is transferred or, you know, the balance of brand transition happens through the course of FY '21 and also the Baikoun plant shifts over at a later stage, the EBITDA per ton would broadly improve in line with the realization.
Yes. So when I told you that we will have in excess of 80% brand transition completed, I had excluded the Baikoun plant. Bei Kund plant will continue for strategic reasons to sell the Rillagold or the Century brand for some time. Ultimately, the team is firming up the view that we will have to put up a fresh line raise down that line and put up a fresh line unless there is some other technology or improvement possible to improve the quality of cement coming from that plant. So out of the 14,600,000 tons acquired capacity, Baikon is 2.4.
Baikon is 2.4, 12,200,000 tons would be 100% ultra tech. And this 2.4 will continue for some time as the old brand. Sells in Chhattisgarh market only, which is a very low price market.
So just second question is on the volume. You know, you gave some color that, you know, some color. Yeah. So just wanted to get, you know, some sense on this real estate. You know, how is that part?
You talked about infra being a key driver for demand, and if you can just throw some color on the real estate activity.
So whatever we have heard, and I gave to, you know, a small glimpse of the knowledge that you've gained. We are seeing an improvement in new launches in metro towns. Now new launches have to be looked at. They are not the luxury apartments. If I were to give an example of city of Mumbai, new launches in the ticket size of one to one and a half crore are seeing growth as compared to the luxury apartments of anything about INR 3 crores or those kind of apartments are just not selling and not too many new products are coming up.
We've been told that Mumbai has a surplus inventory for about twenty four months. And Bangalore, which is an interesting market, has an inventory of eight to nine months. Once this inventory becomes tighter of unsold houses, you start seeing new projects rapidly surfacing. And with RERA in place, there is no way that there will be any delay in project execution. Whichever project gets gets launched under RERA will see project execution also on time.
Good for Cementer.
Great, sir. Wish you all the best, and I'll come back in the queue.
Thank you, Bhagavad. Thank you.
The next question is from the line of Apoorva Bahadur from Jefferies. Please go ahead.
Hi, sir. Congratulations on a
good set of numbers, and I
understand it would be difficult quarter. So a couple of questions from my end. I wanted to understand, sir, something on this onetime settlement. So should we so is this once and done now, or should we expect more such settlements since you No.
The scheme is over. The scheme got over on Jan fifteenth? Fifteenth January. Fifteenth January. The government closed the doors for anybody wanting to go under amnesty.
This is nothing new. There have been several amnesty schemes which have come in the past period also.
Mhmm. Okay. And so how much would be the tax benefit? Because I think in your presentation, you mentioned it will be between forty forty to 70%.
That is a you know, INR133 crores is roughly about 50% of the Principal. Principal amount of the demand, which was contingent or disputed. We did not since it was contingent, we did not make any provisions. So it's a direct charge to PNL. Okay.
However, the contingent liabilities extinguished amounts to INR $8.32 crores. And the bigger point to note, Apoorva, is that suppose the matter is pending in Supreme Court, and the court prolongs and the decision is made three years, four years down the road, this INR $8.32 crores would have become INR 1,100 or INR 1,200 crores with compounding interest. Right. So we thought it best to settle these cases and move on in line.
Of course, makes sense, sir. Sir, secondly, also on your so overall, your premium cement piece is increasing the volumes over there. So I just wanted to understand whether we are still maintaining those EBITDA margins of INR 5 to 10 per bag? And going ahead, do you see these margins being maintained? Or will they come under pressure as the competitive intensity increases over here as well?
No. No. No. No.
So the
the premium products will continue to command higher EBITDA per ton.
So we are maintaining 500
and rupees per bag EBITDA per ton month? And EBITDA per ton
Not bag. Sorry. EBITDA per bag. Almost
higher here. Actually, slightly higher than that, but 10 would be the same number for your calculation. And as volumes go up, the EBITDA per per bag will also go up because of operating leverage or cost absorption.
Okay. Fine. So, sir, lastly, you have mentioned in your presentation that there was a fly ash price increase. Wanted to understand if this is seasonal or there's any specific reason, and how do you see the trajectory going ahead?
Generally, it's seasonal because suddenly, when there's a power plant shutdown, there becomes a scarcity in in a particular region. And like slag that you have seen in the past where steel industry saw an opportunity, power plants have also seen an opportunity of making money in fly ash. Fly ash used to be negative cost maybe a decade ago. Now now we have to incur a cost. So it's opportunistic and not necessarily seasonal.
Some could be seasonal also, but more because of a shutdown in our power plant.
Okay. So going ahead with renewable, possibly, there could be some increase over here as well.
Both ways. It could come down also. So we are doing you know, with the size and scale of our operation, any power plant big power plant would be more than happy to do a long term tie up with Altertec. And we are doing those kind of strategic initiatives to lock in our costs.
Makes sense, sir. So lastly, if I could just squeeze in one more. So I basically missed out on your expansion part. So if you could just elaborate on that, the three plants that you're I don't know.
So three plants, total capacity is 3.4 metric tons, out of which, Qatak is a grinding unit at Greenfield, which is 2,000,000 tons, and 7.7 or point 7,000,000 tons each. Brownfield expansion at Point six each. Sorry. Point six, not point 7.6 each at Dankuni And Bartleby Putra. This would add up to about 3.4.
The 3.4 MPPA, we should be commissioning by March 21. Total CapEx commitment, which I did not mention earlier, is about 900 something, 900 crores. $9.40 crores.
Great, sir. Thank you so much. I'll get back in the queue.
Thank you.
Thank you. The next question is from the line of Indrajit Agarwal from Goldman Sachs. Please go ahead.
Congratulations for a good set of numbers. I just want to understand a little bit more on the transition of brand part. So if you look at the others two acquisitions, for example, the Binaani and JPA, we did at a much lower time rate, about forty to fifty days. For this one, we are taking slightly longer. So what is this different this time around?
So if you start from December, then it is taking about six months. But by in the quarter, April, June 21, we should be 80% we should be 100% of the convertible possible plants. Okay? Is not possible, so you should count it out. We're taking six months.
Because don't count October, November. First two months takes time to settle the plants, people alignment, process alignment, etcetera. Now the bigger question, why is it taking so long? You need to understand the location of these plants. The Manikar plant, which is acquired, is 20 kilometers away from our existing Avarpur plant.
The Baikut plant near Raipur is 35 to 50 kilometers from two of our existing plants in Chhattisgarh. Mayer plant is less than 70 or 80 kilometers from two of our plants, Vela and Siddi. So these plants are and then Sonar Bungla, which is, of course, doing very well. It caters to the Northeast markets, and here we come in the Northeast markets with a big bang. All the other other plants, since they are operating in the same market where we were already existing, there's a gradual transition.
I cannot just uproot an existing brand and start selling under it does not it is not a selling of a label. There is a convincing to the customer about quality, the the benefits of a product that we are selling now as compared to what they were buying earlier. I don't want to lose a customer either, and I want to convince the customer to pay a premium. That's why it takes slightly longer. JP acquisition, if you were talking about, which conversion happened very fast, Vela Siddhi plant in Central Market, which was our first entry in the Central Market, EU, it was a virgin territory for us.
So it was launching launching of a category A brand straight away and not a conversion. Similarly, when we went as part of the JP acquisition, Vizag market, we were catering to that market from Taripatthi plant, which is very far away as compared to this plant, giving us access to the industrial development and, you know, that market. So we could launch our product and increase our volumes there. Then there is the Dalla plant, again helps us in the Eastern markets, easy transition. And Baga plant, which is up the hills in Jammu, I'm We were not present at or we were present in a very small scale because we were supplying material from Foothill, and it was exorbitantly expensive.
So small supplies, now we had an opportunity to launch big scale. We have been able to do that. Natura, similar story. While we were present in Rajasthan market, we are present in Gujarat market. The location gives us advantage to split Rajasthan into two territories, and we have been able to cater to Western Rajasthan in a much more granular manner, which helps us capture the market.
I hope I have been able to explain. Absolutely.
Thank you for the elaborate answer. One follow-up. So for the second plant, is there any incremental CapEx that we'll have to ensure?
There will be. There will be. Certainly. We haven't formed up the plans. Once we do, we will let you know.
All right. One last housekeeping question. Can you help us with our working capital release in third quarter and nine months as a whole?
Yes. So in third quarter, basically, we have released about INR834 crores, which is largely on account of inventory liquidation. You know You didn't ask
what account,
so don't tell him that.
About INR 1,000 crores, which is our working capital. Thank you. Thank you so much, sir. Thank you. You mentioned that in the cash flow side.
Shall we take the next question? Yes, please. Sure. The next question is from the line of Amit Murarka from Motilal Oswal. Please go ahead.
Good
evening, Mr. Dagar. Just a couple of questions. One, in the presentation, I see that you mentioned that the trade sales improved by about 3% on a Y o Y basis this quarter. Yes.
But overall volumes have declined 4%.
So can
like is this does this imply that basically your institutional volumes or the infrastructure volumes were the spoilers for here?
What Absolutely. Are No. And in a depressing market, everybody knows that infrastructure activity has slowed down. So our focus it was easy to focus on the trade market.
And what was the trade, non trade split then in this quarter?
68% is trade.
Sure. And on the infra side then, as we see that some coastal projects are getting approved, Mumbai, Snakpur Highway is going up. So do we expect a pickup in that segment then going ahead?
Yes, yes, very much. As I mentioned, I think that's the best part. That's the brighter side of life that things are picking up. Now take the case of Mumbai and Maharashtra. Maharashtra, we are firing full throttle in in both the plants, the Bhanikar and Awarpur plant now with the Mumbai Nagpur Expressway.
And coastal roads will also pick up. No cement consumption has started here, but it will pick up.
Okay. And also on the pet coke side, basically, the power fuel cost has come down this quarter, but the presentation mentions $80 as the consumption cost. Yeah. Whereas I believe the stock spot prices have been much lower. So like, again, can you quantify what kind of benefit can flow through on the 4Q also now on the power fuel front?
Well, I think I mentioned it. Our consumption was $80. And if you're buying at about $70, a $10 differential, give or take $50 a ton in costs, would reflect in the next quarter.
Sure. And lastly, on on the power grinding unit. So this is phase one. So there's another 2,000,000 in phase two as well. Yes.
One, by when will this be commissioned? And secondly, what do you think or expect the wrap up schedule to be over here given that the Superdala clinkers will come later?
So I clarified that we are not short of clinker. We supply clinker from Siddi, where we have a clinker to Parra. And Parra will ramp up in the next couple of months of this 2,000,000 ton capacity. The phase two, I expect, will commission by September 20.
Sure. And but will there be enough clinker for phase two as well? Phase one, I understand, will have
Yeah. Yeah. We will have enough clinker.
Okay. That's all. Thanks.
Thank you.
Thank you. The next question is from the line of Ritesh Shah from Investec Capital. Please go ahead.
Thank you for the opportunity, sir. Sir, my first question is when we look at our volume growth for the quarter as compared to the industry growth, I don't know what it is. Sir, how do you look at it? Are you happy with our volume growth on a year on year basis? I mean, the growth?
I think we performed better than the industry.
Sir, can you help? What was the industry growth number? Basically, broad number should be helpful.
I difficult to pinpoint a number because there are it's a fragmented market, and there are so many unlisted players. My giving a number might send a wrong signal. So I would avoid commenting on that.
Okay. But if I have to put it the other way around, have we lost market share in any of the regions given the decline that we have seen? Or is it that the industry growth rate would have been industry decrease would have been higher than what we have reported?
I don't think so. I think we have gained gained in terms of market share. There might be a district level number, which I I I'm not tracking, but generally, overall, we have increased our market share.
And this would be across regions. Right?
Yeah. And on all India basis.
Okay. And that's helpful. Sir, secondly, just to continue with the prior question, you indicated that we have adequate clinker now. This is despite JP Super there being a delay over here and phase one getting commissioned for Barra. And Century also had a million ton deficit to my memory.
Sir sir, when you say we don't have a deficit, is it you are adjusting for the OPC, PPC, PSM mix?
Absolutely. So that that is taken care of, plus the surplus clinker that we have at SITI. And there is inherent debottlenecking capacity, which is available at the acquired plants.
Okay. So sir, how should we look at the OPC, PSC, PPC and composite cement mix for us, say, FY 'twenty and FY 'twenty one, just so a better understanding On of the basis, a
when we are 68 today? 68%. We are 68% on a blended cement FY 'twenty one. We should be around 71%. Blended cement.
Blended cement includes PPG, slag, composite.
FY 'twenty.
And that's helpful. Sir, last two questions. Sir, on Valputi, what we understand is we have lost market share, not giving discounts on smaller kg bags, one kg and five kg, and the peer set has benefited. And sir, this has been going for the last six months or so. Sir, any thoughts over here?
One is if you can give some numbers over here on the top line and EBITDA, that would be useful. And are we fine with this market strategy of losing the market share?
So we want to maintain our price position, and there is a core market which we are catering to. I don't think the domestic players are gaining market share. It's more of the imports which are getting an advantage, imports from UAE or the Middle East markets, which is has found its way into India.
Sir, I was referring to Valputi. So
Valputi, I think was referring to white cement. Yeah. Yeah. Valp Valpierre Putti, it's the paint companies which are gaining market share. I'm afraid I think we are not wanting to compromise on our pricing position, and we will live with the situation as of now.
Okay. And sir, last question, incentives on the eastern expansion that you indicated in the three places, one greenfield, two brownfield. So have the incentives been formed up? Because what we hear is the states are going slow on rolling out incentives. So please correct me if I'm wrong.
Yeah. States are you're absolutely right. Hardly any states have states have cash flows. Orisa, the policy exists. We we will try for our incentives for the cutout grinding unit.
Okay. But, sir, nothing formed up?
Nothing formed up. Nothing formed up. And Bengal, I think it's really a dry state in terms of in all terms. So difficult to get incentives in West Bengal. Bihar has also announced a policy, Prudhish.
Bihar also policy Bihar also has a incentive policy where we will apply for incentives.
Okay. Sir, I have more questions.
I'll join back the queue. Thank you so much.
Thank you.
Thank you. The next question is from the line of Tejas Pradhan from Citigroup. Please go ahead.
Hello?
Hi. This is Rashi
Hi, Rashi.
Hi, Jenny. This is Rashi. Yeah.
You'll have to be
a little more louder,
Rashi. That.
Little louder, Rashi.
You had mentioned is it better?
Yeah. Better.
So you had mentioned that, you know, prices have picked up in some regions. And, I mean, please correct me if I'm wrong that, you know, the I I believe that West Part of the South has not improved yet. But you you also suggested that, you know, the dams and some of the irrigation projects have started at, you know, the West Department demand looks like it's kind of picking up. So is this just a background? Like, is this, like, a time distance before which we see guys are too much across or the pickup not unwanted warranty yet or demand?
I couldn't catch. What reasons are you hearing after I picked up?
I said has there been a price improvement in all of South and all of West?
No. No. No. Not all. Not all.
For example, we are not seeing in Gujarat. We are seeing improvements in Maharashtra. We are seeing improvements in some regions in South. Rajasthan is seeing an improvement in North. East is growing so rapidly, showing double digit growth again in this quarter.
We'll start seeing price improve.
So has the price so has this demand improvement that we're seeing in the South, that's not fully translated into price five
gs?
Not yet. Not yet. I think you will start seeing my sense is that capacity utilization starts going up, you will start seeing price improvements.
And what would be the utilization of the South, like like, ballpark right now?
Current prices?
Utilization in the South. Utilization in the South.
Utilization. One second. Somewhere around 70 percent.
Okay. Okay. And just one more question on and and not not linked to the results. The if partly, what are the what are the timelines that you're looking at? So from I don't know your update.
What what are the timelines for the in favor?
Guess what? And I hope everybody is listening. I did not bid for Imamy. So now you need to discount all the news that you guys read in the newspapers.
Sorry. You said you did not bid.
Did not bid at all.
And I would always be surprised what newspapers are reporting. The asset is of no interest to us.
Okay.
So there there were some people who are worried about our cash flows. Are as conscious as you are about our cash flows.
Okay. Got it. Okay. Thank you. Thank you.
The next question is from the line of Sumangal Nevadhya from Kotak Securities. Please go ahead.
Yes, good evening, sir. Sir, first question, again, a little bit more on demand. Is it in the last two months more restocking demand or we're seeing actual project and real demand growth?
What do you mean by restocking? Demand is never stocks among those. So depot stocks or warehouse stocks will be two days, three days, just small warehouses. So I don't know what what do you mean by restocking or
Generally, what we hear is December, I mean, there was expectation of strong price increases in January.
So Right. No. No. No. I think there's a you are misinformed.
There's actual activity on the ground REPRESENTATIVE:] which is taking off.
And this is from more from January onwards or December itself? December
is when we started seeing which helped us improve capacity utilization also. As I mentioned on my in my commentary, we were able we we've seen century assets improve. November was better than October, and December was better than November. So we did nearly 7980% capacity utilization on Century assets, up from below 50% a quarter ago. So this is actual work happening.
Understood. So secondly, on our volume growth, now if I I think last December, Binan Nagdwara was just for, like, eighteen odd days. So if you look at ex ex Nathwara,
it's
a seven to 8% volume decline y o y. Is that the right calculation?
Ex Nathwara. You know, it is very very difficult because we move material criss cross. If suppose I was not moving material from Nathwara, I would have moved material from Aditya cement and. So beyond the point, it is impossible for us to segregate, you know, old versus new.
Okay. But you still I mean, a bit confident that we've not lost market share and industry would have overall volume growth in the industry would have declined by more than 5%.
No. I never said anything about volume decline in the industry. Industry would see a decline of 1%, 2% only or nothing significant.
Understood. Okay. Just one small clarification. Is there any progress on the Nagwara's non core assets?
Oh, I forgot to update. We have appointed merchant bankers for China, and nonbinding bids have been received. We will take action in post I was thinking of post Chinese New Year. Chinese New Year always begin from today, and the country shuts down completely for fifteen days. But now I'll have to wait for this new virus issue which has come up.
I don't want to travel to China. So we will look at the next steps on China in the month of March. And as far as Europe is concerned, things are progressing well. We might be able to close the deal by June. Dubai, unfortunately, we haven't been able to find any suitable buyer.
We are trying to operate the plant and improve its efficiency.
Understood. Understood. All right. Thanks and all the best, sir.
Thank you.
Thank you. The next question is from the line of Naveen Sahadev from Edelweiss Securities. Please go ahead.
Hello.
Yes. Hi, Naveen.
Yes. Good evening, So a couple of questions. Alt Nadwara cement per se capacity utilizations you mentioned remained at 60% in this quarter, and I think it has remained at that level for a while. It will essentially take
yeah. Sorry. Go on. Go on.
Yeah. So my question basically was that in case of century textiles, I mean, those assets, there seem to be, like, a good ramp up progress happening there. December, as you said, was 79. But Nagwara remains at 60. But I think overall region per se in north, they could be at least upwards of 75 or 80% or so.
So what's the
No. The it's the market mix, that determines plant to market ratios. So we have surplus capacity available in the market, and we'll use whichever plant is most l one in terms of, you know, logistics cost to serve the market.
Got it. Understood. So basically, other plants could be operating at a much higher utilization probably, and then Yes.
Yes. Could be.
Okay. And in in case of Century Textile, said average for the quarter was 55, but exit was about 79.
Yes.
And with March only being better versus the December, we can easily expect an upwards of about 85% or the utilization for the
full 15 quarter. Percent increase
the overall
sold.
Question on the pet coke usage. The presentation mentions overall pet coke at about 77% versus 69%. I'm assuming that is for the quarter.
Yes. Yes.
No. Because in your November corporate dossier or that November company presentation, what I see for the first half, pet coke consumption is actually at 64% versus 71% last year. So and in the same time, I think we are ramping up utilize I mean, that with Coke usage both at Nathwara as well as at Century. Yeah. So I just wanted to confirm.
So No. No. Absolutely. It's bang on. No no confusion.
Sensing has come in now and from a insignificant pet coke to a high pet coke. Nadwara was zero pet coke to now 100% pet coke. So this quarter has an advantage in terms of pet coke consumption. And, you know, in current times, pet coke has lost its shine because it is easily swappable between US coal. US coal also has a high calorific value.
So whichever sells cheaper will be used.
Got it. Got it. And just one last question, if I if I may slip in. Sir, in the previous quarter's con call, you seem to be a lot interested about Imami cement. I think there was some question about will CCI be an issue?
Or even to the extent that since you're already announcing a three plus million ton expansion there, would you still be interested in Mammi? And now there's a change of heart. You said you're not interested in that asset. So if you could just throw some light to understand, is there a what
could be evaluated? We did the due diligence. We put in a lot of effort to understand what value it brings to the table. They don't have clinker, and there's surplus mining capacity and some land bank. So you can't sell me a dream and value it at a, you know, EV of a operating plant.
Still a lot of disconnect. There were a lot of other issues that we found in the due diligence, which were not comfortable for us.
Got it. Valuation disconnect, Clazy. Got it. So that And just one housekeeping question. The white cement was in revenues that that you normally give, Nilish shares, I think.
3.4 tons
is six
this quarter as compared to 3.7 lakh tons Q3 twenty nineteen. Revenues? INR460 crore this quarter and last quarter?
INR500 crore last year. And
RMC revenues?
INR500 crore for this year and last year, INR520 crore.
You. That helps. Thank you so
much. Thanks.
Thank you. The next question is from the line of Rajesh Ravi from HDFC. Please go ahead.
Hi, Rajesh. Yes. Hi, sir. Good evening. And I have a few questions.
For the East expansions, which you just you know, going ahead, what sort of clinker backing we have, or are we looking at some clinker expansion opportunities in East? And second would be on the WSRS, you know, which all places and what capacities which we are adding over next one, two years?
We have clinker available at Helmi Ravan and some surplus which is coming in from Mahir. If I Century has in totality, you might see from their perspective, they were short and clinker. But when we are merging it with our overall network, we have some surplus clinker available from Mayer and the debottlenecking that we are doing at the century plants, which will help us meet the requirements at Kathak, Dan Kuni, and Patiputa. Dalla existing Dalla also is undergoing debottlenecking, which not not on a heavy CapEx. It's a routine stuff being done, which is releasing clinker capacity for us.
And Dullaby, when do expect the clinker to be up and running?
Dullaby super, I would, you know, keep time in hand and commit by March 21. Lot of progress has been made in the UND government. The files have moved to the central government now, to to the ministry MOES. And hopefully, we'll get clearances in time for March 21 clinker going on stream.
And sir, on
WSR, just for the locations.
So we will be having in Gujarat plant, Andhra at Taripatri plant, in Central Market, Bela plant and the Nassat plant. Manikar.
So Manikar, the Sensi plants also will be considered for expansion of WHRS. Okay. I think my colleague stopped me because board has not yet approved it. We are still forming up the proposal.
Okay. So, you know, just extending on this question, we have around 85 megawatt WHRS currently.
103 megawatts.
Today. Okay. So we added something in this quarter, q three.
Last quarter. Last quarter. It's called q
q '2, not q '3.
Q two, Okay. Which place, sir?
So my basically, it has got partly commissioned at Gujarat, Tarifatri, and Rajasthan at Kolkutli plant.
Okay. So around five watt five, six megawatt each.
Yeah. So final target at
one thirty one megawatt is what remains for you? $1.41.
One forty one.
One forty one. So additional $1.41.
Up
to one forty one, everything has
been sanctioned and work in progress. We will look at the next phase because there are this would cover about 11 plants. Right? One thirty one Eleven plants. This covers about 11 integrated plants out of the 20 how many?
22 integrated plants. So there is scope for doing WSL and other plants also.
Great. And so just two last questions. One on the Binaani, you know, what helped you scale up 1,500 EBITDA margins? We understand pricing is relatively stable, but, you know, despite that, this is a very strong number. And, you know, first on this, maybe, please.
Our brand is very strongly respected in that market. Okay. We we sell more than, I think, 25,000,000 tons annually.
That's a capacity that we have
plusminus 25,000,000. So point is, northern markets, we have a very strong foothold and the price premium that we enjoy in the market is very strong. Cost advantages, we have been able to drive very hard in the improvement program for Nardwara plant. Logistics cost, one of the biggest things. It's a very sweet location.
It's a sweet spot at this plant. It's saying bang on the borders of Gujarat and Rajasthan, getting it a optimal advantage on lead distance.
Okay. So what would be a sustainable margin? We know because, earlier, we were factoring in 800 to 900 would be a sustainable EBITDA margin. But in this case, it's 1,500. Sorry?
As an I mean, as an analyst, you know, we were not affecting, you know, obviously, plus and 1,500 in q three. Obviously, it sets a, you know, high benchmark for this plan.
Yes. So, I mean, I will not let it go through those four days mark.
Great. That's a great thing, sir. And lastly, because you're not going ahead with the Imami at least for now, and your own expansions are clear.
For now. Never.
Okay.
Okay. So do you see the competition remaining elevated in that market? Because you would also have, you know, that market would remain relatively fragmented, and lot of capacities are piling up across Orissa, West Bengal grinding units and all. Yeah. So what is your thought process in terms of pricing, you know, stability in the Eastern market?
East, I think there is so much of demand today also. And whenever new capacity stabilizes, there is some some correction in prices, and then prices bounce back. However, it has not helped the overall EBITDA for the zone to improve. I do think if we if you were to analyze East as a stand alone, if you have results of companies for the East Zone only, then nobody would be generating a four digit number in the Eastern markets.
Correct.
So is a market for high capacity utilization, good operating leverage? Yes. Great,
sir. Thank you for taking my questions, and all the best. Strong set of numbers for you keep repeating it. Thank you, sir.
Thank
you. Thank you. The next question is from the line of Bhavin Chedda from Enam Holdings. Please go ahead.
Yes. Good evening, Two questions. One, what was the average lead distance in the quarter and nine months if you are sharing the approximate About 100 kilometers. Around 400?
Yes.
This would be after including Century, Benani, everything.
Yeah. And Century, Benani, and Klinka because Klinka travels long distances. We transport Klinka from south to east also. So.
Alright. And sir, what would have been the white cement one would be and the RMC EBITDA in this quarter? I missed that number if No. You
Difficult to compute it separately here.
Combined number you have for the quarter?
No. Don't look at the EBITDA separately, Cement for us.
Okay. Okay. Thank you, sir.
Yeah. Thank you.
Thank you. Ladies and gentlemen, that was the last question. On behalf of Ultra Tech Cement, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.