NCL Industries Limited (NCLIND) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to NCL Industries Limited Q2 and H1 FY27 on its conference call. As a reminder, all participant lines will be in the lesson-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Purwangi Jain from Valoram Advisors. Thank you, and over to you, ma'am.

Thank you. Good evening, everyone, and a very warm welcome to you all. My name is Purwangi Jain from Valoram Advisors. We represent the investor relations of NCL Industries Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the second quarter and half year ended of the financial year 2027. Before we begin, a quick cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. The purpose of today's conference call is purely to educate and bring awareness about the company's fundamental business and financial performance for the period under review. Now, I would like to introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. K. Ravi. Vice Chairman and Managing Director, Mr. Prasad, Executive Director and Chief Financial Officer, Mr. Utkal B. Goradia, Executive Director, Mr. Suresh Kumar, Vice President Finance and Accounts, and Ms. Divya Bharti, Company Secretary and Compliance Officer. Without any delay, I request Mr. K. Ravi to give his opening remarks. Thank you and over to you, sir.

Thank you. My name is Ravi, Vice Chairman and Managing Director. Good evening, everyone. I would like to welcome you all to our Q2 H1 Finance Year 27 Earnings Conference Call. We are pleased to have this opportunity to engage with the investment community, share an overview of our business and discuss our performance. Before we take you through the business segments, quarterly and half-yearly performance, in the interest of some of the people who may be new to the company, let me first start by giving you a brief overview about NCL Industries, established in 1979 by late Sri Ramachand Raju. NPL Industries has built a diversified presence across building materials and renewable energy. Over the years, the company has developed a strong operating platform supported by established brands, manufacturing capabilities, and a wide distribution network. We have 10 member strong board of directors headed by Mrs. Renu Chandu as chairperson who brings over 40 years of expertise. In banking, merchant banking, risk management, and corporate governance, having headed leadership positions in State Bank of India. Our business operations are spread across four segments, cement, ceramics concrete, cement-bonded particle bore, and green energy. Our flagship brands include Nagarjuna Cement, Nagarjuna RMC, and vice and finance have established their presence across their respective markets. The diversified portfolio allows us to participate across multiple stages of construction and infrastructure value chain, while our green energy business complements our focus on operational efficiency and sustainability. Over the years, we have also built relationships with the distinguished clientele, including Tata Projects, Lassan and Tudor, ITP, NTPC, IVRCR, and Shapurji, Kolonji, among several other deputed organizations. I will now hand over to our Institute Director, Mr. Uskar Buradiyar, who will take you through the business segments in detail.

Thank you so much, sir, and good evening to all. I am Utkal Goradia, Executive Director of NCL Industries. Cement remains our largest business. We operate three manufacturing facilities with an install capacity of 4 million tons per annum and clinker capacity of 2.6 million tons per annum. Our manufacturing locations at Simmapuri, Kontapalli, and Vishakapatnam. Together with a distribution network of more than 2,400 dealers across Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, Pondicherry, Kerala, Maharashtra, Chhattisgarh, and Torissa, support the reach of Nagarjuna cements across our key markets. Our product portfolio includes OPC and greener products like PPC and PAC and other cement variants. Catering to diverse construction requirements. Our ready-mix concrete businesses complement our cement operations and serve customers in key urban markets. We currently operate 10 ready-mix plants, comprising 6 plants in Hyderabad and 4 in Vishakhapatnam, with a capacity of 60 cubic meters per hour at each plant. In cement bonded particle boards, We operate three manufacturing facilities with a combined install capacity of 90,000 tons per amp. The business is marketed under the brand Bison Panel with portfolio that includes Bison Panel, Plane Boards, Designer Boards, Laminated Boards, and Planks, which are suitable for ready-to-install and low-maintenance solutions from premium interior applications, decking, flooring, and wall sliding. With an attractive wood-like finish. We have continued to expand our distribution reach with the dealer network from 229 in FY24 to 343 in H1, FY27 across India. Our green portfolio comprises 42 MW of installed capacity, including 15.75 MW of hydropower, 18.3 MW of solar power, and 8 MW of waste heat recovery. This portfolio supports the energy requirements with a substantial portion of the power generated being used for captive consumption. Building on this foundation, we have taken a further step to scale up our renewable capacity in continuation to our announcement in April 2026, when the board had approved phase one. of the 50 megawatt solar and wind power projections at Tutikoran, Temelnadu. The board has now approved phase 2 and 3 covering the balance capacity of 80 megawatts at an estimated cost of 595 crores. With this approval, the entire 130 megawatt project, which entails an aggregate investment of approximately 987 crores, which will be funded through a mix of debt and internal approvals. The required debt financing has already been sanctioned by ICICI bank and HDFC bank. Approximately 40% of... The power generated from this project will be utilized for captive consumption, while the balance is proposed to be sold to other bulk consumers or through the Indian Exchange, IEX, upon implementation of this project, the company's debt-to-equity ratio is expected to increase from present levels of 0.26 to approximately 0.9. This project is expected to further strengthen our renewable energy portfolio and enhance our long-term energy security. Alongside strengthening our existing businesses, we continue to focus on strategic initiatives to enhance the operational capabilities, improve cost efficiencies, and support sustainable long-term growth. One such important initiative is the acquisition of Vishwambara Cements Limited, which has a limestone mining lease spread across 322 acres. This acquisition is strategically significant as it strengthens our raw material security and provides an opportunity for greater backward integration, supporting the long-term requirements of our cement business. Another notable development is that the company is exploring the opportunity to set up a cement plant in Orissa and approaching the government to pursue any relevant applications and approvals. The proposal is at a preliminary stage. Any further decisions to proceed with the project will be subject to applicable approvals and the company's further evaluation approvals as applicable. I now hand over to our Executive Director and Chief Financial Officer, Mr. Prasad, who will take you through the operational and financial performance of the quarter and half.

Good evening to everyone. The period from July to September is generally considered as off-season for the cement industry due to the monsoon, during which demand typically remains subcute. However, this year, the second quarter witnessed the healthy demand primarily driven by the housing center and infrastructure developmental activities. On the pricing front, cement prices remain subcute, while rising coal costs and fuel costs continue to accept pressure on margins. Despite these near-term challenges, the long-term outlook for the cement industry remains encouraging, supported by sustained infrastructure development, and demand from the housing and infrastructure sectors. Let me take you through the performance of each of the business segments. Coming to cement division, which continues to be the key contributor to the company's operations, During this quarter, our cement sales values registered a growth of 60%. Reflecting a healthy demand across our key markets and consistent operational performance despite the seasonal challenges associated with the market. Consequently, revenue increased by 12% on quarter-on-quarter prices and 11% on year-on-year basis, primarily driven by the higher sales volumes. Capacity utilizes to date 79% during the quarter and 74% for the first half-year based on our expanded capacity. In the first half of the year, cement sales stood at 14.59 lakh tons compared to 12.63 lakh tons in the corresponding period of the previous year. On the operational front, EBITDA per ton stood at 418 rupees for the quarter and 475 rupees for the first half of the year. In absolute terms, the cement division reported an EBITDA of 38 crores during this quarter and 74 crores for the half year. As remains our principal business, our ready-mix concrete operations provide us with an additional presence in the conception value chain. Let me now share the performance of this division. RNC division sales volumes registered a growth of 9% on quarter-on-quarter basis. However, volumes for the first half of the year declined by 18%. This decline was primarily attributable to challenging market conditions. The RMC division reported an EBITDA of Rs.1 crore during this quarter and Rs.1.47 crore for the first half of the year. Moving on, our cement-pointed particle board business continues to be an important part of our diversified product portfolio. During this quarter, we undertook certain initiatives to strengthen the brand and improve its market reach. The Bison Panel division registered a volume growth of 6% during this quarter, as well as for the first half of the year. With this objective of strengthening our market presence and addressing the issue of duplicate products being sold under the Bison Panel name, we have launched an advertising campaign across various media platforms, including social media and television. In addition, we have reduced Bison Panel selling prices by approximately 17% to 20%, to improve the affordability and enhance market penetration. We expect these initiatives to strengthen our brand presence and support higher sales volumes in the coming periods. The division maintained a healthy EBITDA margin of 14% during this quarter as well as for first half of the year. In absolute terms, this division reported an EBITDA 5 crores for the quarter and close to 10 crores for the first half of the year. Coming to the energy division, we have two small hydropower plants with an aggregated instant capacity of 50.75 MW. Both the projects are canal-based, and power generation is entirely dependent on the availability and release of the water into the canals. During the first quarter, there was no power generation from either plant due to the unavailability of water. However, during the second quarter, the plants generated 9.22 million units of power. Of these, 1.81 million units were utilized for captive consumption, while the remaining power was sold to the grid under the respective PPAs, power purchase agreements. The Energy Division reported an EBIT of 0.63 crores during this first half of the year. Coming to the company's overall financial performance, revenue from operations for the second quarter of this financial year stood at 386 crores, registering a growth of 12% year-a-year. As well as quarter-on-quarter basis, EBITDA for the quarter student 37 crores, declining by 26% year-on-year and 6% quarter-on-quarter basis. EBITDA margin student 9.64% contracted by 502 basis points year-on-year and 189 basis points sequentially. Profit after tax student 20 crores for the quarter, increasing by 1% year-on-year and 15% quarter-on-quarter basis. Back margin was 5.18%, lower by 60 basis points here and here, but higher by.

Line for the management is disconnected. Please stay connected while we reconnect them to the call. Ladies and gentlemen, thank you for patiently holding. We have the line for the management reconnected. Over to you, sir.

So, I will start from this financial performance. Shall I start from the beginning? No. Financial. Financial performance. Overall financial performance of the company. Revenue from operations for the second quarter. Student, 386 crores of rupees, registering a growth of 12% year-on-year and also on quarter-on-quarter basis. EBITDA for the quarter student, 37 crores of rupees, declaring by 26% year-on-year and 6% quarter-on-quarter basis. EBITDA marches student, 9.64%, contracting by 5.2 basis points year-on-year and 189 basis points sequentially. Profit after tax stood at 20 crores of rupees, increasing by 1% yield on year and 50% quarter and quarter. Fat margin was at 5.18%, lower by 60 basis points yield on year, but higher by 12 basis points sequentially. Moving to the half-yearly performance, revenue from operations for the first half-year stood at 730 crores of rupees, These three are growth of 7% here. EBITDA stood at 77 crores of rupees, declaring by 25% year on year. EBITDA margin was at 10.53%, lowered by 453 basis points compared with corresponding period of the last year. Profit after tax for the first half year stood at 37 crores of rupees, declaring by 7.2% year on year. Pat margins stood at 5.11%, down by 80 basis points. The compression in EBITDA margins during the quarter was primarily attributable to a decrease in selling prices. and increase in raw material costs, which accepted pressure on the overall cost structure. These cost pressures impacted operating profitability despite the growth in revenue. At the segment level, cement contributed about 84% of first half of the year, followed by cement bonded particle boards at 10% and ready mix car grade at 7%. We are happy to report that the company has a crystal A stable rating and a net worth of Rs. 969 as of 30 September 2006. Going forward, our priorities will include strengthening the performance of our core civil business, improving operational efficiencies, expanding the reach of our building materials portfolio, pursuing our renewable energy activities in a disciplined manner. We will continue to focus our prudent capital allocation. Customer service, and sustainable long-term value creation. With that, we conclude our opening remarks. Thank you for your continued interest in our company. We would be happy to take your questions now. Thank you.

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. This question is from the line of Kinar Mehta from Eureka Investments. Please go ahead. In Armeta, your line is unmuted. Please go ahead with your question. Please proceed with your question.

Yes, please go ahead. Now, sir, we are doing 987 crore capex, which has increased from, I guess, earlier it was lower by 70 crores. So, in April, it was communicated around 920. So, why this has gone up? My question is regarding what is the component of wind and solar? Because we have been told it's a combo of wind and solar. So, what is the wind component? What is the solar component? The third question is, how much unit will shall be generated from this 1,000-closed capex? How much shall be internally utilized? How much will be sold? What would be the ROI on this capex? How much amount we intend to fund it through Debt 10? Because it's a very large capex, and we are also talking of Odisha cement capex. So what are our plans? How much would be through Debt? How much would be through internal accruals? And so when you Google it, the standard cost appears to be much lower. So why our cost is so high? So I would request management to give much more clarity on this.

Thank you. The project cost has gone up by 68 crores. So that is the reason for the escalation in the project cost, overall project cost. Regarding this funding, so 70% of this project cost will be funded through debt, so balance will be through internal accruals. So we got these sanctions from HDFC Bank and ICIC Bank for 675 crores, representing 70% of the debt. Coming to the consumption point of view, We will be using almost 40% of the power generated from this project for our captive purposes and balance will be sold to other bank consumers or through the exchange. So that is about this project.

So, just a follow-up question. So, basically, 100 megawatt solar would cost around 400 and 30 wind would cost around 250. Even if we total it, it would become around 650. So, why our cost is this high? And this would, how much unit exactly, because my math says that we'll be able to generate around 30 crores unit. Did I make my calculation right? And how, what would be ROI based on this 28 crores unit? Thank you.

Yes. Yes. Solar capacity would be around 170 megawatt. So each megawatt will cast as almost 4 to 4.5 crores. So that itself will be around 700 crores. At balance, 250 crores, that is 2 watts width. That is your observation is also correct. So 30 megawatt into 8 crores per megawatt, that will be roughly about 250 crores. 950 crores, something like that, including transmission line and all those things that will be costing 980 crores for this project.

What would be our units? How much would save? I mean, so what is the EBITDA will be able to generate with this?

In terms of this, for a captive consumption, there will be a saving of almost 3 rupees per unit, see, as of now, we are purchasing about 7 rupees per unit, and the cost of generation from this plant would be around 4 rupees per unit. So, there will be a net saving of about 3 rupees. So, balance in the exchange through the bulk consumers, we can earn almost 4 rupees per unit. So, total will be same, 4 rupees per unit we can generate in terms of revenue.

So we'll be able to generate around 90 crores of EBITDA, and the same price it could be sold, right? I mean, the excess. So, on 25, 28 crores unit, we'll be able to make around 90 to 100 crores of EBITDA. I mean, saving or generating? Am I right? I mean, this broader calculation?

Correct, correct.

So, this leaves us around time. Mr. Mehta, may we please request you to rejoin the queue, sir, for the follow-up question. Thank you, sir. Next question is from the line of Keshwagar from Counter Cyclical PMS. Please go ahead.

Speaking from the earlier speaker, so basically we are investing approximately 1,000 crores, which is more than our net worth, and basically we will generate 90 crore kind of EBITDA. Don't you think it's a very low ROE project, and if we are only using 40% captively, then why not invest only 400 crores instead of investing 1,000 crores?

The thing is that once we repay this debt, see, we have taken this loan for 3 years moratorium and 9 years repayment, that is for the period of total 12 years. After repaying this debt, the project will be completely debt-free, and the total generation, whatever is there, that can be used at whatever is the bottom line, that will be straight away saving to the company. For the future expansion also, the balance power can be utilized. This is the Good morning, everyone.

Since the CAPEX is being done in Tamil Nadu, I understand, so will we be able to wield the power to wherever we are planning to set up the new cement line?

Yes, sir. This is an ISDS project. We got the connectivity from the Central Transmission Utility. This is the power grid substation in Tamil Nadu, Deer Tutkore. So there we are setting up this plant. The power will be transmitted through the PTCL substation. So, throughout the India, we can use this power.

Sir, and what is the cost of debt that you are getting the 70% loan at?

This is around 8.5%.

Is this fixed of floating? Understood. Sir, so if we see our net worth is 974 crores and our market cap itself is 760 crores and the stock price is where it wasn't way back in 2015, so why not just do a share buyback? That will make more sense. I mean, our net worth per share will increase. Book value per share will increase. By doing that, instead of going for low ROE projects like this hybrid renewable project that we are setting up, I think the log that we did in the door division should have been a lesson for us, not to get into such misadventures.

We are into cement business, cement is a power intensive. So, naturally, once we repel this debt and all those things, there will be a lot of savings in power cost, but keeping our future expansions also, in view, definitely, this project is going to be a revenue contributor to the top line also. That's what we think.

Sir, so now, 4 million times is our capacity, cement capacity, so by when will we reach that volume?

We may not be in a position to utilize completely, but at least to some extent, we will be in a position to utilize for captive purposes, where it can be sold.

Sir, so why are we putting all this upfront investment? Okay, let the Orisa Capex come, because cement plant, the setting of a cement plant also takes some five years. So what is the need to set all this Capex in an unrelated area and that too on upfront? I mean, we can put incrementally.

No, no, that's not possible. You can't keep on adding transformers and see. The power grid has given us 130 megawatts. That is what is available there. So, I mean, if you ask less than that, probably they give preference to the other party. And see, transmission line and all that, many people are going in smaller... You can't do it in number of phases. See, because the transmission line you have to lay from the project site to the power grid substation, and you have to erect a substation, our own cooling substation, and see, with all that, and see, if you start doing it in phases, see, it's not viable, and the power grid also, see, we prefer to give it to balance to somebody else. There's only 130 MW available, only that much they have given us, and we have agreed to set up for that facility. And see, the another feature here is the solar power. You can also store it. Nowadays, the battery is coming up. And once you store it, I mean, you can utilize it. Cement being a continuous process industry, you can utilize it during nighttime also. If you start utilizing it nighttime. Round-the-clock, there may not be any surplus. All the whatever we are generating, all that will be consuming only in existing cement plant systems. And you see, without power, you cannot survive in cement industry. Being a power intensive, and all our competitors, they have their own captive power. In the long run, you see, definitely those who do not have their own captive power, definitely they cannot remain in cement business. That is the background.

Great, sir. Thank you very much.

Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the question queue, please limit yourselves to two questions only. Should you have a follow-up question, please rejoin the queue. Next question is from the line of Vikram Damani from Damani Family Office. Please go ahead.

Yes, please, go ahead. So, one clarification I thought I misheard. Are you setting up 100 megawatt of solar, or is it more than 100 megawatt?

Yes, please.

Hi, am I audible? Can you hear me?

Yes, please.

Yes, I just want to clarify one thing to the first gentleman who came on. Are we doing 100 solar plus 30 wind? Is that what you said?

No, 170, 170. DC capacity will be 170 solar and 31 megawatt of wind.

Your investor presentation says 130 megawatt.

Yes, that will give us AC capacity of 130 megawatt. This is the DC capacity.

And, sir, to the point the earlier gentleman made, we are spending about 125 crore a year on power currently. After we set this up, strip out the bid that we are selling to the market, how much of that cost would come down from the 125 crore?

Approximately, 30-40% that should come down.

So, say we save about 40 crores there, and... How confident are we? Given that it's solar and wind, and we have no plans to set up best, which would additionally cost more money, given the time of the day this power is generated, can we still get 7 rupees a unit at that time?

The procurement cost, we are purchasing at 7 rupees, the peak hour is going up to 9 rupees also, the cost of generation will be around 4 rupees.

So once this plant is cut up, and we get 7 to 8 rupees, whatever it is that we sell in the market, so we expect that our power costs will go down to about 1020 crores per year, from 125 currently. Is that a right way to look at it?

That 1020 cross, it will be much higher. 70 crores.

Yes, 70 crores per annum is going to be saved.

And won't part of that be set off by what we sell in the public, in the open market? So, 40% we utilize in-house, so the 125 that we spend, say, goes off by 50 crores, plus it will increase a little bit due to our capex, but we will get additional 60-70 odd crores from what we sell out in the open market. So, a net power cost should be trending towards maybe 10 crores a year.

Yes, more or less, that's the same number.

Okay, fantastic. Thank you.

Now, sorry to interrupt, Mr. Ramani, may we request you to reach on the queue, sir? Thank you. Next question is from the line of Aditha Nair from Frontwave Research LLP. Please go ahead.

Yeah, hi. For the kiln was around 144 rupees per ton of cement in Q2, which was 22% up from a year ago. So, as I understand, you use a split of pet coke as well as imported and Indian coal. So, I would like to understand why the cost has been increasing, of course, the whole Well, fuel prices have been increasing, but other than that, also what is the split between the pet coke and the coal which you burn together, and how hard and difficult is it for you to change the mix of the two if the Indian coal prices decreases or the pet coke price decreases?

Also, we are using 100% coal only. That's also, we are using mostly, almost 100% we can say, this is Indian coal only we are using.

I mean, no problem at all. See, overnight we can change it. Any percentage also, see, we have that infrastructure. See, that's not a problem at all.

Okay, so that takes away the price sensitivity then. Okay, understood. Thank you.

The line of Pranay Shah from Karen Capital. Please go ahead.

Thanks for the opportunity. So I just want to know that in terms of the timeline of the commissioning for the phase one and phase two, so like how we can see the ramp-up happening on that part. I understand that you have marked February 28th, but what will be about the phase one and then when can we see the phase two?

The market will be commissioned by that time, by March 28th. See, because the power gate, they said they will be ready only by March 28th, sorry, February 28th, end February. So, we are trying to be ready with 100% by that time.

Okay, so we are not doing it on an installment basis, like entire phase 1 and phase 2 will be commuting at the same time, not on phase 1 and phase 2.

Because they are ready to recuse power, and I mean, we have no other choice but to do it in one phase. So that is the reason now we are going in one phase.

Okay. And alluding to the earlier participant's point where he said we are comparing the cost of the hybrid power project, like it's looking a bit as compared to the industry norms. There's a cost elevation. So does it also include a best part to it, or we are not investing on the storage side?

I know the project BESS is not there, but in fact, we are discussing with some technical experts. Our team is working on that. So, if at all we are going for BESS, maybe to a certain extent we will come down, the wind to that extent will come down. But overall, the project cost will remain the same.

Okay, and are you signed on the TTS? And we pay for the 40-60% which will be selling in the month.

We are starting with CTEOL, and from their side, they have initiated work from their end, and we have started, I mean, say our, in fact, we have given the transmission line, say about seven kilometers transmission line, I mean, we have initiated, we have the contract given, and similarly substation also, the work started, and that is the progress, so.

Okay. Thank you. Next question is from the line of Saket Kapoor from Kapoor & Co. Please go ahead.

I joined the call a bit late, but if you could just explain to us firstly, how are our EBITDA margins likely to trend, sir? I'm going ahead for H2, and when we look at our contribution from the three verticals, cement board and the energy part, it is cement that has the largest pie, and boards and other having margins at higher side, but still the contribution is small. So going ahead, what should be the margin profile, and how are these segments likely to shape up, especially the board division? If you could just give an understanding and the seasonality aspect also in terms of the utilization levels for the board division.

Yes, coming to this EBITDA part, so for the first half of the year, cement has given us an EBITDA of about 475 rupees per turn. And for the second half also, we are expecting there can be some improvement to the extent of some 50-60 rupees. Anyway, for the year, it cannot be more than 550 rupees kind of thing. Coming to segment wise, say 84 to 85% we are getting from cement division only, cotton revenue. Regarding the margins, we are at 14% as of now, sports division, bison panel is giving us 14% margin. Coming periods because of the higher volumes of sales and all those things.

In terms of the utilization levels, for the board division, do we have any seasonality impact or is it linear in all the four quarters? We are here in all the four quarters. And the utilization level, sir, for the board division?

So presently, we are close to 60%, so it's likely to improve in the coming periods.

And are these markets concerned that at least only to 60% or is the industry practice that the nameplate capacity we can go higher to only 60-70% or can we high for 80-85% also going there? I just wanted to understand. What does 60%, how can 60% go to 18?

Sir, we are talking of BISER panel. BISER panel, we are at 60%. Cement, we are operating at 75% plus.

I am talking about the board only, sir. Cement, you have mentioned.

Not a problem, see, once we get the order of 70, we can go to 75 or 100% also. Come again, sir. That's not a constraint. Capacity, not a constraint. Market. See, if we get orders, yes, we can go up to 100%.

Sorry to interrupt, Mr. Kapoor. May we please request you to rejoin the queue, sir.

Thank you.

Next question is from the line of Amit Saxena, an individual investor. Please go ahead.

And if so, you know, what are the advantages that we have that we do have higher capacity utilization?

Thank you for cement, isn't it?

Yes, yes, yes. So, we talked about the cement capacity utilization of close to 75% for the first half of the year. So, I wanted to understand whether, you know, in general, I understand that the South has close to 60-65% of capacity utilization. So, our capacity utilization, is it better than the average? And if so, do the company possess some inherent advantages?

We sell it at a premium price. We have a brand image, we have a service advantage, we have...

As of now, I mean, in the south, the capacity utilization has been less than 70% for more than a decade or so.

While there is a lot of capacity, there are a number of smaller plants. See, they are dying down. See, I can quote about half a dozen names who went out of operation. They stopped their operation because it's not working out to them. So all the smaller capacities, less than a million ton plants, more or less they perished in these markets. So, to that extent that additional volume is coming to the existing plant. And if you are talking about our ORISA project, That is not much of capacity. Not many integrated cement plants exist in Orissa. So that is the added advantage I mean we have once we set up that facility there. Call please.

Okay, thank you very much.

Thank you. Next question is from the line of Vikram Damani from Damani Family Office. Please go ahead.

Hi, thanks for the opportunity. Am I out of this? Yes, please. First off, let me start by saying thanks for hosting these calls. It's really useful for us to get our questions answered. I hope you continue doing that. Just a follow-up. I think it was the AGM in 2025, there was one promoter group that was selling shares in the open market, and that selling has stopped. I think, in fact, the same entity just started buying shares from the market again. So, any sort of comments or clarification on that? Can we expect any further movements there? I think it was PN Raju and NCL, I think one of the entities.

Okay, PN Raju, see, he was a promoter, but see, he started a big venture in Amaravati, Andhra Pradesh, assuming that that market is going to boom him and he left right and he borrowed money, send him and set up, built big housing complexes. But he was not able to market because by then the government changed and the Jagan government came and the Jagan government did not encourage that Amaravati area. So he lost very badly. So he sold his shares in the open market. And see, but more or less, the promoters, other promoters, more or less, see, they have purchased similar quantity of shares, but overall, if you see, I think we have maintained the promoters stake is overall is maintained. What are the? 42%. 42%. See, 42% is intact.

Okay, that makes sense. Okay, thank you. Looking forward to the next call.

Thank you. Next question is from the line of Naresh Ranka, an individual investor. Please go ahead. Please proceed.

Thank you, management, for hosting this call. So, my question is on the Vizac. So, we have started this Vizac grinding unit in FY25. So, I would like to know what is the capacity, current capacity utilization in this new, in this Vizac plant, and what kind of, what grade, cement grade are we selling there? And what will be the margin profile EBITDA pattern in that file?

And we are manufacturing three, four different grades. One is, of course, the OPC. Then we are also manufacturing the PPC, the sister we call it. Then we are also making slag cement there. Excellent quality slag cement we are able to make because, see, for that unit, in fact, we are getting very good slag from NMDC. The NMDC, Chet is good, we are getting it. By rain, we are able to get an excellent quality steel crepe, we call it. We are able to penetrate into Varista market. We have launched our product last one year into Varista, and reasonably doing good volumes. And we are also manufacturing GGBS, that is ground granulated. Slag, that is used for mainly the coastal areas, all these RMC units, and some of this concrete for production of concrete, I mean, they mix this with GGBS. That also we have modified coding and marketing from that unit.

Okay.

I'm in for the follow-up question. Thank you. Next follow-up question is from the line of Saket Kapoor from Kapoor & Co. Please go ahead. Mr. Kapoor, your line is unmuted. Please go ahead with your question. You are not audible. Please unmute your line.

Yes, you are audible, please go ahead. Sir, I am just referring to the asset held for sale, which we have mentioned in our balance sheet. What is that attributable to, sir, and what are we eyeing in terms of the realizable value for the sale?

Asset held for sale.

Yeah, this Doors division and fixed assets as well as these inventories have been shown there. Doors division that was closed in the last financial year, March 31st. The assets held in that division is being shown there.

Sir, we have not realized the value for the same as of now?

Not it, not it. That is in process.

So what are we eyeing, sir, in terms of what should be the realizable value for the same?

Bonus model is the amount shown there. In all probabilities, we should realize that amount. So that we have to see.

We have advertised now and we have started getting enquiries.

Sir, our net advance tax payment is, I think, mentioned here at 5.50 lakh income tax pay. So that is totally attributable to the advance tax or is it any net of refund? If you could share what have been our advance tax. Thanks for the first round. for the continuity of this call and also meeting you. Sure, sure, sure. Thank you, sir, and all the best.

Thank you. Next question is from the line of Divya Ishvara, an individual investor, please.

At the outset, let me congratulate you for coming on the call now with the shareholders.

Sorry to interrupt, Mr. Vora, your voice is not clear. Request you to please use your handset.

Yeah, okay. Am I audible now?

Yes, please go ahead.

Sir, we are setting up such a large CapEx plan, and we really know that it's a very sensitive plan that we are going ahead with, which is almost equivalent to the net worth of the company. So are we taking any, who is the UTC contractor that we have in mind, and are we going to take any guarantees from him for the cost and cost overall, and the generation of the solar and the windmill capacities? Because if anything goes wrong on the cost part, we are again in trouble. And if anything goes wrong on the generation also, we are again in trouble.

We are not trying anything new technology. Solar is tested all over. In our units also from the last 10 years or so, we are utilizing solar power everywhere. We are not dealing with any state government. Normally, if you are dealing with the state government, there are a lot of hiccups and there can be some problems. This is the central government and the power grid substations.

I am talking about the EPC contractor who is going to set up this plan. So I just want to know the credibility, check on the contractor who is doing it, and the company taking guarantee on these two counts.

We have not given any EPC contract. These panels and materials, whatever is required, that will be sourced by the company directly. And for the execution part, we will be engaging some contractors.

See, mainly the major problem is acquiring the land. See, that we acquired, almost 418 acres we acquired, and already that is in our position. So, and see, we have our own team, see, they have long experience in this power and wind, and we are directly, I mean, we are not given in to any contractor as EPC. We are doing ourselves. So I don't foresee any problems.

So are you saying that this purchase of all the materials which will be there for this project will come as a project expenses in our books on B directly?

No, your plan is not clear. Is it going to come as a project expenses on B?

And can you throw light on the water? This question remains answered, ROE of this question.

No, no, no. We have not spelt out the ROEs.

Sir, we will take that as the last question for the day, sir. Ladies and gentlemen, we'll take that as the last question for the day. I now hand the conference over to the management for the closing comments.

Thank you all for participating in this earning call call. I hope you were able to answer all your questions satisfactorily and at the same time offer insights into our business. If you have any further questions or would like to know more about the company, please reach out to our Investor Relations Managers at Valarum Advisors.

Thank you. On behalf of NCL Industries Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.