SHREE CEMENT LIMITED (SHREECEM) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Q4 and FI26 Earning Conference Call of Shri Sement Limited hosted by ICICI Securities Limited. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinion, and expectation of the company as on date of this call. These statements are not the guarantee of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, All participant line will be in the listen-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 touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Naveen Sahadev from ICIC Securities. Thank you, and over to you soon.

Thank you, Daneesh. Good evening, everyone. On behalf of ICICI Securities, I welcome you all to the Q4-F526 earnings call of Sri Cement Limited. From the management, we have with us Mr. Neera Jakhuri, Managing Director, Mr. Ashok Bhandari, Senior Advisor, and Mr. Subhash Jaju, Company CFO. So without any further ado, I hand over the floor to the management for the opening comments. Over to you, sir.

Thank you. Thank you, Naveen. Good afternoon and good evening, ladies and gentlemen. I welcome you to the earning call of Shree Cement Ltd. for the quarter and year ending March 26. So, 2025-26 was a good year for us, despite the challenges post-Juris. In March 26 quarter, on a sequential basis, domestic cement sales volume increased by about 25 percent, from 8.48 million tons in December 25 to 10.56 million tons in March 25, while year-on-year growth was at 11 percent. Total volume, including clinker sales, Also jumped by about 9.4 percent from 9.84 million tons to 10.77 million tons, while increasing 23.2 percent on quarter-on-quarter basis. Realizations were at rupees 4725 as against 4652 in December 25, registering an increase of 1.6 percent during the quarter. Operating EBITDA also increased by 34% from Rs. 902 crores to Rs. 1212 crore. EBITDA per ton increased from Rs. 1032 to Rs. 1125 in March 26. Capacitualization during the quarters stood at 66% as compared to 56% during December 2025. For the full year, Including Shri Cement East increased by 2.2% from 35.6 million tons to 36.4 million tons. Our strategy, which we took for the full year, helped in increasing our realization from Rs.4569 per ton last year to Rs.4732 per ton in 2025-26, raising an increase of 3.6%. Total operating EBITDA increased by 11% from Rs. 3814 crore to Rs. 422 crore, excluding a one-time impact of Rs. 80 crore. EBITDA per ton stood at Rs. 1161 as against 1071 last year. Revenue was up by 39% during the year from Since last two months, due to the tension prevailing in the Middle East, sales have slowed down, but with ceasefire, the situation is gradually coming back to normal. We believe once peace is restored, demand would bounce back due to the reconstruction work. The union cement continued with its impressive quarterly performance. Total volume increased on a yearly basis from 10.72 lakh tons. 11.65 lakh tons, recording a growth of 9% on quarter-on-quarter basis. Sales revenue was up by 18% from AED 210 million to AED 247 million on a quarterly basis. The company commissioned its integrated project of 3.65 million tons clinker capacity and 3.5 million tons cement capacity at Kodla, Karnataka. With this, the company's installed cement production capacity in India, including its wholly-owned subsidiaries, increased to 69.3 million tons, standing its position as India's third largest cement group. The work on setting up a cement mill of 2.5 million tons. Thank you. Thank you. The company is rapidly expanding its RMC business with 26 operational plans at the end of 25-26. During the month of March 26, the company has inaugurated 10 new RMC plans. Thank you. Thank you. Thank you. A-rated by leading rating agencies of India. Thank you. Members of the company have recommended a final dividend of Rs. 70 per share, in addition to the interim dividend of Rs. 80 per share for the year 25-26, declared in October 25. Total dividend for the year stands at Rs. 150 per share, representing a 36% increase over the 110 per share dividend paid in 24-25. The final dividend shall be subject to approval We will have members in the next annual general meeting. India's macroeconomic environment remains resilient, supported by steady domestic demand and continued policy focus on infrastructure-led growth. Union Budget 26-27 has reinforced its momentum through a sustained thrust on public capital expenditure with investment in roads, railways, and urban infrastructure expected to drive construction activity and cement demand. Favorable employment conditions, stable inflation, and supportive fiscal and GST rationalization measures further strengthen sector's fundamentals. Against this backdrop, the cement industry remains well positioned to benefit from healthy demand growth in the medium term. However, the geopolitical conflict in Middle East and forecast of moderate monsoon conditions may act as headwinds for the sector and may impact its growth momentum in the short term. With this, I will now open the floor for the Q&A. I have with me Mr. Ashok Bhandari, Mr. Subhash Jaju, Mr. K.K. Jain, and Mr. S.S. Khandelwal to take you through the Q&A session. Thank you, everybody, and again, warm welcome to Shri Semen's quarter four.

Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question, may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requesting use hand press while asking a question.

Naveen, before we start the Q&A, can I make a point, please?

Yes, please. Please go ahead.

Good evening, everybody. I would like you to recall two specific public communications we had made. One was at the end of June 25 quarter, when Mr. Bangar had gone on television saying that he expects the growth for Shree Cement in last financial year between 2 to 3 percent. We have delivered 2.2 percent. The second attention I would like to draw is towards the last quarter's call, where unfortunately Mr. Akhuri could not attend, where I had said that we have moved to a more stable pricing platform, narrowing the gap between the darkmost player and us by almost 20 rupees a bag, 15 to 20 rupees a bag, and now we will be changing volumes. We have delivered on both these accounts, which explains our ethos of delivery and not proclamation. Now, I open the floor for any questions you have.

Thank you so much, sir. Reminded to all the participants that you may press star and one on their touch on telephone in order to ask a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Rajesh Ravi from SDFC Security. Please go ahead.

Hi, sir. Good afternoon. Good evening, and congrats on strong volumes and decent margin performance, continued margin performance. So my question pertains to what's next in terms of traffic and the last cash surplus, which is further increasing going to your strong, you know, internal accrual generation.

Okay, Ravi Bandari here. As far as CAPEX is concerned, as on date, as Mr. Akhuri has already informed you, we are pursuing three distinct places. One is we will be increasing our R&C plans during 26-27. Number two, we are honestly working on railway sidings. And number three, the Medale expansion for which orders have already been placed. However, the total capex estimation for the year 26-27 is approximately 1500 crores, and it should take its own course. We expect to close the year with about 50 to 55 RMC plants, railway sidings, and... Filminary work on Megalase Cement.

Okay, and any thought on your long-term next two-three-year expansion plans? Because this Meghalaya will be a smaller capex.

Look, my dear friend, we are on record saying that we should reach 80 million tons by 2029, but then please understand it's a dynamic situation. We have slowed down the capex because the... Even in the last control of one of our competitors, they have also slowed their aggression, so we will ride the wave as it is. We intend to reach 80 million tons by 29, but let us see.

Yeah, understood, sir. Great. And on the cash surplus, you know, you have increased the dividend for sure. That is a good move. But anything further because we are now close to 9,000 crore or surplus cash?

No, no, no. We are 6,700 plus 8,400 crore, roughly. You are correct? We will keep on finding the ways to reward the shareholders. As well as, if the situation improves, we can expedite our capital expenditure program by front-ending it. You will appreciate that in the last 15 years or so, we have not borrowed, we have generally funded all our CAPEX through our internal accruals, and we intend to do the same.

Understood. Second only, if I look at console minus standalone, just for clarification, would that give the UAE performance, or this would also include your subsidiary's performance, console minus standalone EBITDA?

Now, listen, console has two components. One is Shree Cement East Limited, and one is UCC, which is Union Cement and UAE. Now, Sea Cement East Limited will be the engine for further capacity expansion in India, and UCC, as Mr. Corey has already pointed out, is on track to add another 2.3 million ton of capacity by September 26, and I think it should keep us in good stead.

Sir, given that our growth engine will be the eastern facility, should we not be looking at the company at a console level rather than a standalone level? Yes, indeed.

Indeed, indeed. I take your point. And we have been looking at this possibility. Maybe next quarter onwards, we will talk of console only.

Understood. I'll come back in queue. Meanwhile, you may share the operating number as you release there. Thank you.

Thank you. Our next question comes from the line of Harish Mittal from MKGlobal Financial Service. Please go ahead.

Yeah, thank you for the opportunity. Good evening to the management. My first question pertains to the freight cost, which appears to we have increased by 80 rupees per ton kind of a number on both YOY and sequential wages. Any reason for the same, sir?

Now, what has happened is... That the lead distance has increased by about 12 kilometers over last quarter. We are seized of the fact, and we are working towards reducing this, and maybe bring it back to sub-440 kilometer ton. And, you see, basically, it is completely dependent on the demand supply scenario of each region. So, we are working on it and we should be able to bring it under our control.

Yeah. So, my second question is that in the last call, we mentioned about the depreciation guidance of around 1600 to 1700 crores. So, are we sticking to the same number for F by 27 or is there some upward revision?

Yes, we are sticking to that.

These were the questions I'll join back with you.

Next question comes from the line of Amit Moularka from XS Capital. Please go ahead.

Yeah, hi. Good evening, and thanks for the opportunity. So on the strong volume growth delivery in Q4, which is 11% YOY on cement level is what I see. So going ahead, how do we see it? Like, foliar is obviously at 2, but Q4 is pretty high. So going ahead, like, should we expect? Full year run rate to also now be at similar levels.

Basically, the guidance we have been maintaining is 1% over the average industry growth rate. However, we expect to reach about 40 million tons in this year. 26-27, we should be around 40 million tons. But of course, there are a lot of macroeconomic factors which are beyond our control. But hopefully things will do well.

So, just to clarify, 40 is cement including clinker or only cement?

Look, my dear friend, clinker is not our choice. We would not like to sell clinker because we are losing the value and opportunity. Clinker is basically, for various small, small reasons, it's not a meaningful volume at all. So, please, do not look at clinker volumes at all. Look at cement. Actually, what I am saying is, maybe including 200,000, 300,000 tons of clinker. Otherwise, it should be cement only.

Sure, sure, understood. And generally, on this West Asia crisis, while we know that there is cost inflation that everyone is facing, What are the mitigation measures? I believe now coal probably is cheaper than Petco. So, are you switching into coal more than Petco? What are the mitigation measures, basically?

My dear friend, it's a dynamic exercise for us. We keep on evaluating the techno-commercial viability of various kinds of fuel mix. And as on date, yes, you are right, coal is becoming cheaper than pit coke, but then pit coke prices also cooled down by more than $10 a ton. So we are not concerned with what fuel we are using. We are concerned with landed cost per kilo calorie on air-dried basis at our plant. So, we are constantly on that. Indeed, yes, the fuel cost, which is standing at about 1.60 per kilo calorie as of day, will move up maybe by 10% or something for this quarter. But then, yes, we are, this is our business to keep on maintaining our sustainability and profitability. You may also note that in spite of whatever results whoever has declared, Our EBITDA per ton of cement for the year 25-26 is by far the highest in the peer group.

Right. Congratulations on that. And just lastly, if I may, could you provide region-wise capacity utilizations for you?

Look, my dear friend, all these details, I am now asking Mr. Jaju and Mr. KK Jain to fill you up with these details. I don't have these details in front of me. They must be having it. Mr. Jaju, can you answer, please?

Yes, for this quarter, For North, the utilization is 70%. For East, it is 60%. For South, it is 61%. As company as a whole, the utilization is 66%. As compared to December, the number was 56% for the company as a whole. So, from 56, we have increased it to 66%.

Got it. Thanks a lot. I will just come back in the form of questions.

Thank you. The next question comes from the line of Siddharth Mehrotra from Kotex Eredis. Please go ahead.

Thank you, sir, for the opportunity. With your competitor also sort of going slow on expansion, do you think there's a chance that demand might be sort of impacted in the oncoming year? What are your thoughts on demand specifically for the next 12 months?

Let us understand, my friend. Before the new series of GDP came into play, the demand was 1.3x the GDP growth rate. Now, once the GDP series got, the constituents of GDP got reconstituted, the demand has come to around 1 to 1.1 times GDP growth rate. Now, there are, the bedrock of growth, economic growth, is steel and cement. If India needs to grow at 7%, steel and cement should grow at least in tandem with that, if not more. We expect this year 6.5% to be the GDP growth rate. So we should do about 7.1-7.2% cement demand growth rate. And as I have said, that should be the industry as well. We should go at about 8 to 8.5%, but you can never say. So let us see how the GDP moves. Thank you.

Thanks for your thoughts on this. Just another question. So, we've seen a fair amount of cost inflation, as you rightly pointed out. So, I just wanted to check, what are the prices looking like this quarter? Have we been able to mostly ask those on to the customers, or do you think we need more price hikes to...

No, no. No, no. Listen. The fundamental principle of any business is ye dil maange more. So, let us be very clear that whatever we can pass on on a sustainable basis to the market, after absorbing our cost push, we should be alright. We will aim to increase the profitability. Let us see how it pans out. And in any case, if the war in Middle East gets over in the next two months, the fuel prices are about to come down. So, it is a completely dynamic situation as on date.

Got it, sir. Any chance you could provide us some color on the hikes which have been taken, say, for example, in the past month or so?

About 25 rupees a bag.

And this is across regions or...?

I don't have that kind of a breakup, but South is okay, and you can, of course, ask Mr. Kamlesh Jain or Mr. Zubhaj Jaiju to send you a mail separately of this.

Got it, sir. Just one last bookkeeping question. The sales sticker that you've mentioned, that includes volume sales from our wholly owned subsidiary as well?

Subsidary is only in India. Yes, yes, yes. Yes, it does. It does, it does.

Okay, so it is a sales from the Indian operations.

Okay, so that 10.77 number is including 370. Right, got it. Thank you, sir. Thank you.

Thank you. The next question comes from the line of Pinakhin from HSBC Bank. Please go ahead.

Thank you very much. So my first quick bookkeeping question is that what is the net cash balance as of March 26?

We are at about 6,700 crore in investments and 1,700 crore cash. Cash and bank, yes.

Got it. My second question is, sir, on capacity expansion. So, 69 million tons capacity as of March 26th, and overall annual full-year utilizations would be in early 60s. Now that 80 million tons target by S29, given the utilization levels that are there, can we expect this to get pushed out by a couple of years?

I can't say it's too early to comment. We have slowed down. I have given a guidance of 1,500 crore only for CAPEX in this year. Let us see how the situation plays.

Got it. And, sir, this value over volume, and now we are focusing on volume. So, is it fair to say that between volume and price and EBITDA margins, while you are chasing volume, EBITDA person is also something you will keep on focusing on and not let it go down much?

Look, my dear friend, let us understand. Q2 and Q3 of last financial year, we suffered to pull up our prices. We did not aggressively sell. And once the prices have established to a level where the delta between the top players and us has reduced significantly, we don't intend to give up that advantage. We would like to have now our fair and proper market share. That doesn't mean we'll go into a price war and push volumes. Profitability is the prime focus. Volume and price, price always the market gives. Volume is what we are capable to produce. This is the situation. How it will put pressure on EBITDA? We have never given our history, given any guidance on EBITDA per turn. We have never given you any guidance on sale price per turn, because it is not in control of any commodity manufacturer, leave aside cement. It is a completely macro-driven equation. And we would not like to hazard a guess. We can say what our costs are, we can say what our aspirational volumes are, and balance it, whatever will happen to everybody will happen to us as well.

Got it. This is very clear. Thank you very much, sir.

Thank you. Next question comes from the line of Ritesh Shah from Investec. Please go ahead.

Yeah, hi, sir. Thanks for the opportunity. Sir, a couple of questions. First is, if you could, sir, put some details on the northeast expansion, specifically around limestone sourcing. If we have worn a mine, what is the auction premium that they have, what we have paid, and any indicative timelines on the expansion that we have indicated?

Ugh. By the laws of local government in Meghalaya,

Sir, the premium that we have paid, and if you have secured any incentives for this project along with the timelines?

Mines are not auctioned. They are allocated, yeah? Allocated, okay.

And, sir, incentives?

No, we have not yet received any confirmed paper document from the government of Meghalaya on incentives to be given. Yeah, we have approached them, but we have not got any confirmation from that. So this project is, to our estimate, strongly viable even without incentives.

And sir, how should we look at the capex number? It looks very high, 1800 crores. Is it because of the region or is it something different?

No, my dear friend Bhandari here. The 1800 crore capex apparently looks very high. But then as Mr. Khuri just pointed out, we have three blocks. We have prospected one block which gives 600 million ton. Ultimately, we intend to reach 4, 4.5 million ton of capacity there. But then once you start looking at setting up that kind of a capacity, we are starting with 0.95 million ton of clinker and 1 million ton of cement. But we have to create the necessary infrastructure, acquire the land, draw the power lines according to our ultimate plan. So a lot of brownfield expansion expenditure gets front-ended. And that is why this figure is looking so high.

Perfect, sir. This helps. Sir, my second question is on the cost levers. Any variables that you would like to highlight, say, over next two, three years wherein we can actually improvise on the cost? So, probably if you can touch upon any targets on WHRS, second is RE, third is clinker factor, and fourth is railway. I think when I met you last time, you had indicated the railway volumes we look to double it over next few years. Some numbers over here also would help, sir. Thank you so much.

So, no, I mean, no company runs out of arguments by which it can better its performance. She, of course, has... Different sites. Thank you very much.

Sir, sorry, thanks for that. Any numbers that you would like to qualify for WHRS and RE, given we are already doing so well, do we have further room to improvise?

For WHRS, all our kilns for today and for in future will be linked with WHRS. Even currently, all the kilns that we are commissioning are having WHRS facilities. For RE, very deliberately, I am not giving you a number today. We should be in a better position. And so wherever there is an opportunity, we will continue to invest in renewable energy, solar included, to make sure that we take advantage of this to further better our performance.

To supplement Mr. Akhuri's statement, we are also quite aggressively exploring the... The possibility of a viable battery energy storage system, BESS, we have started experimenting on a few things. If that succeeds, then there will be a huge potential of setting up further RE capacity, especially in solar.

Perfect. And that clinker factor, what it is right now, and do we have any aspiration on this number, say, two years out?

I'm giving the line to Mr. K.K. Jain. He will give you the numbers.

Yeah, for the current quarter, the clinker factor is 64.8% against 63.9% in December 25 and 64 in March 25.

Answer, any target for this two years out?

Well, that is dependent on what kind of market we are addressing too. There are some markets, we are still, they are still on different kind of blends. Let me, Kody, explain you further.

For each product, we will be fully optimizing our clinker factor. Now, the future will depend on the product mix, yeah, and product mix will depend on the kind of segment that we will continue to cater to. So, if it is OPC, then, of course, there is a result in a lower clinker factor. And if it's PPC, it's a better clinker factor. But for now, I think our clinker factor is best in class in the industry, to my mind, except people who use slag.

Probably we have the best linker factor.

Perfect, sir. This is very helpful. Thank you so much. All the very best, sir. Thank you.

Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participant, we request you to kindly limit your question to two questions per participant. If you have a follow-up question, please rejoin the queue. Our next question comes from the line of Rashi from Citigroup. Please go ahead.

Thank you. Just on the cost, sir, what has been the cost movement in this quarter, cost of production versus the last quarter?

Rashi, let me address this up front. As I said, our per kilocalorie landed cost last quarter was 1.60. We expect to creep this, creep up to 1.76 or 1.80, and we will, Jaju will share the exact calculation with you, but then please understand that we are trying to keep on increasing our thermal efficiency, our per kilo calorie consumption in last, no, no, not the cost, the quantum of calorie. Yeah, we used 733 kilocalorie in this quarter, vis-à-vis 741 in previous quarter. So we are continuously trying to increase this. And if we, sorry, decrease this, and if we decrease this, then the quantum throughput also falls, isn't it?

Got it. First, for this, so besides the power and fuel cost, you would have also witnessed an increase in packaging costs. So on a cumulative basis, what kind of cost increase are you talking about?

Well, you should roughly take about 150 rupees a ton. That is about seven and a half, seven and a half. Yes, Mr. Jai.

Yes, there is some increase in the pecking cost in the quarter. The impact is the mass, and it is around in, if we see the quarter figure, then it is increased by 20 rupees per ton. And now, which per ton?

Per ton, I mean, say, one minute impact.

Ah, okay. Ah, ah. And now, going forward, it would be around, say, 100p per time, there will be an increase.

So on a total cost basis, just going back to the fourth quarter, you've had an increase in the power cost, you've had an increase in freight as well as in packaging. So on a blended cement, cost of production would have gone up by how much during the fourth quarter sequentially?

Would be, should be around, say, 150 to 200 per ton, including packing and the raw material cost as well as this power fuel and all.

This is in the fourth quarter.

No, no, in the coming quarter. In the fourth quarter, I must say, there is no, in the fourth quarter, I must say, the impact of, is around, say, Beba! 20 or 30 rupees in the fourth quarter, compared to December.

Okay, so total cost increase is 20 or 30 rupees versus the third quarter. Okay, and just one, what was the percentage of blended cement and trade cement during the call?

It's 64%. 64% was the trade sale. Thank you. You wanted the trade sale, right? No, blended sale. Blended is around 60. Blended is 62%.

Blended is 62% and trade is 64%.

Correct.

Thank you.

Rashi, have you done with your question?

Yes, I'm done. Thank you.

Thank you. Our next question comes from the line of Parvish Kazi from Novama Group. Please go ahead.

Hi, please, sir, and thanks for taking my question. I'm sorry if you've answered this question earlier, but I just wanted to get what was our E-Cal cost in Q4?

Come back again, please.

Sir, what was our E-Cal cost in Q4, if I want to say?

Sir, 1.6. 1.60 per kilocalorie landed at our land.

Sure. And just one more question. What would have been our fuel mix in Q4?

For Q4, it was pet coke was 54 percent, coal was 32 percent, and alternative fuel was 14 percent.

Sure, sir. Thanks, and all good luck. Thank you.

Yeah, good evening, sir. My question is on your pricing gap closing with the last year. You talked about closing 20 rupees gap. So, is this similar across regions? And is this the stabilized level? Of course, you said there is always scope to improve. But how is this different across regions?

Now, let us understand, Prateek. 15 to 20 rupees is the delta decrease. Across region and we intend to keep it, we intend to compress it further. But then demand plays a major role in pushing the price rises. So let us see how the demand pans out.

Sure.

And this pricing gap reduction has happened over the past three quarters, right? Since then, your volumes kind of came out.

Over the years, there has been a continuous exercise. Till third quarter, we had restricted our volumes to have the price gain. And fourth quarter, we have done all right. The pricing is fine. The volumes are good. And we intend to remain like that.

Sure. Other questions on your RNC business revenue for Q4 and full year and EBITDA for Q4 and full year?

90KR and the volume here is 1.99 lakh m3.

R.M.C. is at a very nascent stage. It just started, yeah. We are a very new 26-plant company now going to 36. I think we will take a few more quarters and maybe some years.

The revenue was 90 crores for Q4 and for Pulli Air. What was the number?

It is 246 crores.

Sure, thank you.

Leave them a question.

Thank you. The next question comes from the line of Polkit Patney from Goldman Sachs. Please go ahead.

Sir, thank you for taking my question. I have just one question. You spoke about packaging cost increase of 20 rupees already done and another maybe 80 to 100 rupees in Q1, and there's another 150 to 200 rupees of fuel cost increase. Sir, would that be it? I'm just trying to understand what is the kind of inventory of fuel that we have right now at the plant, and does it fully reflect in Q1, or Q2 will see further inflation in that?

No, wait a minute. As far as Q2 is concerned, we cannot comment. Can you tell me when the war will be over? No, sir. Hear me out, please. Hear me out. At the moment, we are saying that our per kilocalorie cost in Q4 was 160, which is likely to go up by 10 to 12 percent in Q1. Q2, we are not in a position to comment. There are no comment. Available, floating cargo is available, and the state of hormones is playing its own spoiled sport. You see granules from... Thank you. Depending on the weighted average cost of consumption, which we use, or which most...

Sir, I fully appreciate that. The reason I'm asking this question is, some of your peers have highlighted that they maintain between 60 to 75 days' worth of fuel inventory, which means this increase.

Let me, let me, let me, let me, let me, one second. Okay, go ahead. That they talk of 60 to 75, we have never gone below 90.

Sir, in which case the fuel cost should hit us in the second quarter, right? I'm a little confused, Fauri, help me understand this.

I said that people are saying they carry 60 to 75 days of inventory. I say our coal inventory doesn't go below 90 days.

Sir, so if the war started end of Feb, early March, then it is not before the last month of this quarter that increased cost should hit you, right? Right now, we should be operating...

No, my dear friend, you are slightly mistaken. The charge is on weighted average cost, not on procurement cost or historical cost. The weighted average cost with every shipment keeps on increasing if the fuel price is rising. So, yes, the major impact will come in the third month, but then every month you will have some incremental effect.

Precisely, sir. So, in which case, whatever is getting ordered today, the second quarter impact of cost will be much higher. That's what I'm trying to assess.

That is, you are assuming that the same pricing will sustain, that the war will keep on going, that all shipment chaos will be there. I am not in a position to hazard that gas at the moment.

Fair point, sir. It's a point well taken. Thank you.

I would like to clarify one thing. There will be, say, cost impact of 150-200 rupees in the second quarter as compared to the December, March 26. This is in totality, including the pecking bay cost in June quarter. Not separately for the call and the pecking bay.

This is cumulative cost.

Okay, very clear, sir. Thank you.

Thank you. Next question comes from the line of Raga Maheshwari from Acura Securities. Please go ahead.

Yeah, hi. Good afternoon. Good evening, sir. Firstly, congratulations on good set of results. Sir, my question is on the firstly, the trend situation in the northern market for the flyash related because due to the continued health apex is going into the next for the FI 27 and 28 into the northern market. How will you see the flyash availability in the north? Is it the sufficient flyash available because we are expecting there is no major new power price coming? So how is the flyash situation especially to the north?

No, I don't understand, brother. I don't understand what you're asking. You're asking how much flyers are available and flyers will be constant. Yes, sir.

Yes, sir.

Aasw, bhai, aisa hai, kyonki aapka assumption ye hai ki fly ash is the only cementitious material which we can use. Joki galat hai. There are various other cementitious material which can go into PPC, and we are keeping on scouting for all such alternatives. So, because the thermal capacity is not here, it will be fly ash, it will be fly ash constant. There are so many different things.

Got it, sir. So what kind of, uh, Jandan Ji, we use, sir, other materials other than clients for the PPC?

Eh, bhai, suno, yad. Uh, dalgatta ho, koi din, baihtke gapma renghe, tab sab sab jayenge.

See. Okay, sir. Thank you.

Thank you. Next question comes from the line of Girija Ray from Nirmal Bank. Please go ahead. You may please proceed with the question. Thank you. As there is no response from Girija Ray, we'll move forward to the next participant. Our next question comes from the line of Rajesh Ravi from HDFC Securities. Please go ahead.

Just a follow-up question, sir, on the operating number, while most of them are already answered. What was the lead distance that you mentioned in Q4?

I think it was 459 kilometers.

455 kilometers, okay. And, yeah.

What is the exact number? 457. 457, sorry.

Okay, and this you're looking to go back to 440 and subsequent quarters?

Yes.

And the price is even lower. Understood. Yeah, yeah. And lastly, on the cement price hike across market, in your operating market, this 150 to 200 cost inflation that you have seen for Q1, are they fully covered in the price increases which you have taken in the month of April?

No, no, that's not easy, brother. Look, now, let's explain this a little bit. The price increase has anticipated cost increase up to June. Do you understand? But the price is dynamic and the pricing situation is dynamic and the demand is dynamic and the demand effects. So this is not much in case of today. Yes, we are generally covered, but at worst movement, I will tell you in the next quarter. We don't proclaim, we don't proclaim.

And, sir, given the steel prices have also struck off significantly, and there are across the world inflationary impact on construction materials, and there have been disruption even on labor availability. Have you seen demand, you know, disappointing in the month of April and May so far?

15 April, everything was fine, but after that, there was a little slowdown. What are you talking about now?

Agreed. Great. That's all from Mahirin. Thank you.

Naveen, are we through? Or you have some questions?

Thank you. A next question comes from the line of Naveen Sahadev from ICSA Securities. Please go ahead.

Yeah, just last few people are there for the questions. So, just two questions from my side. So, in the initial comments or maybe to the answer of one of the questions, you said, I mean, Akuriji said that the incentives for Meghalaya, though we are like, you know, working with the state, but nothing is promised as yet. Is this a new policy or any change in policy for the state or it's? Just help me understand this because other companies which are operating...

No, no, no, no, no, no, no, no, no, no. Incentive, who can ask from the people? Can ask from the people who can ask from the people? No one has any big money from the states. So we always have to put the incentive for us to keep our incentives, how much cost, how much adverse conditions are. All of them have an internal procedure. They have an industrial policy or their state investment committee. That's how we keep our incentives. If we have any answer or not, we will tell you that we will get so much of incentives.

Understood. So my second question was about the north region. I think sometime back, Bangushji, in a TV interview, had said that they might lose some market share in the north region because of the several, I think, upcoming capacities. And this quarter, our volume growth has been definitely like, you know, Much better than the previous quarters. And also, the strategy is very consciously towards focusing on volumes.

Now that we have... No, I said that we sacrificed volumes to reach a price point, and once we reached that price point and it became acceptable to all, we sold as much as we could sell. So, we didn't change the volume. We didn't change the volume because we had to make the price point. Now, the price point came up and we thought, yes, the price point is okay. So, the amount of demand is enough, what is the problem? So, it is not that we are reinventing the equation value over volume to volume over value, no. Profitability is our main concern. We'll remain focused on profitability. Now, how will it happen? What will it happen? The time will only save. We don't have enough time to tell you how long you can tell them. It seems, Mr. Vangande said, that the competition pressure is big. But in the past, everything is in cost pressure. What will the cumulative effect be? How will I tell you?

That's right. That's right. Thank you.

I mean, are we through? It is only one hour here.

Yeah, yeah. We are through, sir. We can conclude that. Thank you.

That was the last question for today. I now hand the conference over to the management for the closing remarks. Thank you, and over to you, Tim.

Thank you, everybody. Thanks for this, for the call, and thank you for participating. We must assure that... Thank you for wishing us well on this 11% volume growth. Gold and Shree Cement. As you have seen, we have now crossed 22%, up by about 40%, from 15% to 22%.

There is an increase in the sale in last year from 9% to 22% in the business model.

Yes, from 9% to 22%. So we are doing everything possible on using all the levers, be it on the cost or be it on the revenue side, to better our performance in the coming quarters. Inshallah, whatever is the macroeconomic conditions, you will be impacted, but within those conditions, Sri will do its best to continue to deliver some superior results. Thank you, everybody, and have a very good evening. Bye-bye.

Thank you so much. Ladies and gentlemen, on behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.