Star Cement Limited (STARCEMENT) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the earnings conference call for the quarter and year-ended 31st March, 2026 of Star Cement, hosted by Philip Capital India Private Limited. As a reminder, all participants will remain in the Lushkin-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 the operator by pressing star, then zero on your touchstone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Vaibhavagarwal from Philip Capital India Private Limited for opening remarks. Thank you, and over to you.

Thank you, Ryan. Good evening, everyone. A sincere apology for the delay due to some connection issues. On behalf of Philippe Capital India Private Limited, we welcome you to the Q4 and F526 call of Star Cement Limited. On the call, we have with us Mr. Tushar Bajanka, Deputy Managing Director, and Mr. Manoj Agarwal, Chief Finance Officer at Star Cement Limited. I would like to mention on behalf of StarCement Ltd. and its management that certain statements that may be made or discussed on today's conference call may be forward-looking statements related to future business developments and anticipated company outcomes by its management. Such statements stated on today's call would be based on StarCement's current management expectations, and these statements are subject to a number of risks, uncertainties, and other important factors which may cause the actual developments and results to differ materially from the statements made. StarCement Ltd. and the management of the company assumes no obligation to publicly update or alter these forward-looking statements, whether as a result of new information or future events or otherwise. I will now hand over the floor to the Management of Start Investment for the opening remarks, which will follow the introductory Q&A. Thank you and over to you.

Thank you.

Hello. Yeah, hi. So, hi. Good afternoon, everyone. My name is Tusha Bajinka, and I'm the MD of StarCement. I welcome you all to the conference call of F526, quarter four. I would like our CFO, Mr. Manoj Agarwal, to give a remark regarding the numbers, and then we can start with the Q&A.

Yeah, thank you. Hi, friends. Very good afternoon. I, on behalf of StartMate Limited, welcome you to our con-call for discussing our number of Q4 ending FY26 and for the financial year 26-27. Now, I will just take you through the Q4 number followed by the financial year number. Starting from clinker production, during the quarter in March 2023, we have produced 11.59 lakh ton of clinker as of this 11.38 lakh ton same quarter last year. So far as cement production is concerned, we have produced 16.45 lakh tons this quarter, as against 14.79 lakhs in the same quarter last year. Now, I will take you through sales volume. During the quarter, we have sold 16.18 lakh tons of cement and 1.15 lakh tons of clinker, as against 14.75 lakh tons of cement and 0.57 lakh tons of clinker in the same period last year. This is as far as cement and clinker sale is concerned. As far as geographical distribution of cement is concerned, in Northeast, we have sold around 11.27 lakh tonne as against 11.02 lakh tonne during same quarter last year. And as far as outside Northeast state is concerned, we have sold 4.91 lakh tonne of cement this quarter as against 3.74 lakh tonne during same quarter last year. In terms of blend mix, it is 18% of OPC and rest is PPG. These are the quantitative number of the quarter. Now, I will take you through to the financials. The total revenue figure for this quarter is around 1174 crore, as against 1052 crore same period last year. As far as EBITDA figure is concerned, this quarter we have done in EBITDA, excluding exceptional item, it is around 334 crore, as against 268 crore last year. Profit after tax is 147 crore as against 1.22 crore in the same period last year. On Perth and EBITDA front, it is 1871 during this quarter as against 1748 per 10 same quarter last year. This is worth our quarterly number of this fourth quarter. The total revenue sugar for full year is around 3,776 crore as against 3,163 crore in last year at 0.25. As far as EBITDA figure is concerned, during FY26, we have done an EBITDA excluding exceptional item of around Rs. 955 crore as against Rs. 589 crore last year. Full year profit after tax is 390 crore as against 169 crore last year. On per 10 EBITDA in front, it is 1738 during FY26 as against 1245 per 10 in FY25. These are the quarterly and full time numbers. Now, I request all of you, if you have any query, you can ask the same, and I will request Rabo to moderate the same, wherever required. Thank you. Rabo, now it's over to you.

Thank you. Ladies and gentlemen, 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 remove yourself from the question queue, you may press star and 2. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Har Shmitzal from MK Global Financial Services. Please go ahead.

Yeah, thank you. Good evening, sir. So, I have multiple questions today, and firstly, congratulations on a great set of results. The first question is on the volume. So, for FY26, the upper end of your life, five and a half million times. Any guidance?

Harish, I'm sorry to interrupt you, but your audio is not clear. Could you please use your headset?

Yes, I'm okay.

Hello. Hello, Ash.

Ahad Shah, I would request you to please join back the queue once your audio is clear.

Hello, am I audible now?

Yes, now you are. Please go ahead.

Yes, yes. So, congratulations to the team for a great set of results. I have multiple questions today. My first question is on the volumes. So, we have achieved the upper end of the guidance which we've given last year of 5.5 million tons in FY26. Any fresh guidance or any new guidance for FY27, sir?

So, what we are looking for in the coming year is about 10 to 12% growth. So, I think that is what we are expecting. Yeah, so I think it should be, you know, the volume that we did, which is about 5.3 and 10 to 12% growth on that.

And how is the current demand scenario in April and in May? Is it supportive of the run rate? I know it's too early, but how is the current scenario, sir?

So, the current scenario right now, because of April, there was elections, you know, in April and May, and Assam, and also West Bengal. So, I think that demand was a bit sluggish because of that. I think we do see a pickup in May. April was a bit sluggish. So, it's like what you said, I think it's too soon to probably predict how the year would go. You know, it really depends on how June also goes, right? So, I think we'll probably be able to give a better estimate of how the overall numbers will turn up in the next quarter, once we've seen four, five months, I guess.

Sure, sir. So, the second question is on the incentives. There's a certain reduction in the incentive for quarter three and quarter four, given the cut in the GST rates. Can we extrapolate the quarter four incentive accrual for full year FY27?

So, I think the overall subsidies in FY27 would reduce by about 40 to 50 CR compared to, you know, quarter, compared to FY26. Right? So I think on an absolute level, that's what we can expect. And then, you know, it will, of course, have its own certain EBITDA impact on productivity.

So in absolute numbers, can we say around 160 to 170 crores in FY27?

No. Currently, we have done it in 184 crores of subsidy. So what Chicago is saying, 40 to 50 crores, somewhere with a 144, 145 to 150 crores. Sort of thing you can estimate for the coming year.

140 to 150 crores. Am I right? Yeah. Yeah. Yeah. Yeah. Also, sir, are we sticking to our CAPEX guidance of 500 crores in 500 to 600 crores in FY27 and 1000 crores in FY28? Or is there any upside risk to this? Given that we want to commission.

Yeah, so I think... Right now, what we're doing is that we are, you know, we've applied for our ECs and all the permissions, and we're acquiring land right now in Nimbol, in Haryana for a grinding unit, and also in Bihar for a grinding unit. So I think in October around, we should be able to complete our approvals as well as the land acquisition in these three places, and then we will start our CAPEX. So I think the estimate for FY27 will be about 600 to 700 crores. Uh, you know, given we follow these timelines.

And in FY28, sir?

In FY28, I think the estimate would be about 1,500 rows. 1,500 crores, right, right.

Okay. Sir, last question before I fall back in the queue. We have seen an increase of 240 crores odd in the non-current investments. Sir, what could that number be?

Yeah, that was because the bond, this is the liquid asset sale, but as per the India, we have to show it as a non-current asset. But these are all the liquid assets less than one year, for less than one year. Okay. Okay.

Okay. Got it, sir. Thank you. I'll follow that in the case. Thank you.

Thank you. Participants, please press star and 1 to ask a question. We take the next question from the line of Hardik Goyal from Union Mutual Fund. Please go ahead.

Hi, sir. Thanks for this opportunity. I'm going to sit over the table. So I have a couple of questions. So firstly...

Harthik, I'm sorry to interrupt you there, but...

Hello, is it better now? Yeah, so on the cost front, we have seen that there is an industry-wide impact of increasing fuel costs. But how immune are we to the increasing fuel costs due to our agreement of coal purchase with coal India and its dependency on pet coke and other prices?

So, I think right now, in quarter one, we would see an increase in the fuel cost. I think that is mainly because not, you know, I think it's both, I think the cost increase in the fuel and also the shortage, right, because all the rakes right now, you know, from the railways has been diverted to the power plants, right, thermal plants. So, I think the availability of coal is in short supply, and I think that is leading to the increase in the price of coal as well. So, I think there would be an impact of, I think, about 10 to 15 paisa per gc cost in coal. I think that should be a short-term increase. I don't think it should be a long-term structural increase, but they will be increased because of all the rakes being diverted, and then we have to arrange coal from elsewhere, And then, you know, and then that would be the best. So, that should be probably quarter 1, quarter 2, and then I think it should again come back to where it was in quarter 3, quarter 4 onwards.

So, on your expansion, what is your priority right now in the Bihar, Nemo and Haryana, and for the Bihar unit, what is our expected timeline, and will we source the clinker from the Megali unit only for the Bihar plan?

Yes, so I think our timeline for the Bihar plant is roughly about two years from now. This includes the land acquisition and then putting up the greenfield. The clinker would be going from Nihale itself. What we have planned to do is that we have a Selcher unit which also has a railway siding, which is about 67 kilometers away from our clinker plant. We will send the clinker to the Selcher railway siding and we will load our clinker from there and we will send it to Bihar. That's how we have planned the entire logistics around it. And initially, definitely till the time we don't have any opportunity of putting up our clinker plant in east, Bihar's landing unit will be served from Meghalaya.

Well, thank you.

Thank you.

Thank you. Participants, please press star and one to ask a question. We take the next question from the line of Shravan Shah from Zolat Capital. Please go ahead.

Hi, sir. A couple of questions, sir. When we said 10 to 12 percent volume growth, so this is on pure cement, we are talking and not including the clinker.

Yeah, the estimate that I was suggesting of 10 to 12 was mainly on cement. It did not include the sales of clinkers.

So, clinker sale broadly would be just similar, 3.5 lakh that we have done in F26, a similar run rate will continue?

I, you know, so I don't have necessarily a good estimate of that. Probably it should be similar numbers, but it should be quite slattish. I don't think we will see a growth in the sale of clinker. What we are now focusing on is basically seal of cement only, and we're just trying to make sure that we realize a better rate in clinker. So rather than on the volume of clinker, I think what we're trying to optimize is on the, you know, on the relation that we're getting by telling clinker.

Okay. Three data points are trade sales, CC ratio, lead distance, and KTL cost for foot quarter.

Okay, so trade share is about 78%. Last year, same quarter, it was 81%. So there was growth in non-trade as compared to trade relatively. Then I think the second thing you had asked for was the lead business, right, which has reduced from 229 last year to right now about 220. It has reduced by about 9 kilometers. The third thing you had asked for a KCAL cost, right? Which is about 1.24 rupees for GCB. And what was the fourth thing that you had asked?

CC ratio per fourth quarter.

Okay, CC ratio per the fourth quarter is about 66.2%.

Okay. So, and another just to clarify, so broadly, now the three upcoming plants, the Rajasthan one, Nimbol, and the Bihar one, and Umranc two. So, we were looking at... Close to 6 million 10 clinker, 9 million 10 cement, so, and 4,800 crore overall capex, and this broadly will be starting by H2FY29 to start of FY30, so, and just in the previous answer, you said that the Bihar grinding, which would be, I think, 2 million 10, would be coming two years from now, so, shall it mean by FY28 or maybe Q1, Q2, FY29?

Yeah, so I think it means like first quarter of F29 or second quarter of F29, right? So around that time, we should be getting the Bihar running unit. And we have, what we've done is that we've prioritized Nimbol, Haryana and Bihar. And then we've also, of course, applied for permissions and everything in Umdrangshu and in Jhwarat. And, you know, and that CAPEX will start a bit later than this CAPEX. And in the next four to five years, I think we plan to do all these five CAPEXs, which includes Nimbol Klinker Plant. It includes Umrahamsu Klinker Plant in Assam. It includes a grinding unit in Shurahat. It includes a grinding unit in Bihar, and it includes a grinding unit in Haryana.

Yeah, so for Rajasthan particularly, so broader, whatever we discussed last time, the 3 million ton clinkers and 5 million ton, both including the split grinding and the 2,500 crore capex plus 10% variation. And so that number remains intact. And broadly, we were looking at two to kind of start by September 28. So similar kind of a 1H29, the same way we are both would be coming together. That's the way we are looking at it.

Yes. I mean, that's the target, but it just depends on when we get all the approvals. What we're expecting is that we should be able to get all the approvals by October and we should hit the ground. But if there's any delay by a month or two on the start date of the case mix, then I think in the next con call, I'll inform.

Okay. So broadly, our request

that you please join back the queue for follow-up questions. Thank you. Participants, please press star and one to ask a question. We take the next question from the line of Jainam Shah, an individual investor. Please go ahead.

Hi, sir. Thank you so much for this opportunity. I just wanted to ask that previously we had maintained around four to five years that it would take for a new competition to enter. But what we see is that Shri Sement, Ambuja, all have, you know, come up with plans to enter into northeast region. So do we still stand by that timeline?

I think broadly, it should take about three to four years for someone to enter. I think that is still what assumption I have in mind. And I think we'll just have to see in the coming quarters how things change if they do. So right now, I think that is the estimate that I have in my mind.

Okay, but so because we have to some extent extended our timelines for the projects that we had, so do you think that with all the things that are going on currently, you know, companies would prefer entering into new regions where, you know, the pricing is better, EBITDA per ton is better, so do you think that is a risk now for, you know, new companies, mainland players to enter into the northeast region? So what I was saying is that with all the, you know, West Asia disruptions that are happening right now, and we still provide better pit-up or tan in the market, do you think that, you know, people, sorry, the companies will try to, you know, fast-track their expansion into different regions, for example, Northeast?

See, like, I mean, they would just go with the pace, which is practical on ground, and they would try to do their best. I don't think the West Asia crisis really pushes them to come to Northeast. And I think irrespective of the margin was good for them to try to come to Northeast. And, yeah, I think Northeast as a market overall compared to the market that they are serving is relatively small. So I don't think that their overall numbers will change by entering Northeast that way.

Correct. And the other question that I had is that we are planning to enter into North. So at what point do we start marketing our product? Because we would be quite a new brand there. So what would be the timeline for that? When do we add more dealers for that particular region?

I think we will start creating brand awareness. I think at least about eight, nine months before we actually start the commercial production. Right, I think any branding that we do before that may be a bit premature.

Understood, understood. Thank you so much. Thank you for your attention.

Thank you. Participants, please press star and 1 to ask a question.

We take the next question from the line of Amit Gupta from ICC Securities.

Please go ahead.

Good evening, sir. Am I audible? Sir, my first question is, what is our premium cement share for this quarter?

The premium cement share for this quarter was 15.1%.

Okay, and second question is, how has been the pricing trend in April and May as compared to the March exit? Has it improved flat or what has been the trend?

I mean, in Northeast, it has improved slightly. In outside, also, I think there is a 10 rupees improvement which has happened. But, yeah, I think that's what has happened. Outside, I mean, basically, West Bengal and Bihar.

Okay, so in Northeast and outside also, 10 rupees per bag has been the increase.

In Northeast, I think it may be about 7 rupees. Outside Northeast was about 10 rupees.

Okay, thanks. These were my questions.

Thank you. Thank you. Coruscant, please press star and 1 to ask a question. We take the next question from the line of Shravan Shah from Dollar Capital. Please go ahead.

Yeah, sir, just again to clarifying on the CapEx front. So, can you clarify the CapEx? Right now, we are envisaging for Rajasthan, Bihar, and Ubransu individually. And in terms of, if you are planning to start by 1H FF29, how we will be individually and total will be spending in FF27, FF28?

So, you know, I don't have the individual breakups of, you know, the capexes per project by year. What I can do is that in the investor presentation, I can attach a slide and, you know, and probably there, I think you'll probably have a more comprehensive view of, you know, the capexes, different capexes of different projects by year. I think that chart we can give in like a week's time and we can post it on it.

Yeah, got it. And second, Manasad, the cash as per you, because the non-current investment has increased, so what's the cash as per you? Gross rate, we have as per the balance rate, but cash.

Total, 583 crore is the gross date. Total date is there. And the net debt is 200 crore. So, there is 383 crore up there that we have a cash in the form of bond or mutual fund. It is, or it's been deposited with the bank.

So, it is exact 300 crore or some… 383 crore.

It is 383 crore.

383 crore is a cash and cash.

Yeah, you can pay the liquid.

Yeah, I got that. Second, sir, you mentioned that in Q1 and Q2, whatever the rack shortage and some increase, so we are looking at 10, 15 pausa, increase in the fuel cost. So, this will be till 2Q also, or only just July, August, and then it will be coming to the normalized level.

Now we are facing that auction prices have gone up. Now the rack availability is also an issue to do with the scarcity in the power because they are supplying the power plant. So how much impact will be there? We are just estimating that it will be 15-20 percent. But how the thing moves, now the fuel prices have also, diesel prices have gone up. So it is very difficult to predict right now what will be the overall impact. We are just, we can estimate that currency is 50-20, I think, how it's a single move which is difficult to scale right now.

Okay, got it.

And broadly, in terms of EBITDA button, what we are normally looking, 1,600 to 1,800 odd rupees, that we will be able to maintain till the time the Rajasthan will come, and then still we will be able to still have a 1,300, 1,400 kind of EBITDA button.

I think in this, you know, I think for the next three years, till the time we get the Rajasthan project, I think the EBITDA is because, you know, it is only in North East Hill, the EBITDA should be between 15 to 1700, right, at least. And once we get to Rajasthan, of course, for the first one here, because we'll be absorbing fixed costs and because we'll be ramping up our sales, you know, the EBITDA per ton may fall. But I think in the long run, we should be able to maintain it at about 1,300, 1,400, plenty. That is what we do. Yeah, and of course, absolutely much more because the volume fails. The overall volume growth will be much more, Rajasthan.

Got it, got it. And sir, can you share the fuel mix for this, sir, FSA, AFR, biomass, port and other contracts?

Yeah, for FSA, this quarter it is 78.5% and biomass is 21.5%.

Okay. Okay, and the spot would be about 3%?

For this year, we have not done any spot.

Okay, okay, okay. And sir, now in terms of the green share, how we want to increase the green share, and what's the current green share, so whatever, because Q2 presentation, after that there is no presentation, so 24.3 megawatt WHRS and 51 megawatt TPP, and that's the, right now we have how we want to increase WHRS, solar, and in terms of the green share, And what's the current wind, sir?

The current green sale last quarter, it is around 33.8%, okay, because the WHR has generated more power than compared to the last quarter as well as last year. So, this quarter, it was around 33.8%.

Okay, so how we want to look at for the full-layer F.27 this going up?

Maybe if we can consider it because both kilns are running. So it may be considered 32, 33, whatever level we have seen. Okay, okay, okay.

Because actually what we have done is that we have not necessarily right now invested in any other sources of green energy like wind and solar. Though we have planned to, but we have not. Because I think the rates in IH for solar hours anyway are falling. Right? So I don't think it makes more sense to kind of invest in non-call activities at the moment. And probably we are trying to have a group captive power agreement. I think in case we do end up signing one, which should be in this quarter, then we will inform you in the next quarter.

Yeah, and AAC block and other non-cement revenue for this quarter, for full year FF26, and how we want to look at FF27, and maybe the margin also, if you can specify.

This quarter, we have been around 17 crore, 17 crore of this quarter in AAC block, and whole year is around 43 crore, and this year...

We're targeting about 150 crores. This includes AAC, RNC, and allied products. And I think the margin that we're looking at is about 7-8% to start with. And then gradually we like to expand on the margin. Right now we're trying to create a market.

Okay, got it. And the QIP for Rajasthan, that we will be, the last time the stand, once the net data will be reaching 1.5, we will go for a QIP.

Yeah, I think that decision we still have not taken at the board level. We have, of course, taken the permission for raising money in the board. I think in quarter three we did that. But we haven't planned it also because the markets were, of course, a bit weak. So I think whenever we do, we will inform in advance and then, of course, we will do it.

Okay.

Okay. Thank you.

Thank you. Protestants, please press star and 1 to ask a question. We take the next question from the line of Iqbal Singh from IFM Global. Please go ahead.

Hi, sir. Good afternoon. I just wanted to know, like, for your Rajasthan unit, which you are planning to, I think, from the conversations that I've heard, to start from 28, FY28, 29. So when are you planning to break even on that capix and the operational cost? When will you break even on those capix, sir? This is the first question. Yeah, and the second one is, like, regarding the realizations per turn, are you forcing some kind of improvement going forward with the unit that will be set up in Gujarat? Because I believe that in Gujarat and the western area, the realization might be a little higher.

So, we are not thinking of Gujarat, actually. I was saying Gujarat, not Gujarat, actually.

Gujarat is a place in a time.

Yes, yes, yes.

So, just these two questions, the break even on the CapEx and Rajasthan unit, and the realizations, scope of increase in realizations further.

I think, you see, a break-even from an operating cost perspective or from an investment perspective, that is one thing which needs to be clarified. But I think what we are planning to do is that in three and a half to four years' time, we want to run at 80-90% capacity utilization, right? And we would want to, of course, you know, price our product in a way which… The call is, you know, is at a premium, right? So what we'd want is that the highest-priced seller, we would want to peg it at 5 or 10 degrees lower than that. That's what we'd want to approve. So I think what we'll have to do in the first initial few years is invest in the brand. Right. And create a kind of pull, you know, which is a bit more natural than push. Right. And then, you know, maintain a price and take a four, four and a half, three and a half year horizon to take a capacity to 80 to 85 percent. Right. And what we will also want to do is that we will. Yeah, I think because the capacity that we initially launching is about 5 million, compared to the size of the market, this is not manageable, right? So what we'd like to do is create a dense distribution, focus on branding, and push for sale, they even automatically will happen.

Okay, and the capacity for this unit will be how much, sir, for the Jorahad unit and Rajasthan unit?

Capacity for the Jhraat unit and Rajasthan unit. So, the capacity for the clinker part will be about 3.3 million tons in Rajasthan, along with like a 2 to 2.5 million ton grinding. Another grinding which will be supported by the clinker from Rajasthan will be in Haryana, which will be another 2 to 2.5. So, that will be a 5 million ton setup in Nalt. And Rajasthan and Jorhat, you know, will be coming around the same time as Mdanshu, and that will be basically about, you know, 2 million tons.

Who will you turn off? Klinker, Klinker in it.

Rad has no limetone. It will be only kind of... Umarangshu has like Klinker. Umarangshu has limetone, so you can produce Klinker and Umarangshu. Okay, of course. Thank you. Thank you.

Thank you.

Participants, please press star and one to ask a question. We take the next question from the line of Harsh Mittal from MK Global Financial Services. Please go ahead.

Yeah, thank you for the follow-up. Am I audible?

Yeah.

Yes, yes. Sir, I wanted to understand the CC ratio for FY26.

That's about 66.6. I don't have the data for full year, but I have it for quarter three as well. It was 67.5. I'm assuming that the linker factor would be between 66.6 to 67.5. I think for the full year, but I will, you know, I think you can get in touch with that and I'll give you the full year data as well.

Sure. So the second question is, Once we commission the Bihar grinding unit at Begu Sarai, we'll be, as you alluded to, the fact that you'll be shipping the clinker from the Nekalia plant to Bihar. So, what would be the incremental freight cost that would be bearing on that? And correspondingly, the incentives what we wanted to accrue from the Bihar Grandi Village, will it kind of offset that incremental cost is what I wanted to understand?

Yeah, right now, Malab, you know, we are still catering Jihar market. We catering the east side of it, right? And what we do is that we reserve it from Theribodi. So, I think, like, the freight, you know, you cannot only look at the linker freight and how much incremental linker freight that you'll be paying. So, it also has to be looked at from the cement freight, right, and how much of the cement freight we'll be able to save and the freight that we pay on flyash, right. So, I think it's a bit more complex than just incremental freight that we'll be paying and if it gets offset by the incremental subsidy, right. So I think So, but yes, we have applied for our subsidies in Bihar. We should be getting the FGSE benefit, you know, and we have applied for it under the policy. And I think the benefit is up to about 150 to 200% of the investment that one makes. I think once we do get the confirmation of the benefits from the Bihar government, we will be sharing it with you in the next call. And I think with the subsidies and with optimized linker transportation and flyers closing, I think it can be a model, which of course will not give you EBITDA of 1300-1400. So it will help you utilize your capacity while also leading to... Leading to entering new markets and creating your geographical footprint.

Sure, sir. Sure, sir. Thank you. So, these are my questions. Thank you.

Thank you. Participants, this is a final reminder, and no further reminders will be announced. To ask a question, press star and 1. As there are no further questions from the participants, I now hand the conference over to Mr. Vaibhavagarwal from Philip Capital India Private Limited for closing comments.

Thank you. I believe there are no further questions of participants. Tushar, I had a few questions. Firstly, on the war impact, the West Asia war crisis. So, most of the companies that have been in India, what they have been talking about is about kind of a 400 rupees overall impact in terms of operating cost by end of H1 FI 27. But as far as investment is concerned, I believe the impact will be limited to packing. The diesel cost and maybe the fuel cost may not be equally impacted because of our less dependence on imported fuel. And also, we are safe regarded from the rupee depreciation. So, from that perspective, what is your estimate of the broader cost impact which could be there in H1 for Salzman per se?

I think there could be, you know, about 150 to 300 rupees impact, I think mainly because of the packing bags and the fuel cost, because for us, of course, We do not depend on imported fuel, coal, or petco, but we do depend on our SSAs being supplied on time, and right now, because of the rate shortages, you know, the SSAs are not available, and that is creating a crisis in terms of fuel sourcing. So I think because of that, we have to go for higher rates of... And I think that is what is leading to a cost impact. I think it should be a 250 to 300 rupees impact. So I think there have been a few, you know, I think about 7 rupees increase in North Peace, about 10 rupees increase in North Bengal, basically to kind of partially, not fully, but partially nullify the impact which is coming in terms of the cost.

So, is it fair to say that we are kind of 100 rupees better off versus the mainland peers in terms of cost escalation? Maybe 50 to 100 rupees better off because of less depending on the import?

Yes, I think it really depends because I don't know if other people have forecasted a further increase in the diesel prices or not, you know. So it really depends on those assumptions and how the diesel prices behave because I think North East is also quite heavily dependent on the fuel price and the PTPK in North East is a bit higher because of the hilly terrain. Right? Because the fuel cost equally impacts us as well. So I think it really depends on how much the diesel prices go up further. And of course, if there's a significant increase in the diesel prices, then that will have to be absorbed, you know, from the market as well.

Okay. And Tushal, you just mentioned that we have partially passed on the cost impact. So, is it fair to say that Q1, we are kind of a bit dilutive because of the cost inflation? It's not neutralized yet.

Yeah, I think the Q1, there will be definitely a pressure of the EBITDA, right, on the EBITDA because of the cost. I think by, as we're going, I think April was quite heavy on the cost. I think May is turning out to be a bit better. So I think by June, I think it should normalize. But there will be a decent impact of whatever is going on, on the EBITDA per ton as well and overall EBITDA as well.

But you stick on to the guidance of 1500 plus for North East operations per se, which will be a 1B call, right?

Yeah, I think that was more from a year-long perspective.

Yeah, that's what I'm saying.

Yeah, I think year-long we should be able to average that in quarter of one, we'll have to see.

Okay. And Tushar, my second question was that basically this is from a more of a kind of a long-term perspective. So recently, maybe a couple of more clear. So in total, J.K. Lakshmi Cement, Shree Cement, and Ambuja Cement from mainland have now announced their entry to Northeast. So, when we interact with our investors, etc., so we get a feedback that they have a notion that Northeast EBITDA per ton versus profitability per ton will dilute substantially once they enter into the market. I know that may not be the case because of the very high CAPEX and Northeast is a very difficult geography to operate. That is what I have kind of figured out. So, what is your say in terms of once they, maybe three years down the line, it's So, more of a long-term kind of a question, but maybe three years or four years, once they come in, do you see EBITDA per ton or maybe profitability of Nortis getting impacted heavily, given first, keeping in convention the high capex which they are spending in terms of their overall plans. So, people have announced kind of upwards of $160, $170 capex per ton in Nortis. So, how do you read the situation once they come into the Nortis markets from a long-term perspective?

See, in the long run, like, you know, once they do come in, I think there will be a significant pressure in the market, right? Because everyone will be, you know, running and running for the same capacity. Sorry, for the same market, and the market is relatively small, right? So, even a 3 million 10 plant in a big market makes a big impact. I think people who then are coming in, they also need to then think, right? Because unlike North and unlike South, where they put up capacities without caring about their impact on the market, right? Everyone who comes into Northeast will have to think about their impact on the market and their own profitability. And why are they entering in the first place, right? Because it has a charm of a higher margin, right? So what would be the point of entering and putting in all that effort? Right, if you cannot enjoy that higher margin, because volume, they can get from outside.

No, but the question was that now they have already announced, so Shree Siman has announced, J.K. Lakshmi has announced, Ambush has announced, obviously. Yeah, no, completely.

So, I mean, I think Manfey will enter also, because the impact of their sales will not only impact one of their price decisions, will not only impact, you know.

But my question was, do you see that they will take such a price decision where it can impact you because the kind of capex which they are spending, like 170, 180 dollars, kind of a capex, initial capex? Yeah, like, I don't know.

I honestly don't know. I think it depends player to player because I think some players have a strategy to kind of... You know, just cut and aggressively tell and not care about their price positioning compared to ours. And then there are other players which are much more sensitive to it. Right? I do not see that they'll be significant because I think there has to be rationality which everyone follows.

That's what I was trying to figure out.

So I think, I don't think it should be that. Of course, there'll be pressure. You know, there's more competition. There'll be some pressure on the price, I think. I think it's something that probably may happen for a year or two, but then I think it should normalize because everyone's there to earn, I guess, right?

And in terms of loss, in terms of the trade penetration, we'll start to win the highest in terms of all the Nordic shares in terms of the trade market penetration.

Yeah, I think we sell like a majority of our sales is in trade only, and out of all the players, we have the highest penetration in trade by far, I mean by a big margin, and I think that is something that we want to maintain, right, because I think that's...

And that will also help you safeguard the profitability, right?

Yeah, I think to an extent, because I think the trade market doesn't go by just fretting the market side. I think it's much more nuanced than that.

And last question to Manoj, sir. Manoj, sir, do you have any kind of one-offs in the quarter in terms of donations, et cetera, if you can just...

One-off is there, because last quarter is 5 CR was there, this quarter is 10 CR. So 5 CR is the one-off, you can say.

And 10 CR is a donation or what is it? It's a donation. It's a donation. It's a donation. Okay. So, now this one-off will stop, right, from one onwards. There will not be any one-off.

Yeah, one-off.

Because you can't foresee what will come.

Okay.

No, no. In terms of donations, I'm asking. In terms of donations, I'm asking.

Yeah, I think in quarter one, there may be a few. But I think in quarter two, you should not be expecting any significant ones. Okay.

Okay. Thanks a lot, Tushar, and thanks a lot, Manoj. There are no further questions from participants. On behalf of Philip Capital India Private Limited, I'd like to thank the Manager of Star Summit for the call, and also many thanks to the participants for joining the call. Thank you very much, sir, and I will now conclude the call. Thank you. Thank you.

Thank you. On behalf of Philip Capital India Private Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your line.