Star Cement Limited (STARCEMENT) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Star Cement Ltd. Q1F527 Earnings Conference Call hosted by ICICI Securities Ltd. As a reminder, all participant lines will be in the listen-only mood 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 touchtone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Naveen Sahadev. Thank you, and over to you, sir.

Thank you, Anushka. Good evening, everyone. On behalf of ICICI Securities, I welcome you all to the Q1 FY27 earnings call of Star Cement Limited. From the management, we have with us MD and CEO, Mr. Tushar Bhajanka, and the company CFO, Mr. Manoj Akarwal. So without any further ado, I hand over the floor to the management for their opening comments. Over to you, sir.

Hi, good afternoon, everyone. My name is Tusha Bhajanka, and I'm the MD of StarCement. I welcome you all to the conference call of FY27, quarter one. I would like our CFO, Mr. Manoj Agarwal, to give his remarks regarding the numbers, and then we can start with the Q&A. Thank you.

Yeah. Thank you, Susadi. Hi, Frank. Very good afternoon. I, on behalf of the Star Cement, welcome you all to our phone call for discussing our number of Q1 FY27. I would like to clarify that we are discussing on the historical numbers and there is no invitation to invest. Having said that now, I will just take you through the Q1 number. Starting from clinker production, during the quarter ended June 26, we have produced 9.10 lakh ton of clinker as against 8.90 lakh ton same quarter last year. So far as cement production is concerned, we have produced 13.08 lakh this quarter as against 12.31 lakh ton same quarter last year. Now, I will take you through the sales volume. During the quarter, we have sold 13.02 lakh ton of cement and 0.52 lakh ton of clinker as against 12.22 lakh ton of cement and 0.74 lakh ton of clinker, same quarter last year. This is as far as cement and clinker sales is concerned. As far as geographical distribution of cement is concerned, in Northeast, we have sold around 8.71 lakh ton as against 8.67 lakh ton during same quarter last year. And as far as outside Northeast is concerned, we have sold 4.31 lakh ton of cement this quarter as against 3.55 lakh ton same quarter last year. In terms of blend mix, it is almost 15% of OPC, and the rest is PPC. These are the quantitative number of this quarter. Now I will take you through the financial. The total revenue figure this quarter is around 902 crore as against 847 crore same period last year. As far as EBITDA figure is concerned, this quarter we have done an EBITDA of around 203 crore as against 230 crore last year. This is only on account of reduced subsidy, increase in packing material cost, and also shut down expenses which we have taken in one of our films. Profit after tax is 74 crore in this quarter, as against 98 crore last year. On part-time EBITDA fund, it is 14.97 during this quarter, as against 17.74 per term same quarter last year. This is what our quarterly numbers are. Now I request all of you, if you have any query, you can ask the same, and I will request Navinji to moderate the query wherever it requires. Thank you.

Thank you very much. We will now begin 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 requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question 2 assembles. We take the first question from the line of Shravan Shah from Dalit Capital. Please proceed.

Thank you, sir. Just a couple of data points before question. Trade share, premium share, CC ratio, lead distance and take care for this quarter.

So, I think the premium sales is about 15.9% of the overall sales. The lead distance was about 210. The clinker factor was about 66.5%. And what were the fourth parameters that you'd asked?

Trade, sir.

Trade share was about 80%.

Okay. And Kql for this quarter?

It was about 1.55.

1.55. Oh, so keep it from jumping back. So now two things. First on the volume, so this quarter slightly on the lower side, so we were looking at 10-12% cement volume growth and similar number of the clean curve for entire full-year versus 26. So, any change in there? So, can we now see that from Q2 onwards or that the volume growth would be slightly better?

So, in Q2, you know, as we all know, the SAM is completely flooded At the moment. So I don't see much of a stride in terms of volume in Q2, but I think from Q3, Q4 onwards, I think we can see hopefully a double-digit growth. And on the overall year, I think we expect to probably revise the numbers a bit from 11 to 12 percent to about 8 to 9 percent.

And but the thinker still for the full year could be the similar of what we have done in the 526.

I think the thinker sale in FY27 would probably be stagnant or may de-grow by about 5% to 10% compared to FY26 because I think the thinker is also coming from outside now in Northeast, so it may be a case that, you know, there may be a de-growth in the field of thinker.

So now on the cost in front, so given the fuel cost has sharply jumped up to 1.55 from 1.24 in Q4. So overall this and even the we heard that the some packing back cost has also recently has gone up. So overall and how do we see the cost moving up in Q2? And then at the same time, the prices are still the prices holding on versus the June average?

So, in the fuel cost, you know, in FI 26, quarter 4 was about 1.33, which has gone up to 1.55. We expect in Q2 onwards, the cost should come down to about 1.45. And hopefully in Q3 and Q4, we can hopefully reduce the cost further on fuel. The PP back prices are completely related to the international turmoil and war situation which is going on and the raffia prices are up. So that I think really is hard to predict of how will it play out. And on the prices, the prices... The prices, I think if I compare, I think the prices are broadly stable in North East, as well as in outside North East markets of Bihar and West Bengal, even in the quarter two.

Okay, so broadly, kind of a 1500 plus kind of a beta pattern that we were previously looking at for at least two, three years once our Rajasthan plant comes in. So that we are still seeing that that is kind of a still manageable given whatever the new capacity will come up in the Northeast. So, still, it will have a time. So, we should be having the similar kind of 1,500 rupees kind of EBITDA part-time can be doable.

Yeah, I mean, over the entire year, yes, it can be doable. I think 1,500, 1,600 is still a good estimate. Only for quarter two, because the shutdown cost also gets added in the cost in quarter two. And also because in Northeast, it rains more, so for the fixed costs are getting absorbed by a lower volume. So it may be about $1,400 for quarter two, but I think we'll catch up in quarter three and four. Okay.

Okay. Thank you, sir. All the best. Thank you.

Thank you. We take the next question from the line of Jyoti Gupta from Ashika Institutional Equities. Please proceed.

Thank you so much for taking my question. Good set of numbers. I just wondered, how does the pricing and demand scenario look like in the second quarter, and what should we expect, given the kind of situation on the EPC, and especially roads and highways, do we see demand slowing down in the third or fourth quarter, or is it likely to remain stable in the second half as well?

So I think that because of the lack of demand in the first two quarters, like quarter one, quarter two, and because of the floods which have completely on the northeast at the moment, I think that when the floods subside, which is basically quarter three and four, I think there should be some pent-up demand which gets released in those two quarters in the second half of the year. So, I would expect a bit higher than usual growth in those two quarters, and of course, you know, the demand in the first two quarters have been quite mute.

Yes, sir. Sorry, I missed you. Hello.

Yeah, I was just saying that in quarter, second half of the quarter, sorry, of the year, we would probably see a pickup because of the pent-up demand. Right now, there's, you know, heavy rain and flooding going on in the entire northeast. So, of course, the demand for cement is quite mute. But as soon as the situation gets better, I'm sure there will be a pickup in the demand as well.

When should be expected to come on stream and by when do you think it will be, I mean, step-up phases, maybe start with 30% utilization level? Would you expect an effort to retain?

So, basically, we have now gotten the plan for the flinker and the integrated grinding unit plant. So, we have applied for the, you know, public hearing and for the EC. By, I think, about September end or October, we should be getting our EC for the plant. And between mid-October to November is when we plan to start our work on the Rajasthan project.

So, effectively, 26 months for the plan to come up or 22?

So, it would be about 18 to 20 months from, like, November onwards, I guess. So, it means about quarter 1 of S by 29 or quarter 4 of S by 28.

Okay. Great. Thank you so much. Thank you.

We take the next question from the line of Rajesh Raviv from HDFC Securities. Please proceed.

Hi, good evening. Can you hear my audio? Yes. My first question pertains to demand in the North-East even if I understand we have seen a decline in the North-East scale. So what do we attribute that to? It's all because of elections which impacted the internet. On the month of April, or also because of the rising competition from Dalmia's capacity ramp-up in the green market.

No, I think it's not because of the competition. I think because, I mean, in Q1, the best month is of course April, because from May and June in Northeast, the monsoon starts, you know, playing a role. And in April, we had the election in the Nassam, which is like almost 60-70% of the Northeast market. So I think that is why I think there is a bit of a dip. I don't think it's because of the competition, and I don't think we've lost any market share. In Northeast, you know, compared to the last quarter or the same quarter last year.

So on a full year basis, what is your estimation in terms of growth in the Northeast state on a year-on-year basis?

The growth state in Northeast on year-on-year basis. Thank you.

You are talking about the market growth or start

growth and both for industry as well as for market, FY27.

Industry is 2%, whereas our growth is more or less flat or maybe minor growth.

So for FY27, you are saying that our industry will grow at 2%?

Well, for us, I think the growth was about 0.4% in Northeast, and I think the industry may have grown by about 1% or 1.5%. It was plattish.

Now, for full year, what are the expectations we're looking at?

I think we still are hopeful that, you know, we can catch up in the quarter four and quarter three and quarter four. So I think for the industry, I would say that the growth rate should be about 7%. For us, I hope that we can do about 8 to 9% in Northeast.

Okay. And fuel cost, you mentioned 1.55 was for Q1 or in Q2?

So, 1.55 is the estimate for Q1. I think in Q2, we should bring it down to probably about 1.45. Yeah.

Understood. Understood. Okay, sir, I'll come back. Lastly, on this NOV project, are the treatment ordering is already in place? Or after the issue is in the queue?

So, we are, you know, we have just completed the purchase of our plant land. Our public hearing is end of the month in August, if we should come in first week of October, we have already started calling vendors for quotations, and I think we should be able to log those by, I think, end of August or start of September. So, and then we'll start with the engineering work.

Understood. That's all from my end. Thank you.

Thank you. A reminder to the participants, in order to ask a question, you may press star and one on your touchtone telephone. We take the next question from the line of Naveen Sahadew from ICICI Securities Limited. Please proceed.

Yeah, good evening, sir, and thank you for the opportunity. My first question was, Assam comprises what percentage of our sales volume? And also, if you could throw some color on volumes, if at all, we would have done in Q2 or at least in the month of July. I mean, to just ask, is there a risk of a negative YOY growth because of the flood situation?

So, in quarter two in July, of course, the volume degrowth was about 12%. The reason was because July was completely flooded in Assam and Assam was completely shut down in many areas. I think we are seeing a marginal growth in August. Last year in September, there was GST revision from 28% to 18%. So last year, September numbers for us were very bad. This year, September, we expect to be without much of floods and without any regulatory changes. So I think whatever volume degrowth we have done in July, we hope to catch up in September month. Understood, sir.

My second question then was about grinding units. So, is there a plan that we see some grinding units proposed or planned in West Bengal with a change in government or some industrial policy around it?

So, we are actually waiting, I think about 15th of August is when the West Wing Wall is supposed to come up with their industrial policy. So, looking at the industrial policy and looking at the potential benefits that one can approve, I think we will take a call. Of course, you know, the CAPEX, in case the benefits are favorable, I think the CAPEX and West Wing Wall, especially in the Siligodi plant, may make sense. Because, I mean, it will be a brownfield expansion and will cost much less than from the CAPEX and will also give us benefit of LKST in our existing field.

So, is there a possibility, sir, that... We would contemplate or compare it between Bihar Vending Unit and West Bengal for us to take a call if the industrial policy is out or as in when, whenever we get clarity, we will be able to decide based on that.

Yeah, I think what we are in the short run at least comparing is West Bengal and Bihar, you know, as alternatives that we can probably invest in. So if there is a favorable policy in West Bengal, then, you know, then we may have to reconsider our GAPEX in Bihar and probably may redirect it to West Bengal. But that I think we can probably have a longer discussion after the policy is out in the next investor call. I think we'll have more clarity.

That's true, sir.

And regarding the north region, I wanted to understand if there is clarity on the incentives that we will likely or potentially get, or what is the status on that, friend, sir?

So, yes, I think we have already gotten the standard approved package in Rajasthan, you know, for the Nembol clinker plant that we plan to set up. I think I will share a slide of those benefits in the next presentation. It involves a degree of capital subsidy along with SGST benefits. The exact quantum is not in front of me at the moment, but I will just add it to the slide so that everyone can see.

Sure, sir. Thank you. Thank you so much. Thank you.

Thank you. We take the next question from the line of Shravan Shah from Dalit Capital. Please proceed.

Sir, just to continue that, so if the West Bengal policy page is favorable and if we find page, so we will then entirely 2 million ton grinding that we were looking at Vagusharai BR, this entire 2 million ton we will be shifting to West Bengal or it could be a 1 million ton in West Bengal and 1 million ton in BR?

I mean, you know, we will get back to the details. I do not know if, you know, what the policy will be. I hope it is favourable. And I think it will... You know, it may make sense for us to, you know, put a plant in West Bengal. I don't think it makes sense to put 1 million in West Bengal and 1 million in Bihar, because the overall capex of a grinding unit along with the railway siding in a greenfield project sometimes may need economies, which may not come with a 1 million done grinding unit. So that, I think, will have to redo the working, depending on the demand scenario. Right now, the demand in... In West Bengal has been quite good. So I think if demand continues like that, then we'll have to, you know, in the next two, three years plan. To commission, you know, either one of them, for which we will get back to you in the next call, after we have analyzed the industrial policy of West Bengal as well. In the existing grinding unit in Silivri, we already have a plant land enough for another grinding unit. We also have... We also have railway siding in Siddiquiri, and we are planning to put a wagon tipler for the movement of linkers as well as for the movement of fly ash. So I think the economics of Siddiquiri landing unit will be changing, and the CAPEX decision we will let you know in the next call.

Oh, okay. Got it. Understood. And in terms of now, I understand this is offending, but broadly in Q1, how much capex we have done and for full year for 27, 28, how much capex are we looking at and out of that, particularly the nimble, how much we want to spend this year and next year?

Now, this quarter we have spent around 93 crore, 8 crore. And our planning, what we have given 500 crore for this quarter, this year, that will continue, that will be still holding on the same. Okay, and next year, FI28? That we have already that same thing.

There is no change as such right now. So, 1,500 odd crore kind of a number we should be looking at in FI28. Yeah. Okay, and then this will be largely for the, for the, so there, overall capex, what we previously talked about, 2400, around 2500, so that remains the same.

Yeah, so I think in that, the capex that we, I have planned for Rajasthan is about 3 million tons of grinding and 3.3 million tons of clinker above, but that we are still finalizing the exact specs of the machine and 2 million tons in jajar. So overall capex of this thing is about 2,600 to 2,700 crores. Is that what we are expecting? And I think we are focusing in the next two years to primarily get this capex going in North. So that will be the primary focus of the CAPEX, all the CAPEX that we do.

Yeah, because the last, latest presentation, what we have there, we were saying that 2,250 crore for integrated limbo and 650-odd crore for Haryana. So, that is close to 2,900-odd crore that we were looking at.

So that is – so I'm also talking about the combined amount. I think it may be about 2,700. We are still doing the math. It may be 100, 200 crores up or down. That I think we will – once we start finalizing the machinery, we will be able to give clarity in our presentation as well, and I think we will be able to take a definite budget for the expansion. I think it will be about 2,700-odd, but with the GST, it may be about 2,900. So I think the difference in numbers because of the GST, which I may not be including in my number, but the presentation includes.

Okay, okay, got it. So, for the QIP, previously, we were looking at 1,500 odd crore. So, there anything that we are now looking at? So, once we have 1.5 times net data, then we will go for it or how anything change in there?

So, I mean, right now, because, you know, we have, we're only focusing on Rajasthan for the next Rajasthan and North for the next Capex for the next two years. And I think if our tools are healthy, then we should be able to manage it with about 1.5, 1.6 times EBITDA. So, we are not at the moment actively thinking of UIP. We will do it at the opportune time, in case there are opportunities available for which we need to further raise money that may be organic or inorganic.

Okay, okay, got it. And this year for full year in terms of incentive would be 130, 140 odd crore?

So, I think it should have been, but there is a friction that the Assam government has. Come up, where they are, you know, dividing the overall subsidy benefits by, you know, across the number of years that the subsidy is valid for. So what I expect for this year is not about 145, but about 115 pros.

Okay, okay. Okay, got it. And in this quarter, what was the green share, and why this year, and where we can be reaching?

Green shares for this quarter, there was about 3%. This of course includes the WHRS as well. Yeah, yeah. And, and this, we are planning to, you know, we are planning to introduce solar, you know, some group captive opportunities that we're evaluating. I think in a quarter three or quarter four, we will also share the details of those contracts.

Okay, and lastly, the fuel mix for Q1 would be in terms of the FSA, AFR, and Biomass would be how much?

So, fuel mix for FSA would be about 42, would be about 45%. And from FSA, and the other source was spot contract. What has happened in quarter one is that all the coal has been directed to the power plant by, you know, because I think there was a surge of power requirement. So all the Coal India coal was diverted. So, what we... We did not have that many rakes come in of FSA, and we had to focus on buying spot contracts of coal, which are, of course, at a higher price, and that is why the fuel cost has gone up. But now I think that we will be able to get fuel rakes from FSA more frequently, and that is why we expect the fuel cost to go down to 1.45.

Okay, I got it, but still, you said the FSA was 45% in terms of the fuel mix in Q1. What was the balance?

The balance, about 30% was spot contract of coal, which is basically we buying off the market, right? Right? And then there was a component of biomass and some from... Yeah, and then there is a component of biomass. So, I think this was the broad fuel mix.

Okay, okay. What if sir? Thank you.

Thank you.

Thank you. We'll take the next question from the line of Pratik Kumar from Jefferies. Please proceed.

Yeah, good evening, sir. I have more like an industry question. Can you discuss the cement demand for FI26 or like maybe estimated FI27 clinker capacity and grinding capacity for FI27, and how do you look at it somewhere like in three years?

So, in F527, I do not see any clinker capacity come in. The demand seems to be muted in the first two quarters, primarily because there was election, now there is a tremendous amount of flood. So, but in the last two quarters, we looked at the, the, the, the, the, the, the, Later quarters, I expect the demand to improve. In terms of capacity additions, I think in the next three years, I would expect a capacity addition of about 1 million each of two players. And besides that, I am not aware on ground of any other capacity additions happening.

Okay, these are like clinker capacities you're mentioning, 1 million each of clinker and a similar grinding, right?

Yeah, like proportionately, I think.

Okay, and what will be the, like maybe FI26 ending clinker and grinding capacity of the region?

That number I'll have to get back to you on. I don't have it off hand like that, but I think it should be about... The 15.5 to 15 million, that should be my estimate of the clinical capacity in Northeast, currently.

Do you have an estimate for some grinding capacity as well?

Grinding capacity would be about 23 million. 23 to 24 million.

And besides yourself and Dalmia Bharat, like other smaller players, have they been able to expand or like most of expansion is from the top two players in the region in the past three years?

So, I mean, besides us and Dalmia, we are the two people who are majorly expanded. I think other companies are doing brownfield expansion and they're trying to de-bottle next. We have about 0.5, 0.6 million, but I don't think there's anything significantly that they're expanding at the moment.

Sure, sir. This is my question. Thank you.

Thank you. We take the next question from the line of Harish Mittal from MK Global Financial Services. Please proceed.

Thank you for the question. Good evening. Good evening, team. I have only one question. How have been the prices behaved in the past one and a half months, basically, the post-1Q exit given the flood situation in Assam? Okay, if you can give color on this.

Yeah, I think the prices have broadly been flat, you know, so from Q1 to now, I think there's almost like a 2-3 rupees increase in the price, but it has broadly been flat, you know, because, I mean, yeah, so I think because the demand has gone, I don't think there's any reduction in the price, but there's a cost pressure, so we had to maintain the price, and that's why the prices. A bit of flat, you know, but I think ideally, because of the demand, because of the cost pressures, I think once the demand opens up, I think there will be a requirement to increase the prices a bit to absorb the cost.

And this flat prices is safe in both of your markets, this northeat as well as an outside northeat. Is this assumption correct?

Yeah, I think in Bihar, the prices are a bit higher. Up by about 10 rupees. But in West Bengal and Northeast, the prices are up by about only 3 rupees.

And sir, any number if you can give about what would be the cost per ton reduction in quarter two, or you are saying it may be flat, if any indication you can give on the operation cost per ton?

So, operational cost, you know, besides the fuel cost, it may go down to about 1.45. I don't see a lot of cost going down, because, you know, the bag prices are also high at the moment. So, I don't see that. You know, also going down, I mean, depends on the war and the crude oil prices and dark oil prices, and so that is beyond our control. I think we are introducing, I mean, from a longer horizon, we are introducing a few things which should help us in reducing our cost. I think, you know, we are, by October, November, we will get a real exciting in Silcher. You know, and we start operationalizing our filter capacities fully. I think there will be a lot of operational logistics savings that we may be able to prove because of that, you know, because that will help us in serving the cheap, you know, in serving the South Assam market more effectively along with other states in Northeast. We are also planning in the next five, six months, you know, also planning to introduce EVs in some typical routes. I think that would also lead to significant savings. We are planning to introduce wagon tiplers in Sediguri, which will reduce its clinker transportation costs and fly ash costs to Sediguri significantly. We expect about 150 rupees savings from the sales that we make on Sediguri after we do, you know, introduce EVs. So, I think there are just a few cost initiatives that we are taking, which will materialize in the next three to six months, basically.

And in addition to that, because there are some one-off in retirement or donation and some incentive, that will also reduce in the next quarter. So, that only 60 to 70 rupees saving will be there as compared to this quarter.

Got it. Last question from my side. Are we seeing our guidance of 150 crores of non-cement revenues this year, or there is some downside risk on that? My question is, in the last call, we gave a guidance of 150 crores revenue guidance for the non-cement part business. So, are we staying intact? Is this guidance intact, or is there some downside risk to this number?

No, so that 150 was not, yes. And that 150 was not actually the EBITDA increase, that was a revenue increase that we had suggested, that we will do about 150 years. By our building solutions division, right, by AAC and RMC, and that is actually a revenue estimate. That's not an EBITDA estimate.

I said revenue estimate only. I said about revenue.

So, is that revenue estimate? I think, again, because the demands have been a bit sluggish, so we are not right now at the ARR where we touched 150, but we are increasing our RMC plans. We are focusing on AAC, and I think we should be able to reach that ballpark figure. At least on an ARR basis, we should be able to reach that 150 number by the quarter four. You got it.

Thank you. These were my questions. Thank you.

We will take the next question from the line of service to Tahadiyo, from ITNATIA, New York City, England.

Yeah. Hello. Hello. Am I audible?

Hi. Yes.

Right. Sir, a couple of questions. My first question was that if NORTH as a project is certain, Is there a, from a strategy point of view, are we contemplating entering the region with some RMC units? Because you already have some experience for RMC in your home turf, and given the way North is typically an OPC market, And incrementally, I think other companies are also talking about RMC increase. So as a strategy, would you be contemplating putting more RMC units in the region to begin with so as to make like, you know, brand visible or create or indirectly seed the market? And then probably once your product is launched or once your factory is launched, that could help us gain a better traction. Is that something on the card?

So, I personally, you know, that's a good suggestion. We had not, you know, got down to thinking about that yet. But I think it's a good suggestion. I think, you know, I would, you know, ask my team to kind of evaluate it. And then probably we can have a discussion about it in the next earnings call. Right now, I think we will just, you know, we've read the market. I agree with you that a lot of cities have, you know, the RNC culture and things. We'll have to eventually get to it. But we haven't really modeled it out and we haven't really explored it in detail. So we'll do that and we'll get that.

So, we'll look forward. My second question then was about the incentives. So, you mentioned Assam government did some things wherein from the earlier payout, they would now do a much more equated kind of a payout. So, two things here I wanted to understand. What is the amount outstanding? And are there any receivables there from the Assam government which will take longer than expected?

So, Manojit, you have the number?

Karanji, we are around because... We have received this quarter also, we have received 50-odd crore, 140 crore we have received. Till June, we have an actual of 165 crore. And we have received 140 out of each and 25 we have received. So June, up to June 25, everything will be cleared. Then after that, just let me give the number 5. Then 85 is the accrual till March 26. That is, suppose it will be 85 plus 25. This is 110 crore is outstanding till March 26. And further this quarter we have accrued around 40, 70, 60 crore. That is outstanding. 130 crore is outstanding from Assam. 130 is outstanding.

And, I'm sorry, how many years now, what is the total book size or incentive amount that we can get irrespective of the period? I believe they have changed the period now. So, what is the total duration in terms of years and maybe the annual amount?

Total was 794 total.

Okay, that has to be, we will get. Okay.

Yeah, so I think the 794 crore that you were supposed to get, you know, earlier there was no restriction of how fast you can get, it depended on, you know, the amount of SDSP that you gave to the government. Correct. Right, and I think that used to get deducted, the net SDSP used to get deducted from that amount of the overall subsidy, right, but now what they've done is that they've divided the number of, the amount of subsidy by 12 years. Right, so out of that, two, three years have already gone to whatever remaining subsidy was there, they divided it by the remaining number of years, right, as per the new circular. So the impact of that is about, you know, 20, 30 crores, which is why I said that the estimate of overall subsidy will reduce from 145 to 115.

Understood, sir. And for my last question, because there was a change in the government in West Bengal, and whatever local articles that we were reading through some friends maybe, I could just understand that there was a big crackdown on the illegal sand mining in the West Bengal, so to say. So, do you have any idea if the upcoming industrial policy will have any, or any, like, you know, is there a proposal by the state to formalize this tan mining, which will also then, in a way, lay ground for having more organized RNC business in the West Bengal as a state?

I, you know, so I think you're right. I mean, in Westingville, we did, I mean, there was problems because of the illegal sand mining and the crackdown on it. So that is also the reason why the demand for cement has also been a bit mute, I think, in that area. I do not know if the government is trying to formalize this. And what steps they're taking to, you know, counter this. But I think that once the rainy season gets over, I think they will, in some form or the other, open the sand mining, because I think it will be critical for them to do that. I mean, and right now they can't do it, but anyway, it's raining. So it won't be possible for them to do it right now.

Understood. Thank you so much. Thank you so much. And let me again congratulate you for still being the highest, one of the highest EBITDA first-term companies, even excluding incentives. We look forward to similar such leadership or like, you know, that margin gain going ahead as well. Thank you.

Thank you. Thank you so much. Thank you.

Thank you. As there are no further questions from the participants, I would now like to have a question about the participants from the call.

I'd like to just say that, of course, quarter one was not as per any of our expectations, I think, because of unforeseen events globally as well as in the States. I think quarter two seems to have a similar trajectory. You know, this is also because the GST has been significantly revised. I think first hit on the subsidy side was because GST had reduced from 28% to 18%. So I think in quarter one alone, 40 crores was a hit because of that. If we actually exclude that hit of 40 crores, then I think we were positive in terms of percentage in absolute terms. Which shows that there was resilience. I think from September onward, anyway, the subsidy impact last year had also already hit us. So I think from quarter three onward, we will see that there's not much of a loss that we're making because of the reduction in the subsidy. And that part in the books would seem to be taken care of. And then I think the profitability also in terms of the percentage growth in EBITDA, we'll start reflecting in the books. So, the first quarter, two quarters, because last year, till September 20, The GST rate was 28% and now it's 15%. So, right now we are absorbing the hit of the subsidy but I think from September onwards, last year also it came down to 18%. So, I think the hit that the books are facing because of the subsidy will stop being felt after September onwards and we'll start seeing a growth thereafter.

On behalf of ICICI, that comes to the conference. Thank you for joining us in the evening.

Okay, thank you.