SHREE CEMENT LIMITED (SHREECEM) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Sri Semen Ltd. Q1 FY27 Earnings Conference Call hosted by ICICI Securities Ltd. As a reminder, all participant lines will be the listen-only board and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star 10-0 on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Naveen Sahidio from ICSA Securities Limited. Thank you and over to you, sir.

Thank you, Palak. Good evening, everyone. On behalf of ICICI Securities, I welcome you all to the Q1 FY27 earnings call of Shri Sement. From the management, we have with us Mr. Ashok Bhandari, Mr. Subhash Jaju, Mr. S.H. Khandelwal, and Mr. K.K. Jain. So without any further ado, I hand over the floor to Mr. Ashok Bhandari for his opening comments. Over to you, sir.

Thank you, Raveen. Good evening, everybody. Before we start the actual Q&A, I just want to make two specific points. Point number one is that I've been pointing out to you guys that we should, this time has probably come when we should look at consolidated numbers instead of standalone. This quarter, almost 10% of the turnover... It has been contributed by my overseas subsidiaries and a 100% subsidiary in India, and the standalone number is about 88-89% only. All these are cement businesses, so we would like to request everybody to start looking at the consolidated reserves and not standalone reserves. Going forward, I sincerely believe that due to doubling of capacity at Ras al-Khaima in UAE, which should be upstream by third quarter, 26-27, and increasing penetration into eastern market, the seismic east performance should also improve. And going forward, in not too distant future, probably the standard on free cement should constitute about 75-80% of total revenue, and the other constituents will have 20-25% of revenue. So to have a more transparent and clearer picture on how we are fearing in our free cement business, it is better to look at consolidated numbers. This is point number one. The second point is that you have to appreciate what kind of hardships we had to face because of the Middle East war. Three things happened. Number one, the pet coke which were contracted for could not reach us, which had to make us shift the fuel from pet coke to coal. Thank you. Petco reduced from 54 to 9, whereas coal increased to 74 from 26. Now, the other point is that the contracted Jitsal quantity out of Oman could not reach us. Now, both had a similar effect. They both adversely affected the cost of production of the company. If Omani's gypsum was not available, we had to procurate more expensive gypsum of lower quantity domestically. If Pitcoop was not available, then we had to go for lower quality coal, which was available at a more expensive cost. Because of these two factors, two things happened. The raw material, per se, went up because the gypsum prices went up. Number two, because of lower quality of coal, our conversion factor, means clinker to cement ratio changed, which increased the component of clinker in my cement, and this is because high ash content coal, when physically and chemically reacts with the liquefied calcium oxide, The absorption of ash increases in clinker. If the clinker has more in-situ ash, then I get limited on my convergent factor, and I have to reduce the quantum of bozolonic or other cementitious material. Ipso facto, this both resulted into Because if I'm making, if my conversion factor is going low, that means I'm producing more OPC. And the biggest market for OPC here, non-French chain. So on one hand, I had... More quantity to sell in non-trade section both resulted into slightly lower realizations and relatively higher cost of production. However, let me tell you, this in no way indicates what we intend to do in the future. We intend to go back to our old philosophy of it keep on increasing the conversion factor. Optimizing the cost and keep on pushing trade sales, number one. Number two, which you have to also bear in mind, that the cement which will be produced and the embedded fuel cost has almost peaked out in our case. The lower cost contracted Bitcoin had not reached. Which has started reaching now. It was substituted by higher cost. We are at about, instead of guiding 1.82 per kilocalorie cost, we almost touched 1.95. And I feel, barring anything untoward happening in the Gulf War, the fuel price has almost peaked out. The PVC prices have started coming down. My packing cost has already started reducing. So, though I had in last concourse said that my cost will peak out in Q2 because of these factors, I think we have almost peaked out in Q1. And if anything undo or doesn't happen in Middle East, this cost should more or less stabilize. Rather, go down because raw material cost should also come down. Having said this, now I am opening the floor for question and answer.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, may please press star and 1 on your 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'll wait for a moment while the question queue assembles. The first question is on the line of Rajesh Ravi from HDFC Securities. Please proceed with your question.

Yeah. Hi, sir. Good evening. Am I audible?

Yeah, you are very far. Yes, sir.

Yeah, great, sir. Yeah, thanks for an opening presentation, quite enlightening. Sir, first on the housekeeping numbers, what was the fuel cost for Q1 blended and trade and, you know, the fuel mix you already mentioned, and what was the clinker factor and also cement realization?

Aray, bhai, after the theme, sir, Rath Poochle. You know, Charo Bhat is there in my opening statement. I have said that my fuel cost for the quarter was 1.95 per kilo calvin. I have said that I had to push more of non-trade sale because the conversion factor had come down. Number three, you have asked about realization. I will give it to Mr. Jain, who will give you exact realization number of trade and non-trade. And number four, you have said... That, what is the mix of trade and non-trade, that also Mr. Jain can give you.

Oh, yeah. Thank you, Mr. Sir.

Yeah, the Celsius I've done is 4919 per MP against... In Indian Rupees. Yeah, in Indian Rupees. 4,919 against 4,854 last June 25. This is Indian operation only.

4,884.

Yeah.

Okay, and what was the clinker factor, sir?

The clinker conversion is 1.5, so for current quarter, against the 1.58 of the corresponding quarter.

Okay, and trade mixed and blended?

Yes, 62% is the trade against 71 in June 25, and 60% blend ratio against the 70% of June 25.

Understood, understood. That's okay. Sir, you mentioned that, you know, the fuel mix were expensive when you move to thermal coal or you purchase to India. So, you know, when you normalize this, this is your procurement, which is now coming into Q2. How should the fuel, blended fuel cost look for Q2, assuming if the things remain steady where they are?

I had told you that our fuel cost has almost peaked out, barring nothing untoward happening in Middle East. We are looking at 1.95 today. It may hardly go up by 2-3 paisa, but that doesn't materially change the cost equation.

Okay, understood. So this is with the pet cook which you have, which were to be received from?

It started arriving, which was contracted for. And of course, if anything drastic happens in Middle East, it may or the equation may change completely. But as I say, we don't feel that there will be material increase. The one point, Rajesh, you have to understand is, in spite of all these challenges, Quarter and corner, year on year, volume growth is standing at staggering 70% plus.

Perfect, right. So this was my next question. Yes, yes. And that was the next question, sir. What is the outlook on the volume now?

And, no, no, it's not the focus on volume or anything. We are never volume focused. We are profit focused. We have never changed our focus. You will never find us changing our focus. Because of 17% growth already, I think, please understand, you have to appreciate this very clearly. I had guided in March 1 call that we should do 40 million tons in 26-27. We have already done from Indian operation about 10.4, 10.5 in Q1. We are on track to do 9 to 9.5 in Q2. So, by HY-2627, HY-1-2627, we should be at about 19.5 to 20 million tons. You also have to remember that if you look at the general sales mix of the industry, 48% of the quantity gets sold in first six months. And 52% in next six months. If we can, God's blessing, if we can do 20 million tons, then you can do your own calculation and see that we can go up from 40 to maybe 40.5 or 41. But I'm not guiding that. I'm still sticking to my guidance of 40 million tons. And I'm saying... The things as they stand today, we should reach 40 million tons, and we should deliver healthier profit Q2 onwards.

And sir, just continuing on this, realization which you mentioned 4919 for June quarter and which was 4752, so despite selling higher volumes in non-trade, you were able to see a decent improvement in realization by around 160 rupees. Is this understanding, correct?

Yes, you are understanding. If these numbers say so, what you have to understand is that this is again, you are just looking at... If you look at the console...

Mm-hmm.

Please pay heed to this advice. Henceforth, we will be talking of console volumes, console EBITDA. We will not be talking about which constitute, what, where it has come from. Grey cement business, total three cement, including its subsidiaries, will be delivering a number which should be accepted, which should be, and an EBITDA, total EBITDA. That's it. So, can we have the control volumes? One second. If you look at the consolidated, the volume stands at 114.5 for the quarter.

Okay.

The operational EBITDA without other income, repeat, without other income stands at 1272. The corresponding numbers, June 25. The volume was 99.6. Console, huh? Remember these are console numbers?

Yes, correct.

Operational EBITDA was 1333. Thank you, sir. Immersion factor change has compounded the effect on raw material cost, our total costing, and increase in non-trade sale. On my premium seat.

Could you also share March 26th console volume, sir?

26th console? 26th console volume? March 26th. March 26th console was 119.4.

Okay. And for full year was around?

One second. One second. You, please, hear me now. So there is a depth from 119.4 to 114.5. I'm sorry, isn't it? Now, this deal is majorly because of practically no sales in May and April and May in UAE. Because of what? And please understand that UAE, we are doubling. We are going to touch 7 million tons by Q3 FY 2627. So this number will keep on increasing, my friend. And that is what I am... I am requesting everybody to start looking Shree from a consolidated angle and not from standalone angle.

Yes, this is great. This will make it more comparable. And really, this also enhances the overall profitability in Mboskosree. Great, sir. Thank you, sir.

The next question is from the line of Amit Murarka from Axis Capital. Please proceed with your question.

Yeah, hi. Good evening, and thanks for the opportunity. Just a question on the non-trade. So while you said that... So, because of the issues in availability of gypsum and pet coke, there was a factor of fuel cost.

Mr. Baraka, let me tell you one thing, please. Gypsum has no role to play in ship from trade to non-trade. It is only that weaker quality of coal affects my quicker quality, which affects my conversion pattern, and that affects my tracing. My non-trade sale, I had to increase because my conversion factor was lower, and I had to go into the non-trade segment. Please be very clear, gypsum has no role to play in trade or non-trade. Gypsum has a role to play in affecting my non-trade cost.

And could you repeat that again? That's what my confusion was, like why you had to shift to non-trade because of this. So you mentioned that the clinker is something new there.

No, no, I could not get you. What have you said? One second.

No, could you please repeat, I mean, why you had to shift to non-trade because of the West Asia crisis?

I explained to you, my friend, Pitco has very low ash. It has hardly 1% ash. So... Coal or fuel, solid fuel, chemically and physically reacts with the limestone throughput. If I have very low quantity of ash in my fuel, the ash absorption in clinker will also be very low. If I am using a 20% ash content coal, the ash absorption in clinker increases. That means... The in-situ or within the molecule of clinker, because of low-quality coal, more ash is there, so I cannot dilute the clinker by adding more and more porosomic material. I have to use less and less porosomic material. That means more gypsum is to be consumed. Now, gypsum itself became expensive. Clinker is two-third of the cost of production. If that component has come down from 1.58 to 1.50, please understand it will have its own cascading effect. And if I'm having a lower conversion factor, I will have to look at OPC, sorry, primarily OPC buyers. If I'm looking at OPC files, then non-trade is the only segment where I can sell. But this is all one quarter data. The situation which we have faced, I don't think this will repeat in future, provided nothing exploded.

Sure, sure. So, on a more sustainable basis, what is the trade-non-trade mix that you would like to have then?

I would like to go back to 70% and 30% non-trade, yeah. But if it is what the figures would write. This company proves that we have been champions in trade sales. It is only because of this typical problem of low-quality coal to be consumed because of deadly swaps

that I have to reduce my conversion factor,

which funded my growth in trade sales, and I have to necessarily address non-trade markets. Am I correct?

Okay, okay, got it. And just also RMC performance, if you could share in the quarter.

Okay, RMC now, let us understand. We have 26 operational plants. We had 19 at the beginning of the year. We have added 8 plants in this quarter. We intend to add another 10 plants in next quarter. But please, RMC as on date is almost a year. As we learn the business, as we start. The operating efficiency itself should bring the EBITDA of this business to about 5%. She is not meaningfully attributing to my bottom line.

Thank you, sir. The next question is from the line of Kunal Shah from Dam Capital. Please proceed with your question.

Yes, sir. So, this first question on this 17% volume growth.

Kunal, Kunal, I'm sorry. I'm sorry. I can't hear you properly.

Kunal, sir, can you please use your handset? Yes, sir. Please, sir. Yeah, it's the answer. Yeah. So, this is the first question on the India operations and the 17% volume growth. Could you just help with how would this growth be looking across our regions, basically primarily between north, east, and south, and also some understanding on the regional utilization as well during 1Q?

I am giving the line to Mr. Sulawaj Jaju. He has all the numbers. He'll be safe.

First, coming to your question on capacity utilization, for north it is 66%, for east it is 60%, and for south it is 57%. Overall, it is 62%, which was almost the same. Obviously, this is at an expanded base, because a lot of capacities have also come up. Now, on your question on which region saw the maximum growth as compared to last year, So, south, since the new plant has come in, so our growth was more in south, like sales increased from 11 lakh tons to almost 16.9 lakh tons. And in north, there was a growth of 20%. So, these two regions were the maximum highest growth. East was almost flat as compared to last year.

Good morning, I would like to add one more thing. These crowds... Increase in South capacity utilization and IS growth is a factor of our selling more in the states of Maharashtra and Gujarat and not only South. South feeds West India market. So we have been able to push our sales in Maharashtra and Gujarat majorly.

I understood. This is helpful. Sir, just a follow-up here. This is an observation. Given that the yeast utilization, we have a lot of room there, and we are looking at flat volumes, so is it that the overall, I mean, the industry yeast in market was flat, or you've chosen sort of not to?

No, no, no, no, no, no. You, for comparison's sake, you look at Nuwama results. You look at the conversion factor of Nuwama. They had a conversion factor of 1.7, and they could do that because they had better quality coal and they had better accessibility to slide. If I reach 1.7, I will beat Nuwama hands down. I had a problem with my coal quality, so I had to keep my conversion factor constrained, and that is why I could not grow in East that much. I have in the beginning of the call stated... That on a consolidated basis, Shree will gradually reduce from today 88, 89 to 75%. That means Shree Cement volumes and UAE volumes will go up substantially. Now, this is a five-year plan. Give or take 5% here or there. But please understand. We've eased. A trade market, trades, you can push more of convert, higher conversion factors, cement, and this time, because of the coal quality, I could not increase the conversion factor. It is not that the flag is not available or flies are not available. It is only constrained by my own processes, disabilities due to low quality coal.

Understood. This is very helpful, sir. And just to close the loop on the cost bit, as you mentioned, most of the impact has been absorbed during 1Q. So, is it fair to assume that 2Q, which is broadly looking at operating deleverage, I mean, that which would be seasonal, and most of the West Asia crisis, the impact would be over, I mean, given the situation, I mean, status quo?

That is what I said, my friend, that if nothing, Drastic happens in Middle East, you should be able to look at, except for the quantitative variation, which is C's muscle. I'm saying again, the word almost, don't take it that if I have five paisa increasing, it will cost. Next quarter, you will say, sir, I will say the same.

Understood, sir. This is very helpful and all the best. Thank you so much.

Thank you, sir. The next question is on the line of Pinakin from HSBC. Please proceed with your question.

Yeah, thank you very much, sir. Sir, my first question is, while second quarter is seasonal quarter, if the external environment does not change, the energy prices, petco prices are wherever they are, should the second half operating cost be lower than the first half operating cost?

My dear friend, we anticipate so, but then we, as you may be aware, We never give any EBITDA projections or anything because it is not in our hand. It is market-related. Today, as we are sitting on 31st July, I can share with you that we have sold 3.1 million tons in this month. The demand is okay. Our plants are operating okay. The fuel cost has not substantially increased. And if calm remains in release, it should not substantially increase, the gypsum cost should come down, the conversion factor should increase because of better quantity, better, sorry, larger quantity of wet coke being used, which all should result into better profit.

Got it, sir. So I second.

Why wait up to HY2? Look at Q2 only.

Got it, sir. Sir, my second question is, you mentioned that whatever happened in the trade versus non-trade, will the situation normalize in the second quarter of trade sales going back to your historical averages, or you see that happening gradually in the second half?

Hopefully, yes.

Hopefully, yes. And as you normalize and sell more in the trade segment versus 1Q, that should have a positive impact on pricing and EBITDA profitability, right?

That is a logical conclusion.

Got it, sir. And lastly, sir, how are prices today versus the June quarter averages in your key markets?

Aray, bhai, so you are, today means we are, so we have not even entered our month, yaar. How do I give you that number? We have given you the number for June quarter 26, vis-à-vis June quarter 25. You are asking what is the average, as on 31st July, everybody find we are quite advanced in our digitization, but unfortunately I am not. We can send a mail to Jaju or Mr. Jain subsequently, and we will reply to this.

Got it, sir. Thank you very much.

Thank you, sir. The next question is from the line of Siddharth from Kodak Securities. Please proceed with your question.

Thank you for the opportunity. Sir, just wanted to check, out of our around 200-odd crore EBITDA, which is not in the standalone entity, what was the share of the UAE? Because you said the share of UAE went down drastically this quarter due to the war.

Thank you, Mark.

Sir, out of the total EBITDA, which is there in consolidated, but not in standard of statements, which is around 200-odd crores, what proportion is from UAE?

Well, I would not like to go into that kind of details for various reasons, but then it is out of UAE only. So, you can do your calculations, whatever you want to do. I will not go into specific number again. You are interested in Grey Cement Business EBITDA. We have given you Grey Cement Consolidated Business EBITDA. We have given you Grey Cement Consolidated 20T. You figure it out, my friend.

Let me put... Sir, just let me put it another way. Basically, what is the number sitting in Indian operations, which is not there in our standalone statement?

My dear friend, I know how to catch the nose both ways. Straight and roundabout. You are not going to get this answer from me.

Okay, sir, no worries. Sir, second, just a question, sir, on the straight cost. Sir, I noticed that there are lower quarter on quarter despite this diesel price hype. So, sir, any comments on this, sir? Lower what? Lower freight cost, sir.

Lower freight cost, sir. You do your math again. It's not lower.

Okay, sir, just a final bookkeeping question. Sir, what would you like depreciation and tax rate for this year?

2,400 to 2,500 crore is the depreciation number. And our tax rate will be about 30%.

Thank you, sir. The next question is on the line of Rahul Gupta from Morgan Stanley. Please proceed with your question.

Hi, thank you for taking my question. Just continuing on the previous question, in the last quarter, you highlighted that the UAE business reported 47 AED per ton of EBITDA. What would be that number in this quarter?

I'm not going to share it.

Then, sir, it's a request that please disclose the number for a expanding wage business.

I have understood your request, and I am just with folded head saying that I will not disclose this number.

Got it. Thank you so much.

Thank you, sir. We have not disclosed 47 AED as EBITDA last quarter as well. Last quarter, we had only discussed standalone. This is the first time. We are talking about consolidated results.

Sir, you had reported 247 AED of revenues. What would be the number this quarter?

My idea is saying 247 AED is what? What is that number?

The revenues for the UAE business? So what would be the similar revenues for the first quarter?

I am again saying, I have given you the quantity. I am not going to give you the numbers.

Thank you so much. Yes, bye.

Thank you, sir. The next question is from the line of Jasandeep Singh Chadda from Numura. Please proceed with your question.

Chadda, I'm grateful for you all these days.

Aye, sir. Thank you for the opportunity. Sir, my first question is largely on the demand front. Will it be possible to give some regional trend, what you are seeing in different regions, both for the industry and the industry?

You just shared how we failed in Q1.

No, no, sir.

I mean, 20% incremental demand in the East. And how much was up? South was significantly better because of new... South, you see, we had started new plant because we could penetrate the West India market. So, he has given you those nevertheless. In India, the industry is expected to grow at about 7 to 8 percent. We hope to catch up with 10 percent. 35.4 is what we did last year, and I'm right at about 40 this year.

I understood, sir. I was actually, you know, looking forward to, you know, second quarter this month, how you've seen the impact of...

From Bombay, you can't look up to Calgetta, so travel 2,000 kilometers.

Definitely, sir. Sir, my second question is largely on CapEx. If you can, you know, share the CapEx guidance for 25-28 and also on the North-ish front.

Thank you. I have guided Q4 about 1,500 crores. In Q1, we have done 426 crores. I maintain my guidance at about 1,500 crores for the year.

Understood, sir. Thank you so much. And for, you know, North, it's, although you will be commissioning that plant in FY29, end of FY28, I mean.

Q428.

Yes, Q528. Just wanted to understand how the economics will be or margins will be when we compare it to our eastern assets.

You have, I think you have misread one number. You are getting guided by 1800 crore for 1 million ton plan. Correct? So you are saying 18,000 rupees per 10 capital cost. How the viability will come up? So please understand that we have enough limestone in that region to go up to 4 to 5 million tons. We are creating the infrastructure for 4 to 5 million tons of final capacity. It is not that the first million ton is going to eat up entire capital. The facility is being created for four to five million tons. One million we are starting to test the market and see how fast we can grow in that market. There are only two regions in the northeast which can have cement. Assam and Meghali.

Meghali.

Right? There is almost a duopoly there. Star and Dalmia. So, you know how things... It's the shape of where duo bodies are there. So fine. And we have never proven ourselves to be running fast enough to acquire $5 a bit of plants at $110 k-pay. So we are taking learning steps. We'll take our steps. And maybe then we should be able to come to $4 to $5 million of final capacity. It will take a short time. But we have to create the facility accordingly.

No, understood, sir. Thank you so much. It means that subsequently, you know, CapEx will be at lower rate. Just one, if I can squeeze in one. And just one last question for a second question that over the last year, Shree Sement was doing a drive of improving realization until last quarter. The drive had worked very well. You have reduced the, you know, the gap to around 10 to 12 rupees per bag, if I'm not wrong. Any improvement on that front in this quarter or for this year?

In this quarter, there has been no improvement, but we are at it this quarter. We had a lower quality. So I was fighting on production front. I was fighting on cost front. I was trying to push. The non-trade segment. So, this was not the ideal quarter. This was a very difficult quarter, and we feel going forward, we should be on track to try and catch up the delta.

No, understood, sir. It makes sense, and I'll soon see you in Kolkata, sir. Thank you, sir. Please. Pleasure.

Thank you, sir. The next question is from the line of Ritesha, from Investec. Please proceed with your question.

Hi, sir. Thanks for the opportunity. Sir, would you like to highlight any specific cost levers that we are working on? Would love to hear from you, commentary specifically on freight, rigs, radio siding. I think that is one.

Okay. Now, listen. Let me give you an insight. For fuel cost, you can buy electrical commercial vehicles at two and a half times capability cost. A 14 lakh commercial vehicle, ice-based means diesel-based, costs us 1 CR for electric, but then the cost of fuel comes to 110. Now, we are working on the viability. We are working on all kind of adjustments and that. We are committed to commission about 100 e-commercial vehicles in this year, and hopefully it should keep us in good stead. Not only this, in our mining activity, where we use a lot of dumpers and dozers and things like that, there is a good possibility of electric vehicles substituting diesel vehicles. So, we are working on all that. Those are new cost levers. We are, of course, keeping on looking for renewable energies. It will be surprised to note that our renewable energy component to total energy has increased from 61 to 65% in this quarter. So we are working on all those levers. The freight means the lead distance. Yes, we are working on it. The railway sidings, we have asked under the, what is that scheme, yeah, Gati Shasti scheme, we have given some contracts, but the railways deliver at their own cost, at their own pace. So all these are there. I have repeatedly told all you guys that the focus of free is not volume or top line, we are bottom line focused, and we will do all such things which augments our bottom line. And this has turned out clean for the last 40 years.

Correct. Sir, would it be possible for you to quantify how much was the volumes by rail, say, last year?

Oh, nothing, yes. Rail was about 11% or 19%? 9%. 9%. Rail we could do only 9% last year, in this quarter.

Okay. Okay. And, sir, last quarter you had indicated that we were exploring BESS as well. Any progress over here you had indicated that we could potentially...

You mean to say battery energy storage systems?

Yes, sir.

Yes, we have identified a few. We have implemented in a small way, and if it succeeds, we will go whole off.

Sir, will it be possible for you to explain...

The biggest bottleneck in using BESS is that if you put in 100 units... You can extract only 85 minutes. 15% of the total energy stays within the best system. So whatever cost advantage or disadvantage we have, we have to load it with a factor of 85% availability to come to actual cost-benefit analysis. Now these are all theoretical calculations. That's why we have put in a small system, see how it works, what the viability is. And then we can always multiply that number.

Sure, sir. And, sir, just to link to questions, sir, I think one of the quarters you had indicated that we are looking at side-slash as an alternative, basically in blended...

No, no, no, I should come back again.

Besides flyash, we were looking at other cementitious material which can actually go into PPC. Any update over here, sir?

No, we are still looking around. We still have got something. We can still use a few things. I would not like to share it for trade reasons. But yes, we are working at additional cementitious material to increase or improve the conversion factor or bring my cost down.

Okay, and sir, just last one, clinker factor, sir, how much was it for the quarter and any aspirations a year out for that?

We were at 1.5A June 25 quarter. We are in this quarter 1.5A.

Okay, this is right, sir. Thank you so much, sir. Thank you. Really appreciate it.

Thank you, sir. The next question is on the line of Satyadeep Jain from Ambit Capital. Please proceed with your question.

Hi, thank you. I just wanted to follow up question on the North East on the timeline of April 28th. On the media, we keep seeing all these news around public protest, public hearing protest and all. Just given the logistical challenge.

Today morning, 8.30, there was a meeting and all approvals are in place. This is as of today morning, 8.30 meeting. So all your media reports, you can sell them.

So just given the logistical challenge, you're sitting at the plant in North Asia. Yes, it is.

It's never easy to make money, my friend. So we have, we don't mind meeting all those challenges, and we have proven we are the only Guinness Book World Record holder of commissioning a brownfield plant within 14 months. So please don't doubt our capabilities.

Thank you. Thank you, sir.

Thank you, sir. The next question is from the line of Naveen Sahadio from ICICI Securities Limited. Please proceed with your question.

Yes, sir. Thank you for the opportunity. Two questions. So you gave the console volumes as well as, of course, the standalone volumes are reported in the press release. The difference is roughly a million ton. And there is, of course, a calculated difference in the Consol EBITDA and standalone. So, is that, on a per-turn basis, a representative?

You are missing a point. In Consol, I have two more businesses. One is Sree Cement East, where there is a basement volume. The other is, I have an AAC plant. The third is we operate, through a 100% subsidiary, a station at Raipur. So it is not as easy, Baba, that you deduct this, you see the volume, divide it by volume and say, 500 rupees a ton is the AED, 500 rupees a ton is the EBITDA at UAE. No, you can't, you can't assume it like that. I am not giving you the number, I am not giving you the number. Thank you. I am saying that, henceforth, please look at the consolidated number.

Yeah, sure. I appreciate that. My second question then was on the RMC. So, in the previous quarter, I think revenues were about 90 crores, but we are scaling this up. Full year revenue also were around 240 odd crores. So, is it possible to share Q1 RMC? One second, one second.

Come back again. Come back again. I'm sorry I missed the question.

My question was on RMC.

Your voice is cracking, my friend.

Okay, I'll keep up a little. Is it better now, sir? Okay, fine. I'll do that. Thank you.

Thank you, sir. The next question is on the line of Rajesh Ravi from HDFC Securities. Please proceed with your question.

Hi, sir. Just on the capex comment, I missed on that. You mentioned that around 500 crore was spent in Q1 and the remaining three quarters, 1,500 crore, or I misread that?

Total for the FY is about 1,500 crore. We have spent 500 in Q1.

Sorry, your voice was not clear, sir. Total is how much?

Total is 1,500. We have spent $450,000 plus in Q1.

Okay, and for next year, what sort of capex one should work with?

I'm not at the moment. Please give me one more quarter, I'll get back to you in H1 call call.

Sure. And sir, RMC revenues were how much for this quarter and the mass quarter?

I'm asking Mr. Jain to answer to it. Yes, RMC revenue is $109,000 for this quarter. Yes, I'm new to everything.

March quarter?

109th of this quarter, 19th of March 26th, and 40th of June 25th.

Okay, and this is already operating at what EBITDA margin, sir?

I said there is no EBITDA at the moment in RMC, my friend. I said it right in the beginning.

Sorry, the voice?

Let all these plants stabilize.

Okay. Understood.

Two guys get guided by the huge EBITDA number being reported by one of the peer group companies where they talk of 474 plants. Now 474 plants is not under their direct ownership. It is under a franchisee model. Maybe they are having 250 plants. Balance is franchisee. They just... They just throw a number to you, guys. Nobody looks at the ownership of the 474th man.

And now, sir, just one small request, because we would also love to work with the console numbers. If it is possible to share for the benefit of everyone, we consolidate quarterly volumes since the start of FY25.

Hi, dear friend. Any detail you want, you will get it from my colleague, Mr. Subhash Jaju. You can send him a mail.

Sure, sure.

But tell me one thing. This hair-splitting exercise increases my remunerating power to my shareholders, or it does nothing to it?

Sorry, I'm not able to hear you properly, sir.

I am saying that I'll give you all these numbers. These numbers you can have from Mr. Jaju. But does it in any way, impact my, rewarding my shareholders? My shareholders will get rewarded from console number only, and so, for your comparative analysis, you want these details? To the extent possible, Mr. Yadu will share it with you. You can send it on me.

Agreed, sir. I believe the console number is more representative of the company, and that is why it is always great to have, you know, work with the console number.

Lovely, lovely. Thank you.

Thank you, sir. The next question is from the line of Harsh Mettel from MK Global Financial Services. Please proceed with your question.

Yeah, thank you for the opportunity. I have a couple of bookkeeping questions. First one is the sequential change in the lead distance, and second is the net cash available in the balance sheet as on June 20, June quarter.

First of the lead distance, it has come down from 459 to 445. Okay? Now, next cash or consolidated cash, what do you want? This is a successful position, which has increased from 7773. This is net cash. And look at the investment number, yeah. It doesn't matter. You take it down here. You take net cash consolidated, double seven, double three, was June 25. It has gone up to 8348 in June 26. Investment number. Investment number is there somewhere.

Sir, just wanted to understand from you, given that we have such amount of cash in our balance sheet, have you had the thought of scouting for any inorganic growth?

No, no, no, we are not in the inorganic game at all, my friend. As I said, we don't have the heart to buy a $5 habitat capacity at $110 and then come and say... Then come and have the cheek to say that probably we have taken a wrong decision.

Thank you. These were the questions.

Thank you, sir. We have been in business for the last 40 years, my friend. We understand it.

The next question is on the line of Girija Ray from Nirmal Bank. Please proceed with your question.

Hi, thanks for taking the question, and many congratulations for one particular thing, that is the capacity utilization, which has increased this quarter. So, I'm very happy that capacity utilization is transferred to 61-62%. That is the only concern with me. So, how do you see the pricing is going to pan out going forward?

I have never in my 40 years taken a call on how the selling price will be. Sorry. It's a market-related activity. I don't take a call. I don't want to take my investors up the garden path. You do your own estimation and calculation. I can give you a broad guidance on what the cost will be if provided external environment remains the same. It has given. But price, I do take a call myself.

Thank you, sir. Thank you very much.

Thank you, sir. The next question is from the line of Prateek Kumar from Jefferies. Please proceed with your question.

Yeah, hi, good evening, sir. I have just a couple of questions. Firstly, on your…

Go ahead, go ahead. We have already passed one hour here. I have a flight to catch. Tell me.

Just one question then. Like in quarter two, like you said, all your variable costs have peaked. So on our total cost of operations, except for operating leverage, which could be like 100 to 150, they are not looking at any cost changes quarter on quarter. I know it's a repetition.

Wait a minute, my friend. I have said that Q1 is a non-comparable, non-standard quota. Have we ever come down to 9% pet coke use? It's unimaginable. So please, Q1, you grant us the leeway, then it was extremely difficult for us. Can you imagine three women selling much women non-trade, whereas last three years we have been talking of primarization, we have been able to reduce the data between the peer group and us. This is absolutely abnormal quarter. Please, give me one more quarter. It's one minute of more meaning.

Sure, thank you. And just confirming, 1,500 crore KPX, which you said, includes your UAE expansion, so it's a console KPX item for your company.

Oh, UAE expansion. One second, one second, one second, my dear friend. 1,500 crore is India operation. Thank you very much for pointing it out. UAE expansion is already underway, and it is being funded out of UAE operations only. We are not remitting anything for UAE. There is enough cash sitting out there.

So what is the console capex guidance for the company as you will move to console model now?

I'm very sorry Pratik. I should have had this number. I don't have it. I will share it to you as soon as I go back to Calcutta. Today I'm in Biawad. I should be there by 4th or 5th. We'll share this because I just have to look at the UAE data. That's all.

Sure. Thank you, sir. These are the questions.

Thank you, sir. Ladies and gentlemen, in the interest of time, that was the last question for today. I would now like to hand the conference over to management for closing comments.

Hi, I just want to repeat what I've been saying on this call. Please consider Q1 as an abnormal quota. If nothing untoward happens, I will be confirmed. We should regain our supremacy in our trade change, and let us see how things pan out. Thank you very much, and have a great day.

Thank you, sir. On behalf of ICICI Securities Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.