Dalmia Bharat Limited (DALBHARAT) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the earnings conference call of Dalmia Bharat Limited for the quarter ended 30th September 2025. Please note that this conference call will be for 60 minutes. [Operator Instructions] This conference call is being recorded, and the transcript will be put on the website of the company. [Operator Instructions] Before I hand over the conference to the management, I would like to remind you that certain statements made during the course of this call may not be based on historical information or facts and may be forward-looking statements. These statements are based on expectations and projections and may involve a number of risks and uncertainties such that the actual outcome may differ materially from those suggested by such statements. On the call, we have with us Mr. Puneet Dalmia, Managing Director and CEO; Mr. Dharmender Tuteja, CFO; and other management of the company. I would now like to hand the conference call over to Ms. Aditi Mittal, Head, Investor Relations. Thank you, and over to you.

Good evening, everybody. Welcome to quarter 2 earnings call of Dalmia Bharat Limited. We've declared our results today and all the relevant data and presentations have been uploaded on the website. I hope you had a chance to go through it. This is the time of the year. I'm sure all of you are in a rush to go back home, so I'll not take much time and hand over the call. But before that, wish you and your family a very happy, prosperous and safe Diwali. Over to you, Mr. Dalmia.

Thank you, Aditi. I also would like to extend my warm wishes to everyone for a happy and prosperous Diwali. And I want to jump straight away into what has been one of the biggest gifts for India this festive season. And without a doubt, it has been the GST rate cuts. This is a commendable initiative by the Indian government aimed at boosting consumption and demand at a time when the economy is navigating through external geopolitical pressures. Together with this, the RBI rate cuts, income tax rebates announced in the FY '26 budget and easing inflation, these measures create strong levers for driving a consumption-led recovery in the economy. The reduction in GST on cement from 28% to 18% is a long-awaited fiscal relief and a very welcome step. As a responsible citizen, we had pledged to pass on the entire benefit to the consumers, and we have accordingly undertaken the same. This significant reform is expected to boost consumption and support housing demand over the medium to long term. Additionally, the 10% tax cut on cement will ease working capital requirements for channel partners, thereby improving liquidity across the supply chain. Now I turn to industry demand, prices and supply. Coming to the demand side. While I believe that the Indian cement demand should continue to grow at a CAGR of 7% to 8% during this decade, the current year has started a bit softer than expected. Both Q1 and Q2 demand grew at about low single digit, driven largely by erratic and heavy rains and flash floods across the country. Last month of September was slightly slow as the change in GST regime further led to slowdown in inventory pickup by the channel and postponement of noncritical purchases. Having said that, I believe that the second half of the year should witness pickup in momentum, with improvement in customer sentiment, pent-up demand and consecutive good monsoons. In fact, the recent RBI move to potentially allow ECBs for the real estate sector could further support cement demand from the housing sector in the medium to long term. On the pricing front, cement prices largely held up during quarter 2 as well despite a much heavier rainfall, which I believe is a big positive. Now I turn to Dalmia performance during this quarter. Coming to Dalmia's performance, profitable growth remains our top priority, and we are focused on driving it through sustained improvement in revenues and deepening our cost leadership. I'm personally working with the team to strengthen our brand positioning in the [indiscernible] market, and I'm happy with the progress we have made so far. During the quarter, our revenues improved by 11% Y-o-Y to INR 3,417 crores, while EBITDA grew by 60% Y-o-Y to INR 696 crores, which works out to be INR 1,013 per ton for the quarter. This is the second consecutive quarter where we have delivered 4-digit cement EBITDA per ton driven by better realizations and our control on costs. Coming to the capacity growth plans of Dalmia Bharat. In the last earnings call, I had detailed out our capacity expansion road map. And in continuation of the same, I would like to mention that both Belgaum and Kadapa expansion projects are progressing as per plan, which will give us 12 million tons per annum of cement capacity for West and South markets in the next couple of years. Beyond this, we have commenced the trial run production of the new 3.6 million ton per annum clinker line in Umrangso, Assam in September and are expecting commercial production to begin in Q3 of FY '26. This clinker capacity will give us an additional opportunity to add 2 million to 2.5 million tons of split grinding capacity in future in the fast-growing markets of Northeast and potentially East India. Furthermore, the insolvency process for [Technical Difficulty].

Ladies and gentlemen, we have lost the line of the management. Please stay connected while I rejoin the management. Thank you. Ladies and gentleman, thanks for your patience we have the management line reconnected. Sir, you can proceed. Thank you.

Yes, Dharmender here. Sorry for this brief interruption. I'll start my address once again. Let me give an overview of our financial performance. As Puneet ji mentioned, our performance for the quarter was continued to be guided by profitable growth. During the quarter, we witnessed an impressive revenue growth of 10.7% Y-o-Y to INR 3,417 crores, supported by increase in realization by about 7.6% Y-o-Y and volume growth of about 2.9% on a Y-o-Y basis. Our trade share stood at 52%, while premium product share was at 22% during the quarter. Coming to the cost line items. Our raw material cost per ton of production marginally increased by 1% Y-o-Y to INR 799 per ton despite the impact of mineral tax imposed by the government of Tamil Nadu. Further, our power & fuel cost per ton of production marginally increased by 1% Y-o-Y to INR 1,017 per ton. During the quarter, we have achieved RE share of 48% on a consumption basis. Power cost efficiencies will continue to improve with the rising share of renewable energy in our consumption mix. We have commissioned 93 megawatts of RE capacity this year -- this quarter, mostly through group captive mode. And we are on track to scale our operational renewable capacity to 576 megawatts by end of financial year '26. During the quarter, our blended petcoke and coal consumption cost has remained range bound at about $100 per ton on a Q-o-Q basis. Blended fuel cost during the quarter stood at INR 1.38 on per kcal basis, while the CC ratio was 1.62x. Our logistic cost during the quarter declined by 3.8% Y-o-Y to INR 1,060 per ton. Our DD percent stood at 60% this quarter, while lead distance was at 287 kilometers. We continue to strengthen our position as one of the lowest cost cement producers. Our EBITDA per ton stood at INR 1,013 per ton, and we achieved an absolute EBITDA of INR 696 crores. This is a significant improvement of 55% plus Y-o-Y on both absolute and on per ton basis. Our EBITDA margin during the quarter stood at 20.4% in Q2 FY '26 compared to 14.1% in the same quarter last year, which is again a big jump of almost 1.5x over 12 months. On the GST front, as you are aware, the government has reduced GST on cement sales from 28% to 18%, which is a big welcome move. Another implication of the same for the sector will be on the accrual of incentive income. With the lower GST rate, the approval of incentives will now get deferred. Therefore, we expect total incentive accrual for the year to be around INR 240 crores compared to our earlier guidance of INR 300 crores. However, at the same time, government has also removed the coal compensation set, which will give us a benefit of about INR 20 crores during H2 this year. During Q2, we have accrued incentives of INR 64 crores and received INR 50 crores. For H1 FY '26, the total accrual was at INR 138 crores and collection was INR 91 crores. At the end of Q2 of FY '26, our total incentive outstanding is INR 800 crores. During H1 of FY '26, we have incurred CapEx of about INR 1,189 crores and our CapEx spend for FY '26 is estimated to be about INR 3,000 crores. We have already started the trial run in Umrangso clinkerization project in September. Belgaum and Pune projects are also on track to bring -- to being commissioned as per announced schedule. The work on Kadapa project has also commenced on expected lines. FY '26 CapEx spend will be lower versus earlier announced estimate due to favorable credit terms we have been able to negotiate from equipment suppliers and some postponements of non-budget CapEx to next year. On the debt front, at the end of the quarter, our gross debt during quarter end stood at INR 6,621 crores and our net debt stood at INR 1,602 crores. The increase in net debt is largely attributable to reduction in the value of IEX shares, which is part of our treasury. Our cost of borrowing also reduced to 6.9% during the quarter as we had taken most of the long-term loans linked to the external benchmark like T-bill rates, which have corrected in line with the repo rate cuts, while the bank MCLR takes longer to correct. Our balance sheet position remains strong, and our net debt to EBITDA stood at 0.56x. Lastly, the Board has declared an interim dividend of INR 4 per share. With this, I open the floor for Q&A. Thank you and wish all of you a very happy and prosperous Diwali.

[Operator Instructions] The first question comes from the line of Amit Murarka from Axis Capital.

So the first question is on the update on the planned expansions at Jaisalmer and Northeast. So in the last call, you had alluded to that. So what is the status? And by when do you think it can be actioned?

I think Northeast has already started trial run. And I think -- yes, go ahead.

Sorry, I was talking about the 2 million to 2.5 million ton new grinding unit that you had highlighted in the last quarter.

So Amit, last year, we had added 2.4 million ton of grinding capacity in the Northeast. The idea of starting work on another split GU, we will probably do it as we ramp up the GU that we added last year. So as you -- we expand capacity and the clinker comes on board and we ramp up utilization of our previously added unit, we'll start work on the next split GU. So I think we are still a couple of quarters away before we give clarity on that one. And on Jaisalmer, the work on land acquisition and getting permissions and working towards the EC, the work is on. And we have time up until March 2026 before which we can break ground and come back to you. By then, we are reasonably also optimistic that we'll have an outcome on what happens in the JP transaction. So I think wait till March '26 before we'll update you on both the Northeast and the Jaisalmer expansion.

Also on the statement on profitable growth, which I think was mentioned last quarter and this quarter, too. But when I see realization actually surprisingly, it has dropped 4.3%, actually, which is higher, I believe, than industry price behavior. So one, why would that -- I mean, the declines be higher than the industry?

I think, again, as I said, every quarter, there are -- there will be regional mix. There will also be segment mix, which will impact. I think directionally, we are heading in the right direction. And I think we will not be able to comment quarter-to-quarter because there are lots of variables which are at play in every micro market. But directionally, you will see that after 5 quarters of 3-digit EBITDA, Q1 of this year and Q2 of this year is 4 digit. And I think consistently, we think we are improving our price positioning in every market. And I think we are on the right track.

Got it. And any guidance on volume? Generally, like I believe you have been growing 1.5x of market. So any number that you would want to give for that?

I don't want to give any number, but I just think H2 will be better than H1, hopefully.

And just lastly, if I can. The CapEx cut that was highlighted at INR 3,000 crores. So what exactly has led to that? Better credit terms is what was said, but generally, if you can explain it a bit more.

Yes, as I said, with some of the critical equipment suppliers, we were able to negotiate better credit terms. So that has reflected in lower outgo of the cash flows in this year. Spill over to the next year.

Our projects are on schedule in terms of commissioning time. So there is no delay in that. It's -- both the projects are on time.

We take the next question from the line of Satyadeep Jain from AMBIT Capital.

Just had a question on the compensation structure change. It seems interesting. Maybe it seems like there was no variable compensation structure earlier and what are the changes outlined in this?

Sorry, can you repeat the question, please, once again?

Just wanted to ask on the variable -- in the presentation, it is mentioned that there is a variable compensation structure that has been introduced. Does it mean there was no variable compensation earlier? And what are the changes? Just want to understand the metrics.

Yes. So earlier, I think before this year, it was all 100% pay was fixed pay. We have introduced a variable pay structure for the senior and middle management from this year onwards, which is financial year '26 onwards. And this will be the first year. And there are 3 variables which will impact this. One is the company performance, second is the individual performance; and third is safety. So these are the 3 metrics, and the weight is different at senior level and middle level. At a senior level, company performance has a larger weight. At a mid-level, individual performance has a slightly larger weight than company performance. So I think overall, we just want to start this journey this year and from next year onwards or over the next few years, we'll make it more broader. And the total amount of variable pay will be around 15% to 25% of total pay.

And how do you define company performance? Is it ROCE? Is it volume, EBITDA? Is there any metric that you would use to measure the performance?

I think these will be our internal metrics where we will have -- we have certain budgets in terms of what we need people to perform on. But these metrics will basically align management compensation to shareholder outcomes.

And secondly, maybe touching on the question that Amit had asked earlier. In terms of maybe directionally, if you look at volumes maybe for this year and next, are you looking to grow in line with market? What is the thought process generally on -- I know profitable growth, but just wanted to ask this question in another way. Would you grow in line with industry? Would you look to take market share?

I think I've said this repeatedly that our strategy will be different in different micro markets, depending upon what our objectives are. And I think other than that, I just cannot say more because depending upon the demand-supply situation, depending upon the strategic importance of a micro market to us, we will decide -- and depending upon how much excess capacity we have, we will decide our strategy based on these parameters. So I think I cannot reveal more than that because there will be a different strategy in every market. In some markets, we will go for share. In some markets, we'll go for margin.

We take the next question from the line of Sumangal Nevatia from Kotak Securities.

Sir, my first question is on the capacity expansion plan. So we are still continuing with the 75 million ton milestone for FY '28. So my question is, just want to understand the 14 million ton gap, which we have 13.5 million, do we have a bottom-up organic plan or there is JPA or some other inorganic contribution also in the 75 million tons?

Sumangal, I've said this earlier also. I think we are waiting for the JP outcome, which we expect hopefully this quarter, let's see how it plays out. And parallelly, we are developing all other projects to be in the state of readiness. So basically, I think we will be able to give you some more color on this by March '26. And as I said, we still have 2 years after that. So we don't see a major challenge. We also have 2 million, 2.5 million tons of low lead time expansion possible based on the Northeast clinker. So I think I will be able to give more visibility only in March '26.

Understood. Okay. Maybe I'll keep this discussion for later. Second question, sir, is on the volumes, 3% odd growth. Do we think we have kind of compromised some market share for the realization and profitability as we discussed earlier? Or our sense is that the market itself was quite weak in the second quarter?

Sumangal, as I said, our goal is profitable growth in some markets based on what is our unutilized capacity and the demand-supply situation. And in some -- and what is our strategic goal, we will go for market share. In some markets where we have high utilization of capacity. And -- but again, depending upon the competitive dynamics, we may go for better margins. So I think there is no one-size-fits-all approach here. I think we want to be very, very focused and balanced in our approach. And I think I cannot reveal more than this micro market by micro market, how we are going to play it.

Understood. And just one last question. It was good to see that we've offloaded some stake in IEX. Are we continuing here? And do we expect in the next -- I mean, any time line you would like to indicate as to when do we completely exit?

I think there was a recent SEBI order on the fact that there was some insider trading in IEX shares by the -- some people involved in the regulatory agency. So let us see what happens and how this will play out. I think this is -- we have said that this is not a core investment for us. It's a short-term investment. There is an overhang because of this regulation. But it seems like there is probably some investigation happening by the government. So we need to just figure out how this plays out. And I think I cannot say more than this. We have already sold more than half our position. And the rest of it, we will liquidate as and when we need the money.

We take the next question from the line of Pinakin from HSBC.

So I have 3 quick questions. My first is on costs. We have seen petcoke prices in international market inch higher, USD INR has changed. So should we assume that the costs have bottomed out and they would move higher in the second half or the seasonally high volumes should offset any variable cost increase?

The petcoke prices currently are around INR 116. So naturally, there will be some pressure of -- cost pressure on the external front coming into the cost. But of course, we are also on track to reduce our variable cost. So we'll try to partly cover this and ensure that the impact on the P&L is minimum.

Sure. My second question is again on going back to pricing. Just trying to square the price decline that Dalmia reported versus flat prices in the market. Has there been a material change in the trade mix or the ratio of premium cement being sold this quarter versus the previous quarter, which could partly explain the headline ASP per ton decline?

The trade percentage is 62%, which is lower than the previous quarter. So that is one of the reasons you see the realizations being lower.

Sure. My third question is again on industry pricing. Sir, do we -- if the demand does improve in the second half of the year as government CapEx picks up and the other initiatives in the economy start flowing through, can we see higher prices by the industry, especially given the way petcoke prices have moved higher or cement price hikes look difficult in the current regulatory environment?

I think right now, the industry has passed on the entire reduction of GST. And I think our focus right now is to ensure that we comply with the law that whatever is the gain has been completely passed on to all our customers. I think how will prices behave in the future is anybody's guess. All I can say is if I look at the last quarter, the last quarter was despite being a monsoon quarter, prices were reasonably stable. So I think I'm a little bit more optimistic in terms of price stability. If demand improves, hopefully, prices should remain stable from there.

Pinakin, does that answer all your questions?

Yes, it does.

We take the next question from the line of Navin Sahadeo from ICICI Securities.

Congratulations on maintaining the 4-digit EBITDA per ton number. Only one question. In this reduced GST rate regime, are you witnessing any trend of premiumization in the sense, as you mentioned, that prices is anybody's guess and maybe like we want all the consumers to benefit first before the prices take their own course. But from the premiumization front, is there any gain that you are seeing either for you or at a broader industry level? And in the same breath, if I may also ask, if the prices on its own have come down, then is there a way that like certain volume push schemes to dealers could be controlled a bit so as to fetch a better like profitability or maybe a better realization for us? These were my questions.

I think our premium product percentage is flat only from last quarter to this quarter, I mean, on a Y-o-Y basis. And as far as, again, dealer margins are concerned, this will depend upon the competitive pressures in every market. You have to make sure that your value proposition for your channel is competitive compared to what other brands offer. And it also depends on how fast your rotation is, how quickly your product sells so that they can make -- they can turn their inventory quickly. So I think the only good news is that because GST rates have come down, there is more liquidity in the system. So I think that should impact the ability of the channel to take more cement than -- or finance more as compared to what they would do earlier.

We take the next question from the line of Raashi from Citi.

Just on the cost side, how much is the petcoke or the fuel consumption cost today versus $100 in the second quarter?

Currently, it has come to about INR 1.38 on per kcal basis, and you can expect a marginal increase in the coming quarter.

And are you still maintaining a cost reduction target of INR 150 crores to INR 200 crores over the next 2 years?

Yes, please. That is on track.

Okay. Just on the incentive, the accrual, you said was INR 60 crores and received was INR 50 crores, if you double check these numbers.

Yes, INR 64 crore accrual and INR 50 crores is collection. And we expect to catch up on the collection in the quarter 3.

Got it. CapEx for FY '27?

That we expect to be about -- close to about INR 4,000 crores.

And just last question would be on the volume front for the industry and for -- like I think earlier you had quantified that you were expecting 6% to 7% industry volume growth for FY '26. Is there still some quantification from your side? And second is, are you likely to sort of be in line with the industry or higher?

Can you repeat the question, please, Raashi? Sorry.

So FY -- I think earlier you had highlighted that you had expected the industry volumes to grow 6% to 7% in FY '26. So like are you still -- is there still a quantification to your FY '26 expectation for the industry? And where do you stand vis-a-vis the industry for this year?

The first 2 quarters growth has not been to the expectations, but still, we expect that in the second half, the growth should be much better. And of course, our focus continues to be on the profitable growth and exact levels will not be able to hazard a guess.

The next question comes from the line of Prateek Kumar from Jefferies.

Congrats for good set of numbers. My first question is on benefit of removal of coal sets. You said INR 20 crores for second half. So full year benefit is like kind of INR 40 crores benefit from this and INR 60 crore loss from the other incentives which you are accruing. Is that right?

Yes, current year benefit is about INR 40 crores because we are still carrying some opening stock. But next full year, it will be close to about INR 50 crores to INR 55 crores.

For coal sets next year benefit is INR 50 crores to INR 55 crores. That's what you said?

That's right, yes. Because current year impact gets slightly reduced due to the opening stock, which we are carrying.

Okay. And coal prices have generally been languishing versus petcoke, which has been rising. So is there an evaluation on increasing coal mix in the business also in context of the GST rate changes, benefit related to that?

Yes, we do take a call depending on the suitability of the pricing between coal and petcoke. And whatever is the cheapest fuel mix, we try to use it.

Okay. One other question. We recently announced key management personnel from BCG. Can you discuss that role, please?

We've hired a person who is our Chief Strategy Officer, and his name is Anirudh Tara. He has come from Boston Consulting Group, and he has 15 years of experience in building materials and also leading growth and transformation for several of his clients.

So he is like kind of replacing Mr. Bansal, who was earlier Transformation Officer as well?

No, I think he's the Chief Strategy Officer of the company. And I don't think he's -- that role is shared between the CFO and the Chief Strategy Officer.

The next question comes from the line of Rajesh Ravi from HDFC Securities.

My first question pertains to this incentive run rate you mentioned to come down to INR 250 crores is for this financial year? Or this is like next year onwards, the run rate you are talking about?

INR 250 crores, which I mentioned was for the current financial year. We're just checking GST cut impact of the second half. And next year, it can be around again INR 200 crores.

Okay. So from INR 100 per ton, which we are currently seeing for the last few quarters, this should come down to INR 60 per ton. Is this understanding correct?

Yes, close to INR 55 also, yes.

Understood. And second, if I look at your trade sales share, which you mentioned at 62% is almost a 4-year low. So any specific reason or strategic thought behind being more aggressive in non-trade?

Sorry, what's -- can you please repeat your question?

So your trade sales share, which you mentioned is at 62% for Q2. If I look at the numbers you shared earlier, this is almost 4-year low this quarter, trade sales shares. So is there any specific thought to be aggressive in the non-trade segment and hence the trade sales is lower?

I don't think so. I think a few percentage point variation may happen quarter-to-quarter. But I don't think it's material.

Okay. So broadly, can we assume that you would be targeting to keep a trade mix -- trade sales share between 60% to 65%?

I don't think we want to give a trade sales target. I think it's, again, as I said, a strategy that we will follow in terms of achieving profitable growth. And I don't think we want to give you a guidance on what will be our trade mix.

Okay. And third is on the cement prices. What we understand from channel check that the East market cement prices in October have come up more than the GST pass-through. Any comments on that?

I've already given the comment in my opening remarks, we have passed on the entire GST benefit to that.

Right. Yes. So what we hear is that the prices have come down beyond the GST pass-through, not just the GST pass-through INR 30-odd, but even prices have corrected beyond that. And given the Tamil Nadu market, December quarter is generally weak, given it's a monsoon quarter. So would it be that Q3, we would be looking at an NSR decline Q-on-Q?

I think we cannot forecast prices. And I think, as I said earlier also, we are in the business of making long-term investments and making sure that we create structural advantages on cost and deepen our cost leadership and build a pan-India footprint and build scale in our business. I don't think we'll be able to predict prices quarter-on-quarter. And I think we are not in the business of predicting quarterly prices.

Okay. Last question on the freight expenses per ton, which has come down by around INR 80 per ton, while -- and lead distance number, which we look at has come up by 7 kilometers on a quarter-on-quarter basis. So how do we explain this reduction in per ton number while lead distance is higher?

We are on our cost reduction journey in logistics also. So that has also contributed. And of course, very small portion is also because of the railway busy season surcharge. This year, we had a 2 months relief from the busy season surcharge. Last year, it was only 1 month.

Okay. Okay. And did you share that because of this coal sales [Technical Difficulty], what will be the savings -- yes, you can answer...

Can you please repeat the question?

The savings from the recent reduction in the coal sales by INR 400, INR 500 per ton, how much that would relate into...

Yes. The coal sales benefit in the second half this year is about INR 20 crores. And next year, the full year basis will be about INR 50 crores to INR 55 crores.

We take the next question from the line of Shravan Shah from Dolat Capital.

Sir, just wanted to understand, sir, when we -- in the opening remarks, when we said that we are looking at 7% to 8% kind of a CAGR for the decade and when 2 to 3 people have asked in terms of the growth for this year for industry also, we are hesitant to even answer that. So just trying to understand why I can't -- even the 1H is already is there. So I understand we can't guide for our volume growth, but for industry, a ballpark number would also help. So just trying to understand what is stopping us to even give us some number?

I think what is stopping us from giving a number is that it is hard for us to predict quarter-on-quarter what will happen. And I think on a longer-term basis, we have seen that there is an easier -- model that is easier to predict because even though some investments may get postponed 1 year, but next year, they catch up. So quarter-on-quarter, it's very hard. But on a long-term basis, we have seen that in a cycle where the growth is, infra-led, the cement growth is typically 1.2x the GDP growth. And I think that is something that we have seen over many, many years across cycles. And year-on-year, it may sometimes be quite bumpy and unpredictable, but then it catches up. So if there is a growth which is lower some year, it catches up the next year or the year after and the reverse also happens. So overall, the thing that we have seen is 1.2x GDP growth is what the cement sector is likely to grow at.

Yes. And second, sir, just wanted to [Technical Difficulty] yes, I got it. I understand. Sir, second is on the CapEx front. So just wanted to understand, I understand we will be announcing the Jaisalmer expansion. Obviously, it depends on the JP in terms of the timing, but by March. But broadly, so currently, whatever the Belgaum, Pune, Kadapa, which is already announced and ongoing and the Assam one where trial run is there. So just wanted to understand how much is still pending to be spent on that? And broadly, even if let's say, Jaisalmer we go for a 5 million or 6-odd million ton, broad understanding would be -- will it be INR 5,000 crores, INR 6,000-odd crores. So I was just trying to understand, so roughly, it seems like INR 14,000 crores, INR 15,000 crores needs to be spent by FY '28 if you want to achieve. So I'm not even including the JP. So then the number would even go higher. So ultimately, that will impact our net debt decently. So if you can help us.

So if you see the last 2 projects that we've announced, each Belgaum and Kadapa at about INR 3,200 crores to INR 3,800 crores. For the greenfield that we'll do at Jaisalmer because it will be a pure greenfield in the newer market, it will be close to what the industry is used to achieving between $90 to $100 per ton. So that translates to about INR 5,000-odd crores for a 5 million ton plant. Ballpark, as the size of the kiln may go up and down by 1 million, the numbers could change. But I think ballpark $90 to $100 per ton is reasonably achievable even in that market where it's going to be a greenfield.

Yes, yes. So that's what I'm saying. So this Belgaum, Kadapa put together is INR 6,800 crores, Jaisalmer is INR 5,000 crores, that comes at INR 12,000-odd crores plus if you can help us in terms of what is left to be spent and then there will be RE and maintenance CapEx also will be there. So that's the way I just wanted to understand, even to reach a kind of 70 million ton also, we need to spend INR 1500 crores, INR 16,000-odd crores by FY '28. So how one can look at in terms of the net debt?

This is one of the announcements which we have made currently, you can expect the CapEx to about INR 10,000 crores to INR 10,500 and additional CapEx, which comes maybe about -- then take a ballpark of INR 3,500 crores to INR 3,800 crores also for 6 million tons capacity.

Sorry, sir, can you repeat this INR 10,000 crores to INR 10,500 crores you said for which year?

For the announcements till FY '28.

Okay. Got it.

I think this is ballpark. I think the [Technical Difficulty] CapEx plan, I think we'll give you a better sense by March of '26.

Yes. No, no, sir, that I understand. The point is that the -- even if we -- let's say, the difficulty is that given the supply which will be coming in terms of the capacity, which will -- are there for next 2 years, particularly till FY '27 and the way maybe the GST cut has happened and maybe the focus can shift to the non-trade. In terms of the price hike growth would be very, very difficult. So the only option is the cost reduction to improve the profitability that also kind of to limit it. So the net debt would be significantly rising from here on. So that's the worry.

Net debt, as we said earlier also, with all these expansions also we will be comfortably below 2:1. Net debt to EBITDA will not cross 2:1.

We take the next question from the line of Milind Raginwar from BOB Capital Markets Limited.

Just wanted to understand the management assessment on the headwinds on the cost side probably from here on to, say, the next 2 quarters or beyond that?

I think we see some rise in petcoke costs recently. But again, it is very, very driven by geopolitical factors, which is quite volatile and uncertain. Other than petcoke, I think we do not see any major cost spikes in any other area. And I think as Dharmender said, we will try to minimize this cost spike as much as possible.

Because the second half base is slightly lower, so that was the reason the question was. My next question is on the CFO earlier mentioned that the second quarter industry growth was weak. Any number that you would like to put on that?

I think we think it's likely to be low single digit.

Okay. And finally, just if you can allow me one. Any clinker sales in our volume?

No, not really. [Foreign Language]

No, no, nothing.

We take the next question from the line of Saket Kapoor from Kapoor & Company.

Sir, as you alluded to the fact that the impact of the higher petcoke prices and also the lowering of GST and the compensation also will get mitigated with the other cost rationalization. So what should be the steady-state number for EBITDA per ton that we can look forward for the second half? And so we have seen this decline of EBITDA -- quarterly EBITDA from INR 883 to INR 696. So if you could just give the factors that has led to the decline because the volume decline was only marginal.

[Technical Difficulty] the reduction of the profitability -- I'll try to cover your answer -- question. The reduction of the profitability from Q1 to Q2, this is a seasonal impact which comes in the Q2 every year because the monsoon season leads to lower volume and some of the plants go into shutdown, so those costs will come into picture. And since we have seen in the current year, the prices have held up. So ultimately, the profitability of second half will largely be dependent on how the prices behave. But we are quite confident that the profitability will be much higher. Volumes will also be much healthier in the second half. Giving exact guidance cannot be the right way.

Right, sir. Sir, can you give me the last year annual numbers? What was our volume? We have the first half right now and how was the second half numbers versus?

So our full year numbers were 28.8 million tons and minus the first half 29.4 million tons.

We are equitable in that way. The first -- the H1 and the H2 have remained almost the same for the last fiscal year. That is the fair understanding. So we are expecting on the base of what H2 was last year to, we will be growing just like the industry trend will be. That is what the base understanding should be.

Sorry, the last year numbers were 29.4 million tons. And this year, first half, we are at about 13.9 million tons, H1.

Okay. Last year, it was 29.4 million tons. And this year, we have done 13.9 million tons. Okay. That translates into 15.5 million tons for H2. So as sir was alluding to the fact that we are looking to exhibit volumes in excess of this 15.5 million tons for the H2. This is what the -- our endeavor will be depending upon how the market conditions are.

Yes, please. Yes.

Right, sir. And sir, taking into account the infrastructure part of the story and sir, we have seen that a lot of EPC players have been facing the cash crunch over the last 9 to 12 months. So how -- have you factored that also in your growth number because cement, steel and other elements goes into the infrastructure and those -- and your main buyers are these EPC players only who goes -- who are the people who are building these infrastructures. So how do those cash trends for them works out in terms of the payment, which will be made to you? I'm just talking about the ecosystem getting choked up because of this receivable mismatch.

Ladies and gentlemen, we have lost the line of the management. Please stay connected while I rejoin the management, thank you. [Technical Difficulty] Ladies and gentlemen, we have the management line reconnected. Saket, if you can please repeat your question.

Yes, I will repeat it. Sir, as we have seen that our -- we are more inclined towards the non-trade mix that is the sales of [Technical Difficulty]

Saket, are you there? Saket, we are not able to hear you. Could you please unmute from your end. Yes, we can hear you, Saket.

Yes, you can hear me? Yes, yes. Can you hear me now? Hello?

Yes, Saket.

Yes. Sir, as you were mentioning in your opening remarks that we have a higher non-trade mix. That means a majority of the sales is towards institutional that is the government. So how are the receivable days being from the government side since we are hearing a lot of payment delays from those front?

We do not see any spike in receivables. And I think the receivable days are normal as it was earlier.

Ladies and gentlemen, we take that as the last question. And I now hand the conference over to Mr. Puneet Dalmia for his closing comments.

Thank you very much for your interest in Dalmia. I once again wish all of you a very happy, prosperous and safe Diwali. And I look forward to seeing you next year in -- after the third quarter in 2026. Have a great time, bye.

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