HeidelbergCement India Limited (500292) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the HeidelbergCement India Limited Q1 FY '21 Conference Call hosted by PhillipCapital (India) Pvt. Ltd. [Operator Instructions] I now hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital (India) Pvt. Ltd. Thank you, and over to you, sir.

Thank you, Stanford. Good afternoon, everyone. On behalf of PhillipCapital (India) Pvt. Ltd., we welcome you to the Q1 FY '21 conference call for HeidelbergCement India Limited. On the call, we have with us Mr. Jamshed Naval Cooper, Managing Director; and Mr. Anil Sharma, Chief Financial Officer. I would like to mention on behalf of HeidelbergCement India Limited and its management that certain statements that may be made or discussed on this conference call may be forward-looking statements related to future developments and current performance. These statements may be subject to a number of risks, uncertainties and other important factors, which may cause the actual development and results to differ materially from the statements made. HeidelbergCement India Limited and the management of the company assumes no obligation to update or alter these forward-looking statements, whether as a result of new information or future events or otherwise. Also HeidelbergCement India Limited has uploaded a copy of the presentation on the exchange and its website. Participants may download a copy from these websites. I will now hand over the floor to the management of HeidelbergCement for the opening remarks, which will be followed by the Q&A. Thank you, and over to you, sir.

Thank you, Vaibhav, and thank you, everybody, for joining this earnings call. Wishing everybody a healthy and a safe time. Times are a little difficult as the environment suggests. Most of the time, we hear every day something or the other from different parts of the country. We pray -- we say that God -- with God's grace, we sail through all this difficult times, and we are back to normal in the years to come. You have received our presentation. I'm just running you through this basic first slide, which is on Slide #3. You have seen the industry development. It's no -- nothing big which has happened in the month of April. It was a total lockdown, and it was but natural that you would have such type of volume degrowth, 85% degrowth. It is nothing big. Coming to May, the things started improving. And in the month of June, things further improved. In terms of capacity utilizations, you will find across the industry that things are ramping up gradually. It will not happen instantly. But yes, the trajectory which it is showing seems to be encouraging. That I can say for the trend. In terms of drawing your attention to the next slide, what is -- what did we do for our business continuity. So we are first more concerned about our employees and the people, including our channel partners. So we are ensuring that these people do our business safely. Our people are safe. The families are safe because going forward, if there is a harm to the human life, then we are not doing justice to our business. So that is our first priority. Safety -- health and safety always remains our topmost priority. And we continuously are communicating with our employees, whether it is at any point of -- where we're located, they are located and including our channel partners, we are in constant touch. Our teams are in constant touch with our business associates, including our transporters and vendors as such. So we are ensuring that, that constant touch is maintained. Work-from-home is a new normal. We started in our head office, and now it is becoming much more of a prevalent practice across. I think the efficiencies have not come down. There is no evidence that we have lost out on any efficiency parameter. So things will become the way it is in the near future. It will -- I think, work-from-home will become a new normal. Safety of our assets, that is the second foremost priority. So when we were asked to lock down, we took a little more time, 3, 4 days to shut down the plant, mothball the plant properly, so that at any point of time we can jump-start our assets and that our team did a very wonderful job. And when we wanted to start the plants at one click of a button and the machines are on and it were rolling. Optimization measures. On cost, we have negotiated many of our contracts with our vendors. We have negotiated many of the terms, including the period of the contracts, whether it was a reduction and those efficiency parameters, whatever -- because everybody understands today's times. And because of our excellent relationships with all the channel partners and vendors, they have been very understanding and forthcoming to support us, and we -- the way we have supported them in the past and we continue to support them now also. On the special focus on working capital management. Cash is king. We worked significantly on this particular parameter. Collections from the market were done at rock -- at rocket speed. And with the -- there were some small minor delays. Our vendors also accepted it. So the cash flow, we have ensured that it was remaining in top-class condition. On -- coming to the remaining as focus into the market and remaining top of mind recall, so we did a digital campaign every day of the lockdown period. The first lockdown period, we were giving out digital snippets on social media or on WhatsApp, and they reached out to our dealers, retailers and everyone, so that we are remaining in constant touch with them. Very relevant topics were covered, which were the need of the hour at that time. On CSR initiatives, we have worked most of the time because the communities around the plant needed support. The people around the markets also needed support. There was a lot of emotional support which was supposed to be given at that point of time. And I'm happy to say that our teams here have risen to that occasion, and they have done a fantastic job of keeping in touch with the people, communicating with them and helping them to be emotionally strong. Coming to the financial and operational highlights. We have a zero lost time injury. So this is our target to have a zero harm -- deliver a company that is zero harm. On the volumes decreased, which was because of the lockdown, we are 100% blended cement company that you are aware of it. On fixed costs, we have focused more and more, and we'll continue to focus as part of our improvement plans. Grid power, which has come down -- dependence has come down to just now 59% to 60%. And this, we will continue to work on in the near future also. So that will be our focus area in future, too. EBITDA. There is an improvement of 1% on the EBITDA, and this is supported more because of the prices. We work on -- now continue to work on a negative working capital. So this is one more feather in the cap of HeidelbergCement India that it achieves this sort of an efficiency despite the most difficult times also. Net cash, we are at INR 1.6 billion. As of 30 June, we are net cash positive. In the -- coming to Page 6 of the presentation, you have seen that there is a 31% drop in volume, almost 32%, and the similar thing is reflected in the EBITDA also. So nothing big because I would say that we should start thinking -- the economic clock, I would say, should be reset. The world economic clock needs to be reset. Rather than talking about what is the loss we will make during the financial year 2021, we should say that this financial year is not of 12 months but it is of 10 months. Probably that will pep up the sentiments also, and we will get a realistic view about things. What is lost for a month, need not crib about it. That is lost forever. We've got to look for a better future and focus more on that. On our Page 7, EBITDA per tonne bridge, which we talk about. So you can see it, how the waterfall has been. GSR has improved, raw material improved, power fuel improved. Little bit negative on the freight, but was but natural because of the rail movement was lower. To a certain extent, rakes were not available by the railways. The road movement had to take place. The market, the prices were going up consistently. So that was the -- that you had to encash that with whatever availability was there. And there were some other costs which took away -- certain costs, which took away the benefit, the gain we had. So anyway -- but then this happens -- but all said and done, that there was always a counterbalance to it. Price was good. Otherwise, we would have had to suffer. So that has not happened, and that will not happen, I suppose, with the industry as such. Coming to the volume share, 52% of our road volume is -- we are catering to our customers through 52% by road and about 14% of our volumes are in this -- our premium bag, quality bag. And mini -- a very small quantity we sell under nontrade. So that we continue to pursue that same strategy because in the COVID times, the one which will get most hit is the nontrade, and it can hit -- it leads to a danger that if you do not come out of this nontrade, only you will bring in bad practices in the business. So we have told our team to be away from these type of things and let us work on a clean system. So on compliances, we are very strong. On the coal, there was a 38% basis -- lower than that. So that has benefited us. On the -- one of the biggest initiatives from a social responsibility point, HeidelbergCement has launched what was the annam scheme. We -- what we have done is for the group -- as a India operations, we decided that for every bag we sell, we will donate INR 1, keep aside, and that will be used to feed the underprivileged by giving them food grains and things like that. So this is one area that -- which we have worked on very seriously. And we hope that -- the biggest risk the country runs today is unemployment, and people -- some people sliding down below the poverty line. And if that happens, that's a very big issue with the -- government will not be able to support all these initiatives. The corporate world has to come forward to support this in some way or the other. Otherwise, we fear that there could be social unrest also. So let us start doing our own bit. And under that scheme, we tried to do this. Coming to our digital media campaign, we have become a little more digital in this last 3, 4 months, and this is one of the document what you are seeing on Page 10. These are some of the initiatives, trying to involve our channel partners, trying to involve our teams, internal teams also, internally also trying to pep up the morale of the people so that this COVID thing -- the clouds of COVID really do not drench us and keep -- lower our morale. Because if the morale is high, then I think everything is good, then everything looks rosy. Coming to outlook. As the outlook is there, demand reduction in urban areas is visible, and we are seeing a good push from the rural markets because Central India, the labor market is little positive. Working capital, on the liquidity side, we, as I mentioned, that it is -- we are good, and we are ensuring that our channel partners are also advised to keep a tap -- track, the way we are looking at the market and we are trying to teach them that how to -- they should also conduct their business in today's times. Reduced availability of trucks and drivers was one of the big challenge, and we are meeting it. We have been able to mitigate. The team has been very, very agile to this, and they have really worked to see that the materials are dispatched on time. Energy prices will remain stable. I don't think there is too much worry on that count. But again, it will depend how things pan out. But because of energy, there was impact on the power plants shutting down at many places and the fly ash was not available. So the fly ash prices went up little bit. Input and raw materials may have to be sourced from longer leads. So that has resulted into those other costs what you are seeing those costs which are up. Manpower availability at railway yards did not allow us to push out rakes many of the times, and whatever rakes went there, they were stuck up. So -- but anyway, the railway was not enforcing or levying demurrages and wharfages so much in the initial stages. So it was a tolerable you can -- system. Optimization on -- all CapEx items, we have optimized it, and we are very tight fisted right now on CapExs. We are just kept on hold every, whether it is a recruitment or a CapEx, it is always -- everything is on hold. The bare minimum essentials we are trying to do. Let me tell you, before I end this, that while you are looking at our results, you will find that we have remained fully compliant. We have not made any provisions which are not required. Neither -- we have kept our systems so updated that whatever is for month-to-month settlements which we are doing, it's an absolutely compliant way of producing the results. That's why you may see -- find that our growths may not be reflected so sharp or something like that. But yes, whatever is, it is there in front of us, and we continue to deliver in the year, months to come also, in the next quarters also. And we are gearing up ourselves in all possible ways because times will remain uncertain and this uncertainty is not going to go out of business. The game today is not the size that matters today. It's the agility, speed and adaptability. That is the critical parameters of our business if we are -- and this is what we are trying to build it in our company that we got to resonate with the times, and we got to -- then only we will be able to tide this storm, which is in front of us. So -- and thank you once again for being with us. And I can answer your questions thereafter. Thank you very much.

[Operator Instructions] The first question is from the line of Dhaval Joshi from Sundaram Mutual Fund.

Just one question, sir. Quarter-on-quarter, prices have been grown pretty good, I mean, 4% to 5%, if I'm not mistaken in central region per se. Why there has been a bit disappointment in pricing real estate for the quarter?

The prices have improved by 2.5%.

[Foreign Language] That is a year-on-year. Sir, I'm asking, I mean, in -- even in quarter-on-quarter, prices have been grown pretty well. So is there any more discounts or anything which we are offering to the dealers or something like that? Or in general...

No, no. Our prices in the quarter have been very high earlier also. So we have not really tinkered too much with the prices. Whatever we -- our price lines were in the March also, quarter ended was very high.

Yes. Okay. Okay. So -- okay, fine. So you have not taken the price increase the way you actually...

[Foreign Language] See, there is a limit to everything. In the market, it can take beyond. There is a -- in the previous quarter, we were already at a high level. There is a material availability in the market also. It is the -- by increasing the prices further, you are just only inviting competition from neighboring states to come in more and more.

Got it, got it. Yes. And sir, just one more. What is the current -- I mean, it's too early, but how is the trend now in July, I mean, especially after starting of monsoon in terms of demand only?

Demand has been okay. I would say, not bad. I would say, the prices are also very stable, not too much of a problem on this account. And I mean right now very recently that we have seen some monsoons entering some places. But the first shower also did not impact the prices. I think the people are wanting cement there. So the demand is there and it's moving, I think. Right now, there is no question of worry. We may see some things happening once the showers are very heavy or something, either/or.

So no major drop from June to July, so you're saying?

Not really.

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

Congrats to the team on a good set of numbers. Sir, you explained on the pricing part. Also, if you could explain on the other expenses. What all went into achieving that around 30% reduction on absolute basis Y-o-Y? That would be helpful. And second question would be on -- in terms of though you have put on hold CapEx plans and all. But if at all -- recently, you mentioned that you are exploring some greenfield opportunities. So what would that be?

So answering your last question first, in terms of our greenfield, we are -- as you said that we are looking at other things which are there available with us in the pipeline. Because of this all lockdown thing, okay, everything has been put to a standstill. The governments are not talking at the moment. There is nobody in the government offices to really talk about these things. So we are just keeping it on hold till such time -- we cannot even travel now, okay? There is a big issue. So when -- even if you have to meet somebody, okay, the other fellow is not available to meet. He's not willing to meet on the other side. So I think we will -- it is little premature. But I think by -- in the next quarter or so, things should be clear, more clearer. So we can -- we will inform you as and when it happens.

Yes. No. From a market perspective, which market you are exploring to expand because you have...

It is everywhere. Right now -- see the greenfield could happen in the West also one side. If it could happen, it will happen in the West side. But the expansion plans are there. If anything comes in Central, East, wherever it is, we are open to it. On the cost of the -- cost structure, you can explain to...

If we understand correctly, your question is with respect to reduction in cost during this quarter?

30% reduction which we have received in other expenses on absolute basis INR 86 crore going down to INR 61 crore. We understand there is a volume impact.

Okay, this I can tell you.

Yes. But what else, which you could control, which led to -- which cushioned the impact -- volume loss impact?

So basically, Mr. Ravi, this other expenditure comprises of the both parts. Some part is linked to variables, some will be fixed. At the variable cost, that is the prorated based on the volume reduction that cost reduced during this quarter. And in the future, whenever the volume increase, that cost will show direct to the year volume. But some of the expenditures are very fixed in nature. And we have taken various measures to optimize during the lockdown. Those expenditures will always be on the radar of the management to optimize and that will continue in future. But now your question is whether this reduction of 30% will be sustainable? The answer is basically, it depends upon the volume development and the situation in the quarter to come, and accordingly, then we can optimize the cost. Yes.

See, there are -- Ravi, there are certain costs which like in running auxiliaries, essential services, okay? Those things will continue to incur. Only thing that can get diluted when the volumes go up. So they become smaller, look smaller. Otherwise, they will continue to exist with us.

Okay. So on this line only, if I see your FY '19 annual report breakup, so it is like just -- I just want to understand the INR 70 crore, it was commercial stores and spare. So would that be largely a variable cost because your volumes are down? This -- it will fall down largely in a same proportion?

It depends because these stores and spares also, again, comprises of some of expenditure which are fall under the consumables. Those are largely related to volume. But some of the expenditure related to maintenance and those maintenance depend upon the when you took the -- when you take the plant shutdown. And during plant shutdown, then those expenditure you need to incur. These are the, you can say, semi-fixed kind of nature and a little bit changed with the volume, but not prorated based on the volume, this cost can't move either downward or upward.

The next question is from the line of Bhavin Chheda from Enam Holdings.

Sir, in the slide, you have given the industry numbers till May. Any idea on the June numbers? Were they almost flattish Y-o-Y?

I think should be better.

June should have been better than last year's 28 million tonne number?

Year-on-year, yes, yes, I think -- yes, yes, flattish. In Central, it should be a little better.

Okay. Central, it should be a little better. And you mentioned that July, too, also looks to be better purely on a Y-o-Y basis?

Maybe -- July may be flattish also.

July may be flattish. Okay. So...

Because monsoons have started now. Now you're getting back to normal.

Right. You're getting back to normal. Okay. So I was just trying to see that industry slide only which you have shared a very interesting slide on a monthly number. So last year, August to October had a big fall. Obviously, one of the reason was the late monsoons and that's the reason that dispatches overall on an India basis were down. But this time, monsoon has been on time and front-ended, so are we also expecting a very big growth number in August, September, October, because obviously some lag impact of shutdown would also be felt as construction activities and all those start picking up in August, September since almost everything also opening up? So could we headed for a stronger type of an environment in August, September, October? How is your feeling like?

A little mixed feelings here because there are markets which are being sometimes on and off shutdown. Various states and every districts, every -- little bit of uncertainties prevail. But the other good part of the whole thing is that the government is clear about it that the building industry should continue to operate. So this is one good feature which we must always capitalize on this that the government -- earlier when the lockdown happened, they said, everything shut down, okay? Thereafter, they realized that the building industry is a employment generator. So they should not stop it, and they allowed it. And this time also, in many places where the shutdowns are taking place, which we keep hearing from in mark -- where our -- not our plants but in some other places where it has been a shutdown, they have allowed to operate the cement plants and the construction business. So even if you look at in a lockdown situation, during the morning, the cement shops and building materials are opening, okay? They open up in the morning and close down by 11:00 or 12:00. So this is happening. So -- and of course, you must -- we must all appreciate one thing that this construction labor can be deployed at a farm for a certain period. Beyond that, that sustenance cannot happen. So these poor people have to come back for work. They are into a position where they will come back to the construction sites and the construction will continue.

Sure. Sure. And is the raw material cost for you, the benefits of the lower coal prices largely captured? Or we would see some more benefit flowing into quarter 2 also?

So the -- we are going by spot purchases. So right now, whenever the prices are there, we have got a certain stock of about 20, 30 days of stock. So that is not too big a thing to really worry about or make -- we will make a statement...

No, I'm saying you will see further savings...

Maybe you can say about INR 10, INR 15 a tonne at best.

Okay. And my last...

As expected, the petcoke price also has started inching up in here.

And my last question, what is your -- yes, what was your region-wise sales mix in the quarter, in the -- if you can share the state-wise or still...

Sales mix is virtually 85%, we are under trade.

No, I mean region-wise.

Region-wise, I would prefer not to give because of certain competitive issues.

[Operator Instructions] The next question is from the line of Kamlesh Jain from Prabhudas Lilladher.

Sir, if I see your volumes, it has fallen by roughly around 32%. Even if we see pan-India presence companies, their volumes have fallen 33%, 34%. And your market, like the central region, has the least impacted because of the COVID. So despite that, we have a fall of 32%. So I know that April was entirely lockdown. But even in May and June, like, say, your regional peers have done far better as compared to us. So what had been the case? Like they have been -- have we been little bit late in terms of like restarting the plants or restarting the dispatches?

See, Kamlesh, it was not the plants which had a limitation, it was the logistics which had a limitation, okay? So it was the market reach. If your trucks are going to get held up on the roads and police is not going to allow them and there was a lot of restrictions which were happening. So we sell into certain markets -- maybe our -- we did not -- we were not able to load many rakes also, okay? So that is also one of the reasons our dispatches could come -- came down. Because loading rakes was also not becoming a viable solution for us because the material was not getting sold after reaching. So we said wherever the material we are getting advanced payments in cash down, let us sell in those markets. But I don't think we did badly on this. Let more numbers come in and you will see that how others have also panned out. I'm very clear about it that Heidelberg has done relatively -- or should have done relatively better. And I don't know, I can't comment on others, but yes, we'll see, let the results come in more and more.

But one thing is that, Kamlesh, we can add here that when we are comparing the volume development on year-on-year basis, we are comparing with the June 2019, and luckily, June 2019 was the highest sale in that quarter by this company. So maybe -- it may be a little bit misleading if we compare the volume in percentage, in a few tonnes if you see, I think it will be comparable. But like MD sir said that let us wait for the more result of the cement companies, and then we will understand how fairly this company has done during COVID-19 and difficult situation.

And sir, secondly, we have increased our volumes by -- our capacity by 20-odd percent through debottlenecking. So as the market expands, so would we be focused to expand the volumes at the cost of lower realization? Because over the last 3, 4 years, our volumes have grown by hardly 1-odd percent. I know that there were capacity constraints, but even now with -- like the now we have 20% additional capacity available, around 1 million tonne. So would we be like, say, pushing the volumes at lower realizations? Or we would be like, say, happy with having higher prices and higher mix in margins?

If you want to gain 10% volume -- additional volume, and if you have to cut down the prices by 7%, it is not going to work. So I can do a battle and I will lose on 90% also. So I think getting market share at a -- is -- for us, the target is very simple that to get market share. If we are getting a premium brand, premium positioning and a premium pricing, only then we are going to go increase it because this is a gradual slow story, but it is a permanent change.

The next question is from the line of Sumedha Srinivasan from ICICI Prudential Asset Management.

Sir, you had mentioned that grid usage is about 59%, 60%, which would gradually go down in the future. So is there any plans of any wastage recovery plant set up or any renewable sources, solar or wind or anything?

So we are looking at solar, and we are looking at also third-party outsourcing. We will keep increasing our share of outsourced power.

But at the same time, on your question with respect to wastage recovery, just to inform you that we have already installed wastage recovery power plant in the year 2016. So that is already there. And now we are working on the renewal energy.

Any increase in capacity in wastage recoveries plant?

No. At the moment, we are not adding any kiln. So it is right now the optimum what we can utilize. On 3 kiln basis, it is right now optimum.

Okay. And solar, is there any -- I mean, by when would it be coming up, the solar plant?

It is under -- it is in progress. It is -- the work has held up because of this COVID situation. The contractors are not able to complete the job.

The next question is from the line of Navin Sahadeo from Edelweiss Securities.

Congratulations on maintaining the high EBITDA per tonne despite the challenging environment. Sir, I had questions. One is on the current run rate. So given that Bihar is a sizable sales exposure that the company has and also the COVID situation as well as floods that we keep seeing in the media, so are we seeing any major drop in volumes from that particular state? Because I could -- as you said, Central could be possibly, by and large, steady, as you said, I think in the previous question. But in one of the states where we supply, Bihar seeing a major impact?

Navin, for us, Bihar is hardly anything. We hardly sell any material there. Not for us.

Okay. Okay. Okay. No, I thought maybe that could be a potential player.

Navin, for us, it is a very, very -- virtually negligible, I would say.

Okay. And sir, my second question then was on prices. If I compare with, let's say, the March quarter, our trade sales have gone up from 85% to 89%. Also, there is some increase in the share of premium cement. So given that the sequential increase in realizations, which is a little under 2%, and the kind of hikes that we were at least hearing from the market, it seems a little on the lower side. I know one of the participants did ask that. But I just wanted to -- I understand this because there is an improvement on the trade side also, also in the premium side. So are we missing anything? Is there more discounts? Or what could be the challenge, sir?

No, I don't think we are missing out anything. We are -- as far as our provisions and discounts are concerned, I can assure you one thing that we will never keep a provision or we will not delay a provision ever, okay? Whatever is there, it is upfront. It is given in the month, and it is distributed and put into the ledgers every month. So there will be no surprises in the future. I can only say that much. As far as our prices are concerned, you can check out from the market at the retail counter level, okay? They are on the upper side. Maybe there is -- sometimes, it happens that certain costs go up, but the discounts, no way they are gone up. There is some catching up, some other brands would have done some catching up on aligning their discount structure, that's why you might be finding some changes in that.

Okay. And sir, just one more question, if I may, please. Is solar power now the next development you're looking at from a cost efficiency perspective? And if yes, then how much is -- it is like the difference between, let's say, the costs from solar visualized versus the grid power?

So Navin, right now, we are looking at a 5-megawatt sort of a thing putting up in the Central India plant. And we are exploring other possibilities to put up something more here and there, also basically on 2 counts. One is also the futuristic view on compliance, number one, futuristic view on CO2 footprint, which we are working on. So we have that -- what will be our -- we have made our road map for 2030, and we are pursuing that with the angle view of that we have to come down our CO2 content per kg of cement as to per tonne of cement has to come down significantly lower than what it -- although we are today 100% blended cement company and our CO2 content is quite low, I would say, compared to many of -- on Indian standard basis. But yes, there is a -- we are still saying that, okay, we can do still better, and we will achieve that.

[Operator Instructions] The next question is from the line of Gaurav Rateria from Morgan Stanley.

Sir, 2 questions. Firstly, any color on what the demand drivers are right now? Do you break your entire region into like top 10, top 15 cities and the rest of the other regions? And is there any divergence in the demand pattern you are seeing across that?

Yes. So Gaurav, we follow this very closely, and we follow the tier system of where we sell, where we don't sell. And there is clear-cut indication that what we sold in Q4, what we sold in Tier -- not -- since Central India don't have metros, but in Tier 1, 2 and 3-tier cities, the sales has come down, and it has moved to Tier 5, 6 and villages. It -- there has been a step-up in those areas. So I won't be able to give you the right numbers right now. But yes, we are monitoring it month after month and how this planning is taking place and what are the resources that will be required to cater to such type of demands which are there. So the team is constantly on top of it.

Okay. Sir, just a data -- bookkeeping question. The increase in diesel prices, is that currently already in your cost structure or it's likely to reflect in the coming quarter? And secondly, on the power cost side, what is the differential between grid power cost, let's say, versus the third-party sourcing and WHR of INR 0.52?

On the side of -- you asked one question was...

Diesel price.

Diesel price. See, diesel price is already passed on into the system, and it is already part of the freight structure, already there. We have a system that the moment the freight changes beyond a certain percentage, we have a understanding with our transporters that, that factor is immediately calculated and given to them automatic. So if it reduces, it is automatic. And if it increases, also it is automatic. So it takes place within 3 days of the change. So that has happened already. The other question you asked was...

Basically W -- price difference between WHR almost, you can say.

Will be this third-party source. Third-party source at least to INR 1.50.

Yes.

INR 1.50 would be the difference.