HeidelbergCement India Limited (500292) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the HeidelbergCement India Limited Q3 FY '21 Conference Call hosted by PhillipCapital (India) Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Agarwal of PhillipCapital (India) Private Limited. Thank you, and over to you, sir.

Thank you, Aman, and good afternoon, everyone. On behalf of PhillipCapital (India) Private Limited, we welcome you to the Q3 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 the conference call may be forward-looking statements related to future developments and the current performance. These statements are subject to a number of risks, uncertainties and other important factors, which may cause the actual developments and results to defer 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 of presentation from these websites. I will now hand over the floor to the management of HeidelbergCement India Limited for the opening remarks, which will be followed by interactive Q&A. Thank you, and over to you sir.

Thank you, Vaibhav. Good afternoon to everyone for making time available for this earnings call. So you would have gone through the presentation that has been uploaded on our website. Nevertheless, I'll go through it once again before we open our session for question and answers. So the first slide was about -- Page #3, which was about the cement industry overview. You can see how the volume developments have taken place. These are figures which we have taken from the DIPP or from various government sources. So we go by these data. However, these data could vary on actual results, and that is what you'll have to take note of this. But all said and done, there is a revival on cement demand. Gradually, although it is up and down. I would say the -- at the moment, I would say, the industry or the economy is on a camel's back ride. So it is up and down. So that will continue till the COVID issue gets settled down. And as I say always, the Indian industry or Indian environment works less on figures, but works more on sentiment. So unless the sentiment gets positive, we will continue with this up and down situation. Coming to the Slide #4 of the page, where we have talked about our operational results. So you have seen that we have grown by almost 3.7% on volumes and price by 4.5%. On the gross revenue basis, it is close to 8.5% growth, which we have delivered. Volumes are recovering, especially in most micro markets, and things seem to be a little better. And as the government has announced quite a lot of measures in terms of impetus in the economy, the budget -- recent budget, looks very promising. However, it has to be seen on the ground, what is the -- at the implementation stage. How we fare on that. Our company, HeidelbergCement India is 100% blended cement. So on the sustainability part, I think we continue our trajectory and our growth which is continuing with 100% blended cement. Our dependence on grid power is about 66%. And in the future, it is likely to further reduce. As we put up our -- which the ongoing projects which come up on steam. We continue to operate on a negative working capital, which you may appreciate because there is a cost of capital for every operation we do. So this is a subtle earning what you get the benefit of an organization. That means the risk is you are totally covered against risk, and you're working with a negative working capital. So your involvement, financial involvement is virtually negligible. So this is another -- which support, which the organization gets by way of derisking itself from the market risk. You will be happy to note that as planned INR 1,250 million of our nonconvertible debentures has been paid up. And now the remaining is about INR 1,200, million which will be paid in the December of next year. Net cash balance today is INR 216 crores. We continue in our attempt to improve our carbon footprint. We have invested -- we are right now investing into AFR and solar projects. Both these projects are underway, and they should start yielding results sometimes in the second half of the next year. And this will further reduce our carbon footprint. And of course, I'm sorry to report that there was a small LTI. But for us, it is -- just only an LTI, people may take it. But for us, as an organization, which has pledged and which has committed itself to go to a 0 harm this 1 LTI also, even if it is a scratch to the person, it means a lot to us. So it is a lost time injury for us, and we are reporting here as per the part of good corporate governance. Coming to our Slide #5. If you look at our interest and financial charges, which is the highlight of this whole page is it has come down and it will come down further in the next year also. As I said, operating income, net of taxes, has already gone up by 8.5% despite the difficult market condition, which it has gone through. It is not today's times, when we talk about working capital, when I just mentioned to you, prices of liquidity crunch, okay. To achieve negative working capital is a -- I would say that kudos to the team, people at the ground level, who are on the procurement team and everybody who has managed the cash flows from the field well. There has been a marginal increase on the logistics costs, which I should explain to you. This is what you would have seen that over a quarter -- on a year-on-year basis, there has been a diesel price increase of almost close to 5%. So there is some deflection of this -- in this. And there has been some alignment what we are trying to do in terms of logistics. But considering today's logistics cost also of about INR 600 a tonne, HeidelbergCement India is, I'm sure you will find it as one of the very promising on logistics account. If we take you to the waterfall for -- on Page #6. You will observe that the price has been one of the major key functions where -- which has helped us improve our EBITDA. But unfortunately -- or I would not say, unfortunately, but there has been -- the power and fuel there has been an upside. That is -- it was expected internally by us for the simple reason that these are one of one-off costs, which has come up, there is a fuel cost marginal. Then there is -- we had a major shutdown, okay, which normally -- you know that we have a long OLBC, which is about 21 kilometer. And that belt requires replacement, once in 8 or 9 years, 7 or 8, 9 years. So that was to be put up. So we had to shut down our line 3, which is one of our major lines. And for that reason, purpose WHR does not work up. So my power cost goes up. But if I were to remove this on a basis, my -- I feel that the organization is -- has done well in terms of its EBITDA margins. So right now, the EBITDA margins you are seeing is about 20%, 20% to 20.2% or something, which is -- if I was to take it account for that, it will again bounce back to about 23% EBITDA margin. There are other costs, marginal freight cost, raw material cost has gone up because of when the shutdowns take place, these small, small things do happen. But I'm not worried about it because these are one-off expenses, which don't really bother us too much because it is a part of our business process, which we have to keep rejuvenating our plant. We cannot keep our plant operating at risk, so we had to put some investment on that or repair and maintenance. Coming to Slide #7. 45% of our volumes are roads. So there are -- you can see that there is a small change in this particular percentage because of rail freights, we adjust our movement very, very carefully, depending on the freight available. And this time, the railway peak season surcharge has not come. So we have moved a little bit towards rail. So we keep blending our movements and evacuation on that basis. Now it is unfortunate that today pet coke is costlier than coal on gigajoule basis. And this prompts us to again, redesign and change our recipe of our fuel mix. So we are planning now to go 50-50, good feature also maybe a little here and there because despite -- let me put it for the benefit of all of you, that we use coal in order to consume low grade -- for this pet coke in order to consume low-grade limestone also. If you want to consume low-grade limestone, which is otherwise going to go waste and become a burden of disposal and the mining department is not going to alarm you. At one fine morning, they will say, okay, you have to use a certain amount of lime there. So we are not doing selective mining. We are ensuring that while we are reclaiming land again, with mines closure one after the other. So we have to use this low-grade limestone also. And for that reason, we have to use pet coke here. In my earlier slides, in my earlier sessions, I would have explained to you that by using a good mix, we have been able to extend the life of our limestone quarry by almost 7 years. So this is one major chunk. So we've spent a little more here, but the long-term benefits are far more. Coming to our products of which we call it as the premium products, we launched one product which is called the -- which you see in this beige color bag. This is a new product, which we launched. And both the volumes of these combined is about 22%, which is a growth of almost 33% year-on-year. There is a marginal decline in the trade sales. Earlier -- last previous quarter, it was 85%, which has come down to 80%, but I think this is good enough at the moment when you are able to get a good price in nontrade, so we are picking up nontrade also. When we don't get a good price in nontrade, we switch to trade. So it is a blend of all the combinations which keep going on. Now coming to Slide 8. As I mentioned to you, that now only about INR 1,200 million is left, which will be paid in the next year. After that, the company is not having any interest to be paid on any of the loans it has. Just, it has got an interest free loan on which it will keep earning a small interest. Weighted average of interest has decreased to almost 3.52%. So you can see the total net balance is close to -- we have got a good net balance in our account, but close to about INR 570 crores of cash is there in the banks. To tell you further, that we are also looking at some of the CapEx is what we are going to do, maintenance CapExes and things like that, sustainable CapExes. So this will be in the coming year is going to be about INR 90 crores of CapEx, which we will do for 2021. And let me again put one more point as a cautionary here. That we have got this 21-kilometer belt. So this belt will undergo a further repair in the month of next June or second half of the second year. So we have got a time schedule to replace it. So you may see a small change. So don't get upset about it. This will come in just the similar lines. But I'm just cautioning that sometimes people think that the results are bad, but these are -- this happened once in 8, 9, 10 years and these will -- so I'm just upfront cautioning that some small amount will come here, about INR 3 crores, INR 4 crores will come and impact this. And that time also when you have to shut down the line about -- it costs us about something like -- because of this, about INR 8, INR 9 crores. So if you have to add up, today also, if you add up about INR 9 crores to our EBITDA, our gross EBITDA, then you will see that we have performed to your expectation, I suppose so. Coming to our environment and social foot ESG, we're talking about. You can see where we are, where we compare ourselves. And our target is to reach below 500 much before 2030. And we are totally committed to get our carbon footprint well within because we do not know when the government will bring a carbon cess tax, and then we will not know what to do. So we have been investing over a period of time. So you may not see those big CapExes with us, but small, small CapExes we have been doing to ensure that the sustainability of the business. Basically from the business sustainable environment sustainability, we are scoring higher. As I said, we are a 100% blended cement company. 40% of our WHRS contribute -- power is contributed by WHRS, and we are putting up a 5.5 megawatt solar power plant. Ammasandra unit is almost -- green power is 70% of the power comes from there. Water positive, we are 5.2x water positive. And we said -- as I said earlier also that we are monitoring the temperatures of our plant vis-à-vis 1 kilometer outside, and I'm very happy to say that from 2014 to now, we have been able to take a reduction of 1.2. So this is by plain -- by ensuring a good hygiene factor with the plants, good environment within the plants. We are preventing any fugitive emissions. We are ensuring that the green cover is increased. And this is being monitored on a weekly basis. So there is -- these temperatures, we are very concerned about it, and the target is to reach 2 degrees lower, which is as per the Paris protocol that you got to reduce the global climate temperature by about 2 degrees over 1990 levels. So our contribution, we can do it as best in our own area, in our mines, in our -- and the society. So to support the society, we have started this Friends of Earth where we put up now trees. These trees are geo tagged on the website and about 1,500 trees have been planted there. These are geo tagged. There are far more, we have to -- yet to tag them because the details of those geo tags are not available. So those are waiting to be uploaded. So you will be happy to know that we have Quarry Life program in which we monitor regularly the bird life okay. And the bird life is being monitored by Bombay History Society also and which is an independent agency, and the group auditors have audited it, and they have found that there are about 117 birds species which are there. Out of which there are about 7 or -- 5 or 7 of them are under the endangered species. So we are getting these birds also in our quarry life. So we are rehabilitating the quarries, whatever we are quarrying, and we are putting it back and giving it back to the nature. At our Narsingarh plant, we are putting up a AFR project, and that should be commissioned somewhere in the second half of the year. Coming to corporate social responsibility, you can see that our spends on social responsibility, the CSR budget has increased. We did this annam scheme during the COVID times giving food to the underprivileged. The National Award of Excellence we got by under CSR for education, both for rural education too. And these are some of the pictures you see that of all the CSR activities we do. Now -- right now, we are doing a still development program in both the places in Damoh and Jhansi, and it is drawing a lot of crowds from the villages, especially for computer classes, the girls, the women empowering. They are coming to learn many things, and we are very happy is that our people are volunteering for that, and we are also investing to see to it that the rural folks quality of life is uplifted in the periods to go forward. The outlook mentioned to you that COVID has been a very big teacher to us also. It gives us -- it challenged us. It brought the best out of us. So I would say COVID has been a big teacher also to us. So despite all the turbulent weathers, we have learned many, many things, and we have matured far more to take on -- if we can take on this pandemic, rest of the things we seem to be much more smaller. So we are much better prepared, much more versatile. Much more, I would say, stable now. Demand recovery in the infrastructure we will see after this new CapExes starts going in, the government outlays. We're just waiting for some trigger for the mobilization of resources to take it. Nevertheless, we have seen a strong demand all this time in the rural housing. And this rural housing has kept us up because HeidelbergCement India is more of -- or the cement seller into rural markets. So we are focused most on the below Class B Tier and there's a Tier 1 to below Tier 3, 4, 5. So that is where the strength is, where the retail is and where the people respect quality also and people pay the price also for the quality. The risk here is only of the hardening domestic fuel and the pet coke. As we speak today, also, the pet coke prices are hovering around $115 and we may see further push up on that. But I said that we have to find out ways and means to how to conserve energy and how to reduce our fuel. So we are working on that. We have taken up major measures to even -- now we will be studying our kilns and seeing that how -- which are the places where we can improve our -- I think, so this exercise will start now. Improvement in liquidity conditions is going to happen as the government starts easing its pocket and starts putting the money. But the last quarter and the quarter after the COVID period, was one with tightening of the fist at every level. And there was no money in the market, despite that we have been able to carry out our business with all the respect and giving due respect to our channel partners and our business associates. So combined, we have as an entity, taken the organization and the society together to fight this COVID period and still to keep our business on going on and keep our heads above the water. Implementation of labor codes are concerned, we are going to -- we are implementing them, and it is in a steady phase. We want to remain compliant. And last but not the least, sustainability we have been there. Sustainability will continue and sustainability, in my view, has never been an option. It is a compulsion. If we do not follow sustainability issues, measures, ESGs and SGDs, if we do not comply with it, I'm sure, we will not be into business in the long run. So with this, I end my brief to you. And would be very happy -- Anil and I, will be very happy to answer your questions. Thank you very much.

[Operator Instructions] The first question is from the line of Chintan Sheth from Sameeksha Capital.

And congrats for the decent set of numbers despite the circumstances. Sir, 2 types of questions. One is on the recent MMRDA that is mining bill, which now has allowed the mining lease transfer between the parties. Any thought process of the management for the -- taking in sister concern of Zuari Cement in our fold? That is one. And the second is on the volume front, we are already at around 80% of the utilization this quarter. However we see the medium-term growth looks a bit challenging given the capacity constraint. So any plans and thoughts there are we in terms of greenfield plans we were discussing a quarter back?

Okay. So Chintan, we are going with your first question. Yes, there is some changes in the mining laws. This sets the base for future thinking on a combine -- combining the company. But still let the document come out properly, let the details be available in full clear form, and then we will definitely, in the years to come in the coming short-term, near future, we will try to see how we do it because there is -- within Zuari also, there is another company which is listed. So there are 3 entities as of now. But we will try to see that how do we optimize and get the best value for the shareholders. So that we are waiting for it. So once we get through it and when we know in our heart that we are not going to erode any -- and we are not putting the company to risk, then only we will take this forward and take any steps on that. That is one. Number two, you said was near-term growth. Okay. So on the near-term growth, we are running at 80% capacity utilization. I agree. Today, also, if I'm saying that if I was to do any major change in the plant. Last year, we did a major change, we added 1 million tonne capacity, okay, in the month of March. Okay. Now we are -- still, we are at 80%, and about 81% is might incur capacity utilization. So if I'm looking at 80% capacity utilization, I have still much more headroom to go even if the market grows by about 9% on a yearly basis, base of 7% or 9% on a yearly basis, I still have 2 years to go. Not brought down by this particular feature that what do -- will we do. We are already in the process of -- you know that we have got a mining lease in Gujarat, which we are working on. Now we have started working on, we will go for MOEF clearances. And then we will look at this. In the meantime, if there are any opportunities which come our way of any acquisition or any mines which come up our way, which are conveniently located to us or near to our mines, we will definitely go for it. We are already doing the prospecting of the places which are adjoining to our mines. We are taking -- going to the government, seeking their permission. And if we can get some limestone around our plant, definitely, we will look at putting up a brownfield project. Since we have the cash, the necessary cash for that. So we will -- we are working on it. So this is what I can answer to you. So there's no urgency, I would say, in the medium term. Yes. After 3 years, yes, I will have a issue -- 3 years later after that, but we are working on it.

Sure. And on the trade side, you did mention that you took a quarter on the nontrade side, the rates are better. And that's the reason why our trade mix is lower. How are we seeing in terms of trade, nontrade demand in terms of -- okay, obviously, we are looking to focus more on pricing start to choose between risky markets. So if you can provide the outlook on both trade and nontrade side would be helpful.

So Chintan, it is like this, normally -- today, normally, in Central India, on the NSR front, if I say, NSR front, usually, on an average, if I look at the industry categories data, it is about INR 800 to INR 900 difference between you will get lower realization by INR 800 to INR 900 in nontrade. If we are getting a better deal. Say, suppose in some places, we do get a deal which is about INR 200, INR 300, INR 400 difference. Okay. We capture that. Okay. We are not running for them, but if we have some good ones, which come to us at a good price and a good terms because we do not sell anything on credit, okay? So every payment with us in Heidelberg is 100% advance. So any nontrade business happens in our company. First is the payment in the bank of Heidelberg and then only the material moves. So we are very pick -- choosy about our business, what we do. But still, we managed to see to it that if we get some -- just only to -- and these orders also we took just only to improve our capacity utilization, okay? Yes, you will say that even if I'm running at 80% capacity utilization, why don't I take the INR 900 even low orders also to improve the capacity utilization and improve the margin? Yes, I can do that. But I'm doing it at the cost of putting to jeopardy the brand image of the company and also erosion of the limestone scarce resources, which we will use it when the time comes. So if there is a peak period, I would like to run my plant at 100% utilization. If there is not a peak period, then I would say, okay, let us wait for 3 months -- more months and then let the -- run the kiln for that.

[Operator Instructions] The next question is from the line of Manish Saxena from Pinebridge Investments.

Okay. See, I have 3 set of questions. The first one is, you have put up a slide, a very nice slide on that ESG footprint. I just wanted to know from you, you're thinking of putting a 5.5 megawatt solar plant and an AFR project, which is upcoming. Could you tell us that how much do you think this will reduce the CO2 emission, which is currently at about 511? Do you have a target in mind? Or this is just...

Yes. No, it is a target. We have a target of coming down below 500 by 2030. This is our carbon footprint road map. So this is a 2030 target, which we -- it will move very slowly because we are already at a very low level than the standards which are there at the moment, okay? So if you look at the Indian cement industry, it is cruising around 5 -- cruising around 580. From there, we are at 511, so it is a big jump. After this particular point, it becomes -- the progress becomes much and much difficult. Unless we go for some more carbon capture technologies or things like that. So this will come down, but the target is that we have promised to the group and our commitment is there on our road map that every year, we will reduce some CO2 emissions. And this will come down significantly if there is a change in the law, which allows us to add more fly ash into PPC, making of PPC. So we are very hopeful if that comes in, then we would be touching it immediately. So this level also, I will be able to touch, if I'm allowed to add another 5% to 7% more of fly ash and a little bit of things which we do will come down to just about 500 odd.

Okay. And you were talking about a carbon tax, is that the thing that has already started in some European countries or some other parts of the world?

Absolutely right, Manish. It is almost ...

And what would be that cost?

There it is about EUR 30, EUR 30. This was the -- this EUR 30 was the cost which they had put as on September announcement in Europe. And it is subject to revision. I think they will revise it in '21. And this EUR 30 may go to EUR 35 now.

We are talking about from the euro point of view.

Euro point of view.

Okay. Okay. Okay. Understood. Understood. Second, my second question is on this repairs that you had to do on this conveyor belt that you mentioned about. Sir, if I were to understand you right from your presentation, this was about INR 9 crores to INR 10 crores of capital expenditure, which was expensed in the quarter. Is that the way we should think about it?

No, no. It is not INR 9 crores to INR 10 crores. So this is -- the CapEx for this particular thing is -- the total impact of this, like plant was shut down for almost 25 days. So I'm thinking out of cost. On the cost -- the investment on that was a part of our plan, okay? So that is not bothering me too much. Okay. It is INR 3 crores, okay, investment on the belt part. But if I put my WHR did not turn out almost 3 megawatts with almost 3 million units of power. My plant was shut down. Okay. My fuel consumption went up. During that period because I was running line 1 and 2. My line 1 is a very costly line in terms of fuel. It's a guzzler, fuel guzzler. So -- but that we keep -- we do not operate it. We only operate it maximum about 100 days in a year. This is our target to keep it only lying low. Only when there is a certain spurt in demand, we run that and make extra cement and use it. So if I add up to all these costs, it adds up to close to about INR 80 to INR 100, between INR 80 to INR 90 a tonne was my impact because of this shutdown.

Okay. Okay. Understood. Understood. And a final question is your tax rate was low, slightly lower compared to the previous quarters. How much of the MAT credit is still in line with you for you to take it in the future quarters?

Anil, it's at INR 75 crores.

Manish, at this moment, we still continue the old income tax rate of 35%. And as on December 31, we have around INR 70 crores, INR 75 crores unutilized MAT. And going forward, we will continue using the old tax regime of 35% until we utilize this MAT amount. So we are expecting that maybe next 1 or 2 years, depending upon the profitability, this will be utilized. Till the time, the tax expenditure you will see, tax the rate in the range of this 33% to 35%. And thereafter, it will significantly reduce to 25%.

Okay. Okay. But right now, the INR 75 crores is the unutilized amount?

As on 31st December, 2020.

The next question is from the line of [ Simran Bhatia ] from SMC Global Securities.

See, I have a couple of questions. First of all, I want to ask that, you've just stated that your EBITDA margin will be -- bounce back to 23%. Can you status -- means how much time it will be bounced back, whether it's in the short term or in the long term, means in the next 1 year? And yes?

[ Simran ], the thing is what I was telling you that even today, if I was to take off this one-off expenses and add up to this, then also I'm at 23% only today. So it is not that I'm going to bounce back, I'm already there, had this one-off expenses not coming.

Great. Sir, second question is, for the first 9 months, your interest costs have bring down to INR 41 crores from INR 57 crore, which is almost decline of 28% in the first 9 months when we are comparing with the YoY. I just want to ask that in the upcoming years. Can we see this run rate? Means your interest cost is going to come down very, very sharply going forward?

Yes, it should. Because as I said, now only interest-bearing loan because of the nonconvertible NC is only INR 1,200 million. So that is the only one on which it will be interest is. The rest is all -- there is no interest-bearing any amount with us.

Okay. Great, sir. And sir, my last question is, what is the percentage from your premium segment contribution in the revenues? Because last time, you have stated that you were targeting for 25% in the premium segment. So are you -- means in that target, you are going to have? If you can.

So [ Simran ], you have seen in our Slide 7, we are close to 22% of our trade volume.

Okay. Okay. That's great.

So we are -- our trajectory is okay, I would say.

Great, sir. Great, sir. And sir, any expansion plan further? Means in the new geographies or means existing will go on?

1 As I said in the beginning that we are looking at our now Gujarat project. Going forward, we will look at possibility of -- if there is some limestone additional available in a year or so after this whole prospecting of this place takes place and if we can acquire that mine, then we will put up something here only, and either try to improve these kilns or something like that and try to add about 1 million tonne more around this place. And if it is to be going, then it will go in a multiple of 3 million only.

The next question is from the line of Raghav Maheshwari from Asian Market.

Sir, my question is our number for the 9-month EBITDA per tonne and the EBITDA in millions, absolute number is very much lower as compared to our peers even compared to 9 months on FY '20 basis, what is the reason behind it? This is any geographical barrier to us or otherwise, the realization of our peer is less, you have shifted the volume into the nontrade?

No, no, this is -- you have to -- we are operating predominantly a central India player. So if you are comparing our EBITDA with all India players, then it is not a fair comparison.

Sir, companies like Prism and Vikas which are the operating data, their per tonne is better from us. So that's why..

So you take the last 5 years average and then you compare it and then you see, then you tell me that if we are lower risk. My total EBITDA earnings during the last 5 years, my revenue compared to any other company in this region, you will find the difference straight away.

And sir, my question is -- but my question is because the Central and Eastern UP is basically the market where your company is generating good realization as compared to other like North India. This is my -- so that's why my question, why our realization year-on-year basis drop because of the volume or something which we are shifted to nontrade much from trade?

No. No, we are not shifted at all from trade to nontrade. It is just only this one. Otherwise, we have been -- if you look at my gross realization, it has grown by 2.5% over previous -- on a 9 months basis.

Raghav, you will appreciate that there is increase in the realization during the quarter by 5%. And even if you compare the full 9 months, then also, you'll see the increase in the realization by 2.5%.

Yes, sir. That's definitely increased in the realization. But for EBITDA is like not increased year-on-year and quarter-on-quarter, both basis.

So exactly. When we are operating at a very high level, we have been at INR 1,100 for the last so many quarters, okay? Whereas our peers were operating at somewhere around INR 800. So that is also to be seen.

Raghav, in our presentation, in Slide #6, we have shown this waterfall. And this waterfall, you will see that there is 2 areas where the negative variance is there. One is the power and fuel and another is the others. And what Mr. Cooper also explained in the opening remarks that there is one-off item, which happens only 8 to 10 years in the life of the company where we replaced this overland belt conveyor. It is -- the overland belt conveyor is the longest one, 21-kilometer. And the both the site put together, total size of the belt is 42. Out of 42, we have replaced 20 kilometers this year in this quarter, and the remaining 22-kilometer will be replaced in the second or third quarter of the calendar year 2021. And during this 8 to 10 years' time when the replacement happens, we have to take the longer shutdown of the -- our largest kiln, which is the from fuel and the power point is the efficient kiln. And that impact put together of the power and fuel and the request maintenance is coming, 80 to 100 basis points, basically only INR 80 to INR 100 per tonne on the total operation of the company this quarter. If I eliminate this one-off item, then our EBITDA per tonne, which is at this moment in the waterfall shows around INR 950, that will be INR 1,050. Then is very comparable after eliminating the one-off item. And that, we actually try to explain this, this is the things which happened this quarter and after 10 years, and again, it will come. And the remaining part of the belt when we replace, that time also a little bit adjust will come with respect to EBITDA pattern. Overall, if you see volume growth is there, price growth is there, and we try to optimize the cost wherever possible.

[Operator Instructions] The next question is from the line of Sumedha Srinivasan from ICICI Prudential AMC.

So my question was, right now, I understand that the debt is roughly around INR 3,550 million as of December end. Can you help us with what the similar number was as of September end?

September end? September was ...

Just to see the quarterly moment.

INR 1.25 million.

Yes, you had INR 1.25 million. We had turned INR 1.25 million on 16 December, 2020. That amount we have paid. So our debt -- gross debt reduced by INR 1.25 million as on 31st December. So INR 4.8 billion, correct.

Okay. Okay. And my second question, so I think in the media release, in the results, it's mentioned around $5,700 million of cash as of December end. As of September end, it was around -- it was little higher, is it? Because I think the media release mentions cash balance increased to INR 5,700 million. So I just wanted to check what of the cash balance in the previous quarter to see the moment.

You want to know the -- as on September 30, what was our cash balance?

Yes. If I'm not wrong, I think, it was around INR 5,720 million.

INR 5,720 million.

That was only similar line for the September 30. And during the quarter, whatever we have optimized on account of profitability. That amount has been used for the repayment of the loan.

Okay. So just one last question from my end. The AFR as well as solar projects that are coming up, what is the capital outlay plan for these 2?

Sumedha, see, that this is one -- this is on purchase power is on CapEx, there is no CapEx on this one, but there is a CapEx of about something like INR 20 crores on our AFR. On the solar power, it is on a BOT basis.

On a growth CapEx kind of basis, right?

No CapEx.

Okay. And this INR 20 crores in AFR, has some already been spent in this year? Or will most of it come up only in FY '22?

Most of it is, it is gradually -- on the spending somewhat will be spent over a period of another coming 6 months. So about INR 7 crores, INR 8 crores has been spent. Already INR 7 crores, INR 8 crores has been done and about another INR 12 crores, INR 13 crores will go out in the coming 7, 8 months.

Next question is from the line of Amit Srivastava from B&K Securities.

Sir, just trying to understand about the line 1, which you've discussed. So what is the capacity of that line 1? Second thing is that how inefficient versus line 3 of cost difference, if you can give us idea on a per tonne basis.

Line 1 is just only 1,600 to 1,700 TPD. It's a very old plant. It is the first line of the company. So it is there. Inefficiency wise, if you look at -- in terms of heat consumption, it will absorb about 3.4 gigajoule, whereas this will be 3.1 gigajoule on a line 1, line 3 basis. So this is the inefficiency on the thermal power plant, thermal also.

And power wise also.

And power wise also, it will consume far more energy than line 3. So if line 3, if I can may incur at something like around 65 units, this will take to around something like 80 units.