J.K. Cement Limited (532644) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to J.K. Cement's Earnings Call for Quarter and Year Ended 31st March 2025, 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 from PhillipCapital India Private Limited, thank you. And over to you, Mr. Agarwal.

Yes. Thank you, Michel. Good morning, everyone. On behalf of PhillipCapital India Private Limited, we welcome you to the Q4 and FY '25 call of J.K. Cement Limited. On the call, we have with us Mr. Ajay Kumar Saraogi, Deputy Managing Director and CFO; and Mr. Prashant Seth, President, Business Information and Investor Relations. I would like to mention on behalf of J.K. Cement Limited and its management that certain statements that may be made or discussed on today's conference call may be forward-looking statements related to future developments and statements which are based on current management expectations. These statements are subject to a number of risks, uncertainties and other important factors, which may cause actual developments and results to differ materially from the statements made. J.K. Cement Limited and the management of the company assumes no obligation to publicly alter or update these forward looking whether as a result of new information or future events or otherwise. I will now hand over the floor to the manager of J.K. Cement for the opening remarks which will for be followed by interactive Q&A. Thank you, and over to, Saraogi sir.

Yes. Thank you, Vaibhav. Good morning, everyone, and welcome to this Q4 call. The Board of Directors met on 24th of May to review the working of the company for the quarter ended 31st March '25 as well as for the whole year. I will be presenting you a brief synopsis, and then we'll take up the questions. So for the quarter, the net sales was INR 3,225 crores as against INR 2,606 crores in the previous quarter, an increase of 24% and 13% increase year-on-year at -- which was INR 2,856 crores. The EBITDA for this quarter was INR 736 crores as against INR 490 crores in the previous quarter, an increase of 50% and INR 548 crores, the previous year, an increase of 34%. EBITDA margins comparative was 22.8% in this quarter, 18.7% in the previous quarter and year-on-year 19.2%. If you look at the profit before tax was INR 593 crores as against INR 295 crores in the previous quarter and INR 358 crores previous year. The per tonne EBITDA was INR 1,265 a tonne as compared to INR 1,040 in previous quarters and INR 1,078 previous years. These are the stand-alone results, and for the year, the net sales have increased only marginally by 1% as INR 10,708 crores as against INR 10,563 crores. The EBITDA was down by 1% at INR 1,978 crores as against INR 2,005 crores. EBITDA margins for the year was 18.5% as against 18.9%, profit before tax was higher at INR 1,243 crores as against INR 1,212 crores, an increase of 3%. And the profit after tax was higher at INR 870 crores as compared to INR 831 crores year-on-year. The EPS was INR 112.59 as compared to INR 107.50, an increase of 5%. For the year, the EBITDA per tonne was INR 1,017 crores as compared to INR 1,087 in the previous year. As far as the consolidated position, the net sales was, again, consolidated for the company was higher by 23% at INR 3,466 crores as against INR 2,819 crores in the previous quarter and 15% up year-on-year at -- which was INR 3,016 crores. The EBITDA for the quarter consolidated was INR 765 crores as against INR 492 crores and INR 560 in the previous quarter. EBITDA margins comparative was 22.1%, 17.4% and 18.5%. The earnings per share consolidated was INR 46.60 as compared to INR 24.50 and INR 28.30. Consolidated position for the year as compared to previous year, the net sales were higher by 3% at INR 11,493 crores as compared to INR 11,203 crores. The EBITDA was marginally lower at INR 2,027 crores as compared to INR 2,060 crores. And the profit before tax was higher by 6% at INR 1,242 crores as compared to INR 1,174 crores and profit after tax was higher by 10% at INR 872 crores as compared to INR 790 crores. The earnings per share was INR 111 as compared to INR 102. These are the major highlights on the performance of the company. After reviewing the performance, the Board also declared a dividend to the shareholders. The proposed dividend for consideration of the shareholders at INR 15 per share. I would also like to inform you about the debt profile of the company. So the gross debt as of 31st March stood at -- for the stand-alone position at INR 5,101 crores as compared to INR 4,593 crores. The cash balance was higher at INR 2,536 crores as compared to INR 2,006 crores and the net debt as of 31st March were INR 2,565 crores as compared to INR 2,587 crores. The net debt to EBITDA for the year was 1.3 as compared to 1.29. And net debt to equity was 0.48 -- over 0.42 as compared to 0.48. The expansion project. We are doing an expansion of brownfield expansion at Panna, along with the greenfield split grinding location at Bihar of 6 million tonnes. The work is in progress and as per schedule, and we will definitely complete within this fiscal, though our target is at maybe by December or January, the entire thing is on stream. So these are the major highlights. And if you have any questions, we'll be happy to address the same. Thank you.

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

So first of all, congratulations on a great credit results actually. So my question was in FY -- I see that in Q4, you were at 94% clinker utilization. Could you also provide the clinker produced in FY '25?

Yes, Prashant, share the numbers?

Yes, Clinker production for the year as a whole is 1.2 million tonnes -- sorry, 12 million tonnes.

Could you provide the decimal as well?

It's 11.92 million tonnes. .

Great. So like with this Panna 2 expansion coming through in December, I believe you will have a good leeway for growth even beyond '26 then. I also wanted to understand what would be the expansion plan beyond '26 now that Panna is now nearing completion. I'm sure you would want to plan ahead well?

Yes, definitely. So we are working out on the various options, as we have already told on our journey beyond for 2030 to become a 50 million producers. So we have options for Jaisalmer, and we have options in the -- in Karnataka as well as Orissa and another line at Panna. But mostly, we are just working out the possibility could be any of the things, but we are working out on the nitty-gritties and I think mostly in next 3 to 4 months' time, maybe by closer to commissioning of this plant, we should be in a position to know our next plans of expansion, and we will let you know.

So any priority that you think should be there like Panna line 3 will come...

I think it should be -- mostly we are working to -- it could be not. But again, we are evaluating everything, we're looking at all the approvals, status, so.

Sure. And lastly, CapEx plan for '26 in rupees crores.

CapEx will be again in the range of INR 1,800 crores to INR 2,000 crores in this year.

The next question is from the line of Harsh Mittal from Emkay Global.

Congratulation to management for a great set of numbers. Sir, my first question is that has there been any update on the Odisha limestone mining lease agreement with the state government? That's my first question, sir.

So not yet. I mean I updated is that we are still pursuing, and that is -- I mean, unless we get the -- either on the getting the mining lease or a long-term arrangement, which could support a project. We are still pursuing with the government. It has not completed yet. The grant has not been done. So I think maybe it looks challenging, but I think we should have an answer sometime in the next 3 to 4 months' time.

Sir, my second question is, sir, what has been the incentive book this quarter and the guidance for FY '26?

Prashant, you can give the numbers, so incentive for the quarter.

Actually, incentive, we are booking on the accrual basis. So there's not much of a difference on the quarter-on-quarter basis. It is like normally in the range of INR 75 crores to INR 80 crores every quarter, and that is likely to continue in this year also.

Except in this quarter, we have incentive, which we got for Prayagraj. So that is the incremental incentive of INR 12 crores, which has come in this quarter.

And sir, lastly, what is the consolidated gross debt and net debt? Sorry, if I missed in the opening remarks, but if you can share, consolidated gross debt and net debt?

There's no difference on the consol because they're paying off cash on the consol level.

And there's no borrowing even in any of the subsidiaries.

[Operator Instructions] The next question is from the line of Vikram Suryavanshi from PhillipCapital India.

Sir, there was a news regarding Container Corporation working with you on tank containers for bulk cement movement as well as LNG vehicles for end-to-end logistics. Can you highlight the scope of work and what -- how it will benefit for the company?

So see, there was -- on a tanker movement. This is another line which some companies are doing. So we are in discussion with them. And we will work out and everything, as you know, for freight optimization, and we are able to resell container because, again, even there, there is a lot of competition, and we had a meeting with the Chairman of Container Corporation, and then he suggested that on the container rates. So we will need to work out because there is an increased demand for bulk cement going on. So how that would benefit on movement of bulk cement.

And tank container purchase by CONCOR for some -- on behalf of some of the customers or we'll buy our own containers and use CONCOR networks, how that will be planned?

See, we have discussed, they will give a proposal. We will review the proposal and then take a final call.

[Operator Instructions] The next question is from the line of Navin Sahadeo from ICICI Securities.

Congratulations on great set of numbers. I think everything has fallen in place, be it volume, realization and the cost as well. My question was, are there any one-offs in the quarter? Like be it on the cost front or, let's say, the realization front, which are unlikely to continue in the next quarter?

No, there are no one-offs, but we have to -- we have got a good volume numbers, mainly driven by the Central India and where we are, more or less, we have been able to ramp up the entire capacity now. So in fact, we are ready for the expansion. And if we had more clinker we could have done extra volume. So -- but that is there, maybe on the -- if we see in terms of year-on-year there would be certainly numbers where the -- some of the numbers we have changed the method for -- it was more material was in transit, so that's why the sale was less. And this year, it has been -- the transit quantity has been lower. So that could be the only reason, otherwise, we don't see there are no one-offs in terms of any realization or on the cost.

And there would also be some impact because of the Maha Kumbh in the previous quarter?

No, no. Actually. See, that is one of the reasons why we have good growth, that we somehow we -- our logistics team has done a very fantastic job in ensuring -- I mean there has been actually a minimal loss to us and we could just plan it in a way that during the Kumbh itself or the dispatch, the material reached wherever it was required. But year-on-year, if you see the growth in the Eastern region is there, it's reflected. So that is not one-off, it's going to continue now going forward.

My second question then was about the difference in the EBITDA of consol and standalone. So what I observed is that this quarter, the difference between the same is almost INR 28 crores, which is, I think, the highest company has ever seen. So is it the UAE subsidiary only, which is doing well? Is it Toshali, which has done exceptionally well. I mean I'm just trying to understand the sustainability of this number.

No, no. See, it is the UAE. See, as we said the UAE plant has turned around and the UAE profitability is better, and Toshali is, again, for the quarter, if we look at -- there is -- yes, the loss has reduced in Toshali during the quarter as compared to -- as we are ramping up the things and loss has definitely reduced for Toshali. Year-on-year, definitely there is a losses of about INR 8 crores, INR 9 crores in Toshali. But otherwise, if we -- the UAE numbers will definitely -- when we are getting -- I mean if you look at it on a quarterly basis, it could be around anything between INR 15 crores to INR 20 crores quarterly.

Mr. Sahadeo, does that answer your question, sir?

Yes. Sorry, I was on mute. Just one follow-up here is that, in the past, whenever we have seen this improvement in the UAE facility, it was said as one-off or in a sense from special exports to Australia or something like that. Can we now say that UAE as an entity can generate about INR 1,800 crores of EBITDA on a sustainable basis? Is that the confidence? Or we still need to be ready to...

Yes, yes, I said between INR 15 crores to INR 20 crores on a quarterly basis. Again, there could be that there is a seasonality effect because if we see even in the heat or sometimes festival falls in, there's Eid or something, so it gets affected. Otherwise, if you look at, I think, between INR 15 crores to INR 20 crores quarterly, this should be sustainable.

Just one more question, if I may slip in, it's about our like preparedness for the Jaisalmer project. Now I understand we were awaiting some incentives or some package from the state government. But from our channel checks, I also understand, competition, some of the like regional players there are moving a little ahead of us in terms of equipment ordering or inquiring. So is it fair to assume that the state has already clarified the incentives and package and hence, that could be the next project for us and for the peers or in general, that cluster is ready to get developed or there needs more clarity?

So I think the cluster is ready for development. That I would say whatever things are -- that is an activity -- there is an activity by us. There is some activity by the competition. I'm not aware of the -- whether competition has finalized orders that I'm not aware because none of the equipment suppliers also have informed that because we do check up. I'm not aware of that. We are working out on all the details. We'll work out -- it will be a greenfield site, with railway siding and go ahead, and many things. So -- we are in the process of working out the details. And then -- and looking to the -- when the project gets completed, looking to the balance sheet, we'll definitely put up -- we'll see what the management or the board decides. So I think clear picture, as I said earlier, should be there between the next 4 to 6 months' time.

[Operator Instructions] The next question is from the line of Pathanjali Srinivasan from Sundaram Mutual Fund.

Yes. Sir, Congrats on a very good set of numbers. I just have a few questions. So we were indicating about the cost reduction journey. So could you tell us about where we are in that?

So on the cost reduction journey, as we said, we have a scope for INR 150 crores to INR 200 crores, so we have already achieved in case of the exit, at the average could be less but the exit and the logistic cost is close to INR 35, INR 40 is the exit in the logistic cost. On the green power also, there is an exit of -- so we -- I would say that around INR 75 a tonne is the exit which we have already achieved. And we feel that during this year also the -- so we would get the INR 75 a tonne benefit now going forward during the full year. The incremental benefit which this year we could get is maybe another 25%, though the exit would be higher.

Sir, but just to follow up on what you're saying, if we look at it on a per tonne basis, I think our freight costs have gone up on a full year basis, so as our lead distance. So when you say that it has reduced on a year-on-year basis, how to understand this better?

See, lead distance is a consequence of where we are meeting out the customer. You are -- we are working out on the where the cost reduction is not -- we are not talking related to lead distance. It is negotiating a better rate, you are going through a bidding process, you are dispatching at the L1 basis, you are reducing the retention at the locations, which is again helping you in the freight. These are -- lead distance is a result of where the customer like we have opened up in Bihar and so it has -- it's a new market and so the lead distance has increased because of that. But that is not a freight reduction. I mean, that would have been there. If these steps will not have been taken, then the cost would have been still higher.

Sir, I get it. Basically, you are saying that you're entering new geographies, so there's some bit of cost involved towards that. Sir, and just one more question. With respect to some region wise dynamics, like you're saying that central, the ramp-up was good in this quarter and you did volumes better than the previous quarters. So can you tell us directionally like which sectors are doing better within central? Like is it the individual housing? Or is it government infra projects, any guidance there, if you could tell?

So as you would have seen, that's for the sector, see, again, why central because we had made investment in central, and that was the biggest area we are now catering the entire state of MP and UP and gradually ramping up the volumes. And when the expansion comes up, the going forward, the increase in volumes would be from Central. In the North and South, we will be at par with the market. So this is what -- so that we do not lose our market share in these regions. As regard to demand, I think as we see -- see presently post -- you see the next year, the first year after elections is normally lower, which was there. But now the demand was good in the month of March. But again, which is again quite normal, but this year, it was a bit more exceptional. But in this month, and it is driven by housing and infra, it's a combination of all that. We have not seen any -- I can't say that this particular sector is resulting in an increase in demand. But rural demand is definitely good.

Sir, is trade growing or nontrade growing part, in Central?

See, for us, we concentrate more on the trade volumes. And we are working because when we have made -- we have to get a market share and our main emphasis is to increase the trade share. Because nontrade is more on a price driven also.

Sir, just one last question if I may squeeze in. Our other costs on a per tonne basis has gone up. Is there anything like a change here in terms of our cost structure? Or is there any element to this?

So the other costs, which have gone up...

No, it is...

Yes, Prashant.

It is mainly of the advertisement and the marketing spend, which we have done extraordinary in this quarter. And in the other costs also includes some of the costs which are variable in the nature and which goes up along with the volumes.

Okay. No, sir, I'm talking not about the quarter. I'm talking on a year-on-year basis. So it's gone up from INR 980 per tonne to INR 1,035, so I just wanted to understand like the jump is pretty sizable. It's almost INR 200 crores increase on a year-on-year basis. I just wanted to understand any specific things that we are doing extra which is like resulting in this cost to go up.

No, no. See, again, the cost going up is -- yes, Prashant, carry on.

No, basically, it is on account of the -- yes. Yes, can you hear me? .

Yes, sir. Now it's audible. Please continue.

Yes, Prashant, we can hear you. .

So I was telling that basically in account -- yes, it is on account of the network creation and the advertisements spent for the new markets. So we are doing the extraordinary cost on that account. And that is why we're seeing in the volume hike, which is higher than the industry. So that is something which is extraordinary costs.

So this will not be recurring entirely. Would that be a correct...

No, no, I will say that a marketing investment would continue to be there as we are growing. So -- and you have to maintain the trade share. So the marketing spend will -- it's an investment. See, again, accounting entry says that, okay, it is part of revenue. But as we are expanding and you are entering new markets, you are trying to maintain -- so this trend will continue to be there, this year there was a lot of demand for -- to have a brand ambassador for the Grey Cement. So we introduced a new logo and we changed the design of our bags, we had brand ambassador. Again, all this is positive, and this is why in the new region, we have been able to grow substantially during the quarter as well as during the year. So this branding expense or the call and I would treat it as an investment for some time as we have growth plans is going to continue. Yes, the per tonne impact would have been lower, but it is more reflected because overall, the volumes have not grown this year. It is only in the quarter that it is higher. But if you look at the year because of subdued demand, the per tonne costs seems to be higher.

Sure, sir. Just one last question. What is guidance for volumes of '26?

So '26 volume guidance is close to about 20 million tonnes.

Sorry, 20 million?

20 million for the Grey. And if you look at 22 million, it should be combined volumes.

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

Congrats for great result. My first question is on your clinker utilization on annual basis in North, Central and South operations, if you can give that number?

So annual basis, the clinker utilization is 82%. Hello?

Yes, 82% and yes, can you hear me?

Yes.

And how is it in like North and Central plants for yourself, clinker utilization?

We're not giving numbers for each quarter, or region.

And it is more or less same, ranging in the range of, say, [indiscernible].

Okay. And what was the paint segment EBITDA loss for the quarter and for the full year?

INR 45 crores is the loss for the paints for full year.

Okay. And can you highlight on competitive intensity and White segment because there's some improvement in realizations which you have seen in this quarter, it's specific one-off or like that competitive intensity have softened a bit this fourth quarter?

No, the competitive intensity has not softened, this is a mix number and the putty continues to be -- I mean, we are -- I mean the competition on -- especially on the putty is continuing to be very competitive. As a result, it's a declining realization per tonne quarter-on-quarter, we every time feel that it has bottomed out, but we are yet to see even beginning of the year, there are some -- though not that big, but still it is on the sliding trend, there is no particular one-offs in the quarter. What I would say, it's an annual certain things, maybe some -- it's a sort of a mix difference.

Last question on cement pricing on like post March, how has been the cement pricing trend in the markets post March?

So post March, if we see that North and Central, there could be about a 1% increase in the pricing, at least from the exit what we see. And in case of South, yes, definitely about a 5% to 7% increase is there in the pricing in the South region.

The next question is from the line of Pushkar Jain from Mili Capital.

My question was also regarding pricing. Can I confirm post March, it is 1% in North and Central and 5% to 7% in South.

Yes 5% to 7%.

The next question is from the line of Parvez Qazi from Nuvama Group.

Congrats for a great set of numbers. So the first question is with regards to the paint business now with increasing competitive intensity in that business? And how do we see the outlook for that business, let's say, in FY '26 and secondly, a bookkeeping question on the rail road mix.

So on the paint, despite the competition, as we had planned and we have been able to close the year with a top line of INR 275 crores. And again, and we feel that in next fiscal, again, we should have top line anything between INR 400 crores -- minimum INR 400 crores to INR 450 crores . And we are working on -- as we are doing this, we should be able to improve upon our margins as we have during this year we have done all the -- there was some moderation activity done at the paint plant. So where -- which is resulting in cost savings and we are working out on the discount structure, we -- since we were a new entrant, our discount structures were marginally higher as compared to competition. So we are correcting on that. The competition continues, we are not competing with the top guys, still, wherever we are as our prime reason to enter the paint business was, we were already there with putty, and we are using those counters, and we are successful and we hope that we should be able to maintain this trajectory of growth. Prashant, you can inform with the rail road mix.

And our rail road is 12%, 12% is this quarter, rail movement.

[Operator Instructions] The next question is from the line of Uttam Kumar Srimal from Axis Securities Limited.

Congratulations on a very good set of numbers. Sir, my question pertains to premium cement. We have already reached 15% in this quarter. So how do you see premium cement reaching in FY '26 as a percentage of trade, sir?

So for the quarter, we have achieved 15%, but we hope that we are working towards increase in premium, maybe another 2% increase overall -- I mean we have -- for the year, the overall was about 14%. So we should do about anything between 15% to 17% in this year.

And sir, what was our fuel mix this quarter?

Prashant?

Yes, our fuel mix was like around 70% of the pet coke and balance the alternate fuel and the imported Indian and the imported fuels.

The next question is from the line of Jaspreet Singh Arora from Aequitas PMS.

Congratulations. My first question, sir, was on the -- thanks for sharing that paints trajectory. What's the EBITDA breakeven for us? At what level do we do that?

I think in FY '27, we should be able to achieve that, which was maybe it's 1 year extension because we bought the plant, so about FY '27, we should have a breakeven.

And the volume growth that you highlighted, so you said about 20 million, I think we did -- so did you mean at a consol level? So from 18 million, we move to 20 million, if we achieve that.

From 18 million, we move to 20 million.

So that's about 10% growth. And in terms of white I didn't -- and so white, we did total put together, including subsidiary 2.2. So now you're saying 2 million tonnes.

No, it's a broad number.

But we should maintain...

But in case of White, the growth trajectory will not be much. So I mean it is very nominal, 1 lakh tonnes here and there difference. It doesn't make on a broad numbers.

Fair point. Got it. On the EBITDA per tonne, sir, we've closed on a multi-quarter high, INR 1,265 but the year as a whole was about INR 1,020, as you've highlighted. So what aspiration or what would be that broader range that will give you satisfaction for the current financial year, F'26 on a full year basis, EBITDA per tonne.

See, Jaspreet, satisfaction is definitely much higher that we should be able to maintain what we have achieved in the last quarter. That is a satisfaction level. But actually, it will not be so as -- yes, quarterly, on a year-on-year basis, we would definitely be happy if we achieve a number which is at more than FY '24, the EBITDA per tonne was INR 1,087, so happy if we are able to achieve more than FY '24 because FY '25, it was lower, so...

So we have INR 100 plus/minus, I think, would...

It's not in our hands. So yes.

Yes. And both the upcoming expansions, the grinding unit Bihar and Panna is, you mentioned December for commissioning. So do we get 1 quarter of benefit the March quarter or...

No, no, what I said that we -- our target was within FY '26, But we are working maybe by December, January, the grinding unit is upstream, as far as the brownfield expansions are concerned, which is clinkerization and 1 million tonnes each at Panna, Prayagraj and Hamirpur, I'm confident that we could be able to achieve that within December, grinding -- the greenfield grinding maybe take a month or so extra, but though we are targeting by December, latest January, they should be on the stream.

[Operator Instructions] The next question is from the line of Shravan Shah from Dolat Capital.

Yes. Congratulations on a great set of performance this quarter. Sir, a couple of questions, sir. Sir, a couple of questions. First, sir, as we are saying if we will be starting the 6 million tonne by December, January, is it fair to say that the next year FY '27 at least we should have a of 50% plus kind of a utilization. So kind of looking at 3 million tonnes extra volume should be there in FY '27.

So about definitely 2 million, 2.5 million, 3 million. I mean, as of now to say difficult because even in this year, some of the markets when we have the volume, some of the volume numbers would be there are part of -- will be part of the expansion in this year also.

Secondly, sir, this quarter, the trade mix has increased significantly, 71% versus third quarter it was 66%. So Obviously, it is a great thing. So is there a further possibility to increase this trade, sir?

No, no. See, what is actually happening in the new markets which we are entering, like for Bihar, for example, the entire volume is in the trade segment only. So when the grinding unit gets started, then we will enter -- it doesn't make sense to send nontrade in the new market from the existing plant because it will not be able to compete. When the grinding unit is there, we'll be able to compete in the non-trade segment also.

Sir, another -- just to clarify, this quarter paint EBITDA loss was just INR 3-odd crores versus the last quarter was significant higher INR 15 crores, INR 17-odd crores. But still, we are saying that by FY '27, we should be seeing a breakeven rather it should be -- this year, we should be reaching a breakeven.

See, what could happen is that as the number -- the branding investment more or less remains the same or marginal increase when I'm getting an incremental top line with an improved gross margin, we are working on improvement in gross margin. That will bring down the losses. So we are hopeful, we are working as a target. We -- our focus initially, I said well before what we said initially towards FY '28, was we are targeting is to have a breakeven by 27.

And in terms of the revenue, obviously, this year, you said INR 400 crores, INR 450-odd crores, but FY '27, previously, you said INR 600 crores. So that is...

Yes, should be INR 600 cores. So if we grow annually in year-on-year by INR 150 crores. So that will definitely help.

Okay. And sir, whenever we finalize this next expansion as we highlighted maybe 4, 6 months down the line, so is it fair to say that because we want to add another 20-odd million tonne. So roughly, the number could be INR 11,000 cores, INR 12,000-odd crores kind of CapEx that we are looking at. So on a yearly basis, from '27 -- FY '27 onwards INR 2,000 crores kind of CapEx should be there. But nevertheless, given the kind of the profitability we have. So current net debt can easily be maintained. That's the way one can look at for next 5, and 2, 3 years?

Yes, definitely, see if we have to reach the target of 50 million tonnes, the kind of investment what we mentioned will have to be made otherwise, we'll not be -- without investment, you can't achieve that numbers.

True, true, true. Got it. And sir, just a last, a clarification sir, on profitability that the INR 75 per tonne cost savings we have achieved versus what we -- INR 150, INR 200, but from the next year FY '26, we are seeing incremental INR 25. But if I have to see from average to average, maybe it should be a INR 50 kind of a savings should be there in FY '26?

So average, if you say to the average cost savings during this year over last year as we would be about INR 40 a tonne. The exit INR 75, what I said, so again, we should get on an average, another additional INR 40 -- INR 40, INR 50 as an incremental in the next fiscal on a year-on-year basis. But -- as it is, again, next year's exit would be higher.

And lastly, on green shares, how one can look at FY '26, so from 51% currently that we have?

So green share by FY '26 should be closer to 60%, that is we are working out on various things I think after Panna, it should be closer to 60%.

Ladies and gentlemen, we will take only last 2 questions for today. The next question is from the line of Sanjeev Kumar Singh from Motilal Oswal.

So UAE plant. So I believe that we are running at optimum utilization rate. So can you please share that what is the import which is being done into India from UAE plant? And secondly, are we looking at some CapEx on that plant also if the utilization rate seems to be more than 90% now?

No, no, no. One, the UAE plant is not operating at that level as yet. We are, one, we are exporting certain volume from UAE plant for our certain markets in the southern region. That's -- that volume is around 40,000, 45,000 tonnes annually. And besides that, some of the customers place order, we -- the bulk buyers, like even Asian Paints and some other players, they take cement from us from the UAE plant. So because the white cement definitely will have a lot of competition. Asian Paints plant is likely to commission sometime in Q2. And that will definitely have an impact on the White Cement consumption because they will also reduce the volume, which they are taking from us going forward because when their plant stabilizes, they will shift to their own production.

So does it mean that in White Cement and putty business, the volumes will largely remain flat over in FY'26?

Yes, that is how -- not much, yes. So we'll be growing in the putty and there may be some slippage, though we are working on new avenues, we are introducing -- we have for the UAE plant, we have entered into a dry mix category, where we are doing quite well. We have already one of the top 3, I mean, we are #3 in the dry mix segment in the UAE. So it's again, as we told earlier that we have a plan for the UAE plant. So it is, one, the old business continues, the white business, but definitely, we have to have more revenues for income as well as the profit. That is why we will be able to -- if we have all this challenges and to maintain the profitability. So this is why we are working out on Africa. The Africa is growing the putty there, so all that will result in growth of the business. Or if there are any challenges there, it will be able to maintain -- consistently maintain the profitability over there.

And secondly, for Grey Cement, when we speak about 20 million tonne kind of volume in FY '26. What is the volume, are we assuming from the new plant with the expansion which is going on and when we speak about 5% to 7% price increase in South market, how has been the price increase in Maharashtra. Can you please share this?

So from the new plant, as I said, the expansion this year could be major volume growth will again come from Central India, if we talk about -- the expansion itself could be another 0.5 million and balance will come in, there could be major quantity, I think should come in from Central India, which could be out of that 2 million tonne growth, we could see more than half coming in from Central India.

And what about prices, sir?

So prices, it has broadly mainly increased in the Karnataka. I mean not so much in the Pune region, but it is more in the Karnataka region.

This will be the last question for today, which is from the line of Amit Murarka from Axis Capital.

So I just wanted to have a sense around the volume mix around various geographies for FY '25, like between North, Central, South, if you could just give a broad split. I believe they're selling in Bihar also now. So just if you could give a rough understanding of the same.

See, Amit, broadly I would say we -- I think maybe 65% and 35% broadly and exactly from North and South should be about 65% and 35% in the Central.

Okay. And East sales like...

Central means the East plant, I mean, East is part of Central plant.

Okay. So the new Bihar grinding unit that is coming up. So like broadly, I see that there's a plan to raise volumes even in East, while you club it Central, but I see that there's a plan to grow East as well now. So like -- so in that sense -- any sense you would give on the, let's say, maybe going ahead, what is the plans on region-wise growth?

So see, again, Central plant, that's a natural extension into Bihar from Central India. So because again, Bihar does not have any limestone. So it is only fed by Central India plants. So it's a natural growth where we are setting up there. So the clinker will definitely go from Central India into Bihar.

So just wondering, generally Bihar as a market has been having lower pricing than the Central markets, maybe almost INR 20, INR 30 lower. In fact, that after the recent price hikes. So what really the rationale of going more into Bihar when you can actually maybe cater to UP, MP and with better realization as well?

See, when you want to expand rationale, what you're talking about, there is definitely some subsidies in Bihar, which we may get. As you grow, you can't only -- growth, you can't pick and choose that only we will have the desired growth and we continue to remain only in this area. How will you -- if you don't expand your territory, then you cannot grow. How will you get the volumes. It will be very difficult to get volumes only in an existing territory.

As that was the last question for today, I would now like to hand the conference over to Mr. Vaibhav Agarwal for closing comments. Thank you, and over to you, sir.

Yes. Thank you. On behalf of PhillipCapital India Private Limited, I would like to thank the management Ajay and Prashant for the call and also many thanks to the participants for joining the call. Thank you very much, sir. You may now conclude the call. Thank you.

Yes. Thank you, everyone, for joining in. Thank you. Have a good day.

Thank you, sir. Thank you, members of the management. Thank you, sir. On behalf of PhillipCapital India Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.