JK Lakshmi Cement Limited (500380) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the JK Lakshmi Cement Call for the quarter and year ended March 31, 2021, hosted by PhillipCapital (India) Pvt. Ltd. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Agarwal of PhilipCapital India Private Limited. Thank you, and over to you, sir.

Yes. Thank you, Aman, and good evening, everyone. On behalf of PhillipCapital (India) Pvt. Ltd, we welcome you to the Q4 FY '21 and FY '21 call of JK Lakshmi Cement. I need to highlight that JK Lakshmi Cement is also the holding company of Udaipur Cement Works Limited, and therefore, the call is also open for discussion about the performance of Udaipur Cement Works Limited. On the call, we have with us, Dr. Shailendra Chouksey, Whole-Time Director; And Mr. Sudhir Bidkar, CFO of JK Lakshmi Cement. I would like to mention on behalf of the JK Lakshmi Cement 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 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 differ materially from the statements made. JK Lakshmi Cement Limited and 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. I will now hand over the floor to the management of JK Lakshmi Cement for their opening remarks, which will followed by interactive Q&A. Thank you, and over to you sir.

Thank you. Thank you, Mr. Vaibhav, and good afternoon, ladies and gentlemen. This is Sudhir Bidkar, along with our Whole-Time Director, Mr. Chouksey; and my colleague, Mr. Bagga and Rajesh, to welcome you to Q4 quarterly conference call. You would have all seen the results, nothing much to mention, and we can use this time for question-and-answer -- more of question and answer. So the floor is open for question and answers, please.

[Operator Instructions] The first question gets from the line of are [indiscernible] Broking Private Limited.

Sir, I have just 1 question regarding 1 of your small subsidiaries, which is Udaipur Cement Works Limited. I was just trying to understand, what are your plans for this company in terms of CapEx, growing the capacity? And also, more importantly, I see it has a debt of around INR 500 crores. So going ahead, if at all, there are more CapEx plan in this company, do we plan to give some sort of ICDs to it? Or how does it work? In the future, do you plan to organize the Udaipur Cement in your parent companies, is that the plan?

Your voice was echoing, can you repeat the question slightly because it is echoing. I'm not able to hear your questions.

Sure, sure. Is it clear now?

Slightly better, yes.

Okay. Sir, my question is regarding 1 of your tiny subsidiaries, which is Udaipur Cement Works Limited. I just want to understand what are the CapEx plans there? And going ahead, if it is going to have any sort of CapEx, will it happen through ICDs from your parent company? And eventually going ahead, any plans of amalgamating that company into the parent? What is the plan out there, sir?

Yes. This Udaipur Cement Works Limited presently has a capacity of 1.2 million tonnes of clinker and 1.6 million tonnes of cement. They are in the midst of completing a balancing project, which will get completed, hopefully, by the end of this quarter, which will take the capacity in clinker from 1.2 to 1.5 and cement capacity from 1.6 to 2.2. This is a INR 60 crores project, which will be funded through a debt of INR 40 crores on their books directly and INR 20 crores would be their own internal accruals. Going forward, they have already announced 2 quarters back that they are going in for an expansion project, which involves setting up of clinkerization additional line of 1.5 million tonnes and 2.5 million commensurate branding capacity. This capital just will cost about INR 1,400 crores. There will be no ICD as such. It will be funded through a mix of debt and equity. We have not formed up or announced any final means of financing for this project of INR 1,400 crores. But broadly, it will be around 2 or 2.3:1, 30% promoters contribution and balance by loan. And equity obviously will come, not by way of ICD, but by way of equity inclusion can happen from JK Lakshmi. And JK Lakshmi has sufficient liquidity, it will not be required to borrow money to induct equity into UCWL. To answer your last question regarding amalgamation or merger of this company into the parent company. Right now, we don't have immediate plans. But ultimately, it will happen. We don't want to define the time line, therefore. The basic reason there -- why we are not merging upfront is the differential tax rate. JK Lakshmi -- while UCWL is that the lower tax rate of 25%, JK Lakshmi is still continues at the old regime of 35%. That is because of this match rate entitlement of about INR 250 crores setting in their balance sheet. So till the time that gets exhausted and then when JK Lakshmi also graduate to 25% tax rate, when both the companies are at the same tax slab, then that will be the fortunate time for merger.

Right. And sir, this INR 1,400 crores expansion that you mentioned, in what timeframe that we can expect to come in?

We are talking of a 3 years implementation schedule. Maybe beginning -- once this balancing project is over, that will be the 0 date for the new project expansion projects. Maybe sometime next quarter.

The next question is from the line of Prateek Kumar from Antique Stockbroking.

Sir, can you just -- congrats for great results. My question is on production and sales volume figures for consolidated an stand-alone number.

Sorry, sorry, come again.

Production and sales numbers for consolidated and stand-alone company. So -- for fourth quarter and annual numbers?

Yes. This production for this JK Lakshmi for this quarter was 17.24 lakh tonnes of clinker and 26.07 lakh tonnes of cement. And sales were 28.04 for JK Lakshmi and 1 lakh of clinker. So total was around 29.4. So that is as far as JK Lakshmi. You also want consolidated for the year?

Yes. I'm sorry, consolidated volume for the year and quarter.

Yes, I'll just -- yes, you can note down, this consolidated number for this is -- production is including UCWL total is 71 -- clinker 71.31, cement is 92.61. And sales is cement, 106.61 lakh tonnes of cement, including Udaipur annual, and clinker is INR 12.9 crores. So total is 19.25 lakh tonnes of cement and clinker. And it does include 14.75 interunit sales, which has to be eliminated. So on a net consolidated to eliminate the interunit transaction, the consolidated is 104.5.

104.5 lakh of total volume for JK Lakshmi?

Sales volume, 98.89 plus 20.36 minus interunit of 14.75 gives you 104.50.

And sir, what will be this for fourth quarter for consolidated number?

Fourth quarter consolidated number, Rajesh. Mr. Rajesh, can you give the figure for the fourth quarter consolidated, please? I have the annual one. You can come back and I'll give the answer subsequently.

And sir, RMC revenue also.

RMC revenue, I can give you right away.

Sir, I'm having the numbers for the fourth quarter.

Please, please, please.

Yes. JK Lakshmi sales was 29.04 lakh tonnes. And UCWL 581,000. Total is 34.85, and interunit which is to be eliminated, it is 4.48 lakh tonnes, and net is 30.87 tonnes.

Thank you, Rajesh. And can you give the RMC revenue also, Rajesh, please?

RMC revenue this quarter is INR 41 crores.

The next question is from the line of Amit Das to [indiscernible] Finance Limited.

Actually, my question has been answered.

Okay, sure, not an issue.

[Operator Instructions] The next question is from the line of Sanjay Nandi from Ratnavel Private Limited.

Sir, can you please just throw some light on the current scenario of demand and supply as on date that we are spending? Like what has been [indiscernible] for March quarter? And what has you seen are you as of now as where we are talking about?

Am I audible?

Yes.

In the Month of April when the wave 2 started, there has been an impact on the volume. Mainly because of lockdown and the self-regulation that many of the trade associations in different states had imposed. As a result, we may had seen an overall volume of around 70%, 72% of the industry as against the month of March. And we also followed the same trend more or less.

So sir, if I'm not wrong, it's 30% kind of volume growth happened from the [ exit of ] March quarter, right? That's what you were saying, sir?

Yes, yes. And May was slightly higher impact another 4%, 5% further has been affected because of the rural now getting impacted. It was the main stay in the wave 1 that has been badly impacted, so the volumes remain affected in the rural areas. But the urban areas are gradually coming back to life, and we expect this as the [indiscernible] things should get much better.

Much better. And what about the pricing scenario, sir, like in the other parts of the country, you have seen some price hikes happening in the [Indiscernible] So what about in our years of operations in northern region, sir? Any hike happened from the March exiting quarter?

Both in North and East, we have not seen any price increase. If at all, we have seen some slippages. But I think the bigger issue has been that the state channel segment being greatly impacted. Most of the sales for most of the companies are in the noncash segment. As a result, the overall realization is getting impacted. But we believe they are all shorter and going forward, once the wave 2 subsides things should get better in trade segment as well.

And my second question is that, sir, like, can you just guide us on what is the net debt to capacity standing on the book as on date more than a stand-alone and console basis as we could implement like schedule going forward?

Yes. We have -- on a stand-alone basis as of March debt of [ 11 25 ] on a gross debt basis. And there's a cash of [ INR 7 25 ] sitting on the balance sheet. So the net debt for the company is INR 400 crores only. So this is substantially reduced from over [ INR 1,000 ], which is -- which was there as of March on a stand-alone basis, March '20. So there's a reduction of almost INR 620 crores of net debt from [ INR 20 ] to INR 400 crores. That is as far as the stand-alone JK Lakshmi is concerned. On a consolidated basis, our debt is INR 1,650 crores so which includes INR 525 crores additional debt of UCWL. And there, the cash is about INR 195 crores, so INR 820 crores, net debt is about INR 820 crores. INR 420 crores is there, and ours is INR 400 crores.

Sir, consulting -- will you please repeat once again, sir, is INR 1,650 crores is the gross debt, right on a console basis?

Yes. Gross debt is INR 1,650 crores on a consolidated basis. And we have a cash of about INR 830 crores on a consolidated basis, INR 725 crores of JK Lakshmi and INR 105 crores of UCWL that makes INR 830 crores. So the net debt is INR 1,650 crores minus INR 830 crores, INR 820 crores. INR 820 crores includes INR 400 crores of the parent company, INR 420 crores of the subsidy.

Okay. And what would be the repayment schedule going forward, sir? Like what kind of [indiscernible]?

We have a repayment in UCWL, there's not much repayment. But in case of JK Lakshmi, it's about INR 330 crores that will mature in the coming years.

[Operator Instructions] The next question is from the line of Rahul Bira from Abacus.

Sir, just a quick question. On a broader level, I understand like we've been working on a lot of cost efficiencies. So in terms of the realization plus the cost efficiencies have bought in wonderful results. Wanted to understand in terms of going ahead, what would be the strategy to maintain the cost in terms of per tonne basis, sir?

Cost is -- as far as cost is concerned, we are in Sirohi plant, implementing a wastage recovery project. And that will take commission by the third quarter of this financial year. So that will help us to further reduce our power cost and reduce our dependence on either the thermal power. So our renewable power would be -- which is already at around 50% in case of Udaipur, 40% plus in case of this Durg will be in Sirohi also 40% after the commissioning of this wastage recovery project. So other than that the initiatives -- 1 thing which will get impacted in the coming year would be the increased fuel prices. The full impact was not there in the last financial year because of the low cost inventory, which we are carrying until almost the fourth quarter. But going forward, that impact would be there certainly. And we are also working closely to reduce our logistic costs, and that is a continuous exercise. We have been able to marginally reduce our lead distance as well. And all these factors would help us to improve our cost, barring those extraneous factor like the fuel prices, et cetera. But other than that, we are all working on that. We are also implementing additional solar power project in Udaipur that will also help us to further increase the share of the renewable power that will be implemented by, again, the third quarter, a small project of about 5 megawatts. So that will further help us to reduce the power cost.

Right. So during the [Indiscernible] is coming in third quarter vis-à-vis the current high price of [indiscernible]. Do you think we'll be able to sustain the current EBITDA per tonne run rate over the next 1 year or 2 years?

That depends on the basic [indiscernible] our ability to pass on the cost increases, which will be based on the demand, which is there in the market. So it's difficult to say at this stage, but our endeavor would be to maintain it.

Sudhir ji, I think we have got our individual unit a specific increase. These increases are the -- industry, either their logistic or the fuel costs. And therefore, our ability or the probability to thought would be better, but much will depend on when the demand really comes back. As we are hoping that by June, the demand should get back to normalcy, then the -- it's high chances of us able to correct the pricing to match some of these cost increase, the possibilities are there.

[Operator Instructions] The next question is from the line of [indiscernible].

I had a question on -- especially on the ESG side on environment. As you just mentioned about our solar plant, but apart from that, what are you all doing in terms of reducing emission? And in terms of disclosure, we can't see much disclosures from your side. So when do you plan to come up with some kind of sustainability report, like your larger peers have done?

We are already our -- all these emission norms are done within the guidelines of the parameters [indiscernible] on by the government or the pollution control board. So we are well within that. And with the further implementation of the solar power projects, be it at Durg or Sirohi or even at Udaipur, we will be able to further reduce the carbon emission. So business -- this sustainability report we'll be publishing shortly.

Will it be this year?

Yes, yes, it will come...

Yes, this year only.

This year only.

So it'll have all the disclosures in terms of [indiscernible]?

Yes, it will have whatever requirements.

It will have all the disclosures. And if you have seen our reports earlier, we were 1 of the earlier ones to take measures to control our stocks and not [indiscernible] from our Durg plant. So we are saying that even in terms of carbon footprint, we are very much in line, in fact, as good as the top peers in the industry.

That's great. And once you are done with your WHRS, how much WHRS as a percentage of your total power, what will that be?

As I mentioned, it will be almost 40% of our total power requirement would be through the renewable energy.

40%. Is there a scope to further increase?

Not -- it will -- that scope is not there for wastage recovery, but we can always add solar, depending on the availability of land. Like in case of Udaipur, we are already 50% plus. So wastage recovery, there may not be much scope because had to clean all the 3 plans, Sirohi would have done this wastage recovery. Some technical improvement can always improve, some generation of power from the wastage recovery, but there is a limit to which -- which they can go. But renewable for the solar, certainly, we can always increase.

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

Congratulation on a great set of number. So a couple of questions. One was, what would be the status for the solar project as well as WHRS?

WHRS wastage recovery, we are talking of a CapEx of about INR 175 crores, and that will get implemented, as I mentioned in response to earlier question by around third quarter. The solar power, which is being implemented in this -- Udaipur Cement Works is under the captive model. The entire CapEx is being done by the sponsor or the person with the company which is setting up, we are only inducting 26% equity into that SPV. And that project for [indiscernible] is going to cost close to about INR 19 crores and would be funded through a debt of -- debt equity of 30 70 -- sorry 70, 30, 70 debt, 30 equity. And out of that equity, we are contributing 26%. So our outgo is about INR 1.5 crores only as per Udaipur project solar power of 5-megawatt is concerned. And they have agreed to give it at a fixed tariff or it will result in a saving level. Today, the tariff and grid cost is about INR 7 plus, and this comes to us at less than INR 4. So almost INR 3 per unit, and the payback for that investment of INR 1.5 crores in 11 months.

Okay. Okay, right. And what will be the savings in the [Indiscernible] from the wastage recovery?

Sorry, sorry, come again?

The savings expected from wastage recovery?

Wastage recovery will -- because there also, it is not -- we are going to substitute basically the thermal power where it is costing us about [ 5, 5.5 ] and this will cost us waste rate recovery less than on a like-for-like basis, [ 1.5, ] so around INR 3 plus savings would also be there, including the maintenance, O&M charges.

Okay. Okay. And just 1 last question from my end. So there was some news about truckers strike sometime in February, March . So does that have any impact on our business? And going forward, is there any plans of having the railway siding in case any such road transport issues come up?

The strike issue was there in Chhattisgarh which got over after about 13 days. It impacted our dispatch in the month of March. That may not be the cost of putting up a railway line in ESG. This happened only once in 5 years. This is not something which is happen -- bound to happen gradually. But once we increase our capacity [indiscernible] going forward, and of course, we will look at as we we have [indiscernible] siding at Durg as well.

But is there -- what would have been the impact on volumes because of this for 10, 15 days?

It was a 13-day loss. We lost dispatches about close to 80,000 tonnes.

Next question is from the line of [indiscernible].

Congratulations for the outstanding results. My question is about the shareholding pattern. In the last 4, 5 quarters like [indiscernible] the shareholding pattern from the promoter side. Is there any plan to actually increase the promoter shareholders in the future? And from the pandemic perspective, is there any plan to actually mitigate risk from then pandemic [indiscernible]?

Sorry, can you repeat the last part of your question, please, slightly because you are echoing. Your voice is -- there is an echo.

The question was about the pandemic. Like, how are we planning to mitigate the risk associated with pandemic?

Pandemic? You're talking about the pandemic?

Yes.

As far as the first part of your question is concerned, you're right, our shareholding has been constant at around 45%, 46%. We don't have any immediate plans as such to increase our stake in that. So that is one. Regarding the pandemic, we are doing all possible thing, all possible precautions to see that the impact of pandemic is minimum in our case. We are -- we have already started vaccination program for all our employees across all clients and head offices, and are taking care of our employees across where there are positive cases.

The next question is from the line of Madhav Marda Fidelity.

I just wanted to understand, has there been an addition to our management team or a planned addition to our management team at the senior level that's about to happen at the CEO level?

We have inducted 1 Mr. Arun Shukla, President in the month of February. He has a rich experience in this cement, has been working with Lafarge for quite some time. And his last assignment was with Dalmia at an Executive Director's level. So that he has joined us As President in February.

Okay. And he would be looking after the sales and marketing for the organization?

As President, he is supposed to look after both sales and marketing and the plant operations.

Okay. Okay. And my second question was, given that our new capacity expansion will likely come -- the big 1 will likely come after 3 years. So for the next 3 years, can the company grow in line with the industry as a 6%, 7%? Or can we face any sort of capacity constraint on the figure side especially?

We don't see that because we do have surplus grinding capacity. And clinical, we are already doing the -- this balancing project in Udaipur, which will marginally increase our clinical capacity. Then 3 years is for the grinding to [ 2.5 ] to happen. Internal [Technical Difficulty] that clinkerization can happen, which is because the location is there, the -- there is no need for any line acquisition, et cetera. That will not wait for [indiscernible] that can happen much faster than that. In between, we can always improve the cement capacity by improving the blending and all that. So we expect our growth to be in line with the industry, there would not be much of a constraint therein.

Okay. Understood. And maybe just last question from my side would be the cost initiatives that we have ongoing. If I understand right, 1 is on the power side, which is WHRS and solar. And then we have some on the logistics side. So can you help us understand like how much savings per tonne can these bring about in the next, say, couple of years?

It is very difficult to quantify that number now, especially when the major cost parameters are still getting a change because of the increase in the petroleum and the fuel price. But, whatever measures we have taken, we expect that they will continue to give us some savings continuously at least for some time to come.

And last question from my side is, what would have CapEx number be for FY '22 and FY '23 as [indiscernible]?

In the coming year, in FY '22 as far as the parent company JK Lakshmi is concerned, we have only the remnant of the wastage recovery. So broadly, about INR 100 crores CapEx is left therein and maybe around INR 30 crores to INR 40 crores of the normal maintenance CapEx. In case of Udaipur, they will be completing their balancing project for which they have already incurred about INR 40-odd crores by March, another INR 20 crores will get used in the coming quarter and thereafter, they will embark on the expansion. So that is, as I mentioned earlier, it is a INR 1,400 crores project implementable over 3 years period. So first year, I don't see much of a CapEx, maybe around INR 200-odd crores can happen there for the CapEx.

Thank next question is from the line of Piyush from BOIS on Mutual Fund.

What's your current mix in terms of [Technical Difficulty] for full year FY '21?

Can you repeat? Your voice is echoing, can you repeat your question, please?

Am I audible now?

Yes, better.

Yes, yes, you're audible.

What's current mix in terms of trade and nontrade sales for full year FY '21?

We had close to 50% to 51% as sale. That was a slight shift compared to the year before prior to that. That is mainly because of the corona period and the first wave also. Many of the quarters, especially in quarters 2 and 3, the trade sale has not impacted and the nontrade sales emphasis had to be levied bounce back to maintain the volumes.

What was that a year before?

That time we were close to 53% to 54% of trade.

Okay. Another question is sir, let's say, I mean, just derivative to the previous participant's question. Let's say, we assume the cost inflation stays at the current levels. What could be the cost savings going forward? If you can help us quantify based on this WHRS and the logistics initiative that you are taking?

The logistics saving should result in something like INR 40 to INR 45 a tonne saving at the current rate of logistic costs.

Okay. Just another question is what sort of blended cement mix that any target to improve that going forward?

Yes, there is a continuous focus. But that again depends on how much are you able to improvise in the trade segment sale. Because our trade sale [indiscernible] Gujarat in the certain states on an average, we supply about 80% of blended cement, the trade segment. So largely it will depend on where the demand comes in the year forward -- going forward. The nontrade sales invariably results in higher [indiscernible] of sales.

Okay. Another question is sir, as you said the Mr. Arun Shukla has joined us. And his background is mainly in marketing answers. So any kind of change in strategy towards moving up the price cost? Any target internally that you have kept?

Yes. Internally, it has been our attempt to move up the price [indiscernible] We are in any case, we employ in most of our markets where we operate. We employ our A2 position. We are certainly not in the A1 where today, you only have a [indiscernible] But in A2, where you have [indiscernible] and ourselves. We are in the A2 position.

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

So just 1 last question I had on realization. So sequentially, I think you've seen almost a 3% increase in realization per tonne. So what is because of increase in prices in North market or East or do you see good price hike in both markets? And if you could give us a reasonable mix of our volumes, is that possible?

It's very easy -- difficult to segregate the -- all the 3 reasons. But broadly, the factors are there has been a price improvement in the North. Some price improvement in [indiscernible] in the East and also because of the better [indiscernible] the logistic cost and higher component of premium product sale, they all have contributed to increasing the realization.

Okay. So what would have been our premium sales as compared to early quarter or same quarter last year?

We increased almost 5% to 6% of our trade sales into the premium category last year.

Sorry, can you come again, sir?

There was an increase of 5% to 6% in our premium sales as a percentage of the trade sale.

The next question is from the line of Prayatn Mahajan from Kotak.

Great set of numbers there, sir. So just -- most of the questions have been answered. Just on the power and fuel cost, we have seen a reduction, whereas the spot prices have been increasing quarter-on-quarter. Can you just guide on we've been commenting that the impact is going to come every next quarter. So where are we on a spot basis? What kind of an impact do we see in the first half?

We should see that impact of the increased cost of the petcoke and the coal in this quarter as well as in the coming quarter. So we are almost current is now old inventory is all exhausted.

So sir, guidance on the gap, is what I'm trying to understand. Did we hedge it at $80-odd and the spot is $130, any number which we could look at, probably the impact?

We are presently booking it around $95, which were last purchased.

Okay. Sir, secondly, on your NSR increase has been quite impressive as compared given the channel takes were not suggesting an increase. Any other reason for the rise in NSR apart from premium product sales in terms of incentives, et cetera?

We don't have any incentive.

There has been no other...

Can we then assume that once the demand comes back, we can actually command a premium like this vis-à-vis competition for our products?

Well, it must depend on how much of these the premium products category product sales. There -- we already reached that [indiscernible] market at 29%, 30% of our trade sales. So the attempt will be to bring all the markets through about that level, and that should help us. That is number one. Number two, we have seen better price improvements in some states and our attempt is to increase our sales in those states. That should also help set to shore up our realization. So that's very dynamic decision in some fluctuating state to state. We have to maintain certain minimum sales also to survive in the other states. So it's a very dynamic situation. It's very difficult to comment a time like this, well already you are struggling to get the minimum sales.

That's right, sir. Sir, just 1 last question. Sir, any guidance on the volume front now that we show an 8% growth in our numbers. Any guidance for FY '22 as of now?

See, in certain times like [indiscernible], I think anybody's guess as good as mine. But what I can only say is that is the corona does not -- again not paralyze again and if things get back to normal to June, then we should certainly look to maintain a sales growth of anywhere between 6% to 8%. But it's a very big if. We all know that corona is very, very uncertain, very unpredictable at times.

Right. So I just 1 last question. So in the last 2 months or so now that we've completed May also. What is the kind of impact on the ground when it comes to the government projects? Are you seeing a demand decline from the government projects as well because urban, we feel that obviously, people are not getting -- not undertaking any work so the IHP is impacted. But how is the scenario with the government projects under these circumstances?

Government on itself doesn't become the primary constructor. It is -- they're mostly outsourced to the contractor. And depending on those contractors [indiscernible] they are able to maintain these contracts. But in states like Chhattisgarh, where they have already announced stopping us on the infra [indiscernible] because of the their inability to pay to the constructor. So states like them has an impact. Other states are -- we have not seen any decline in the infra projects. We will continue to go in the normal manner.

The next question is from the line of Amit Murarka from Motilal Oswal.

So a few questions. Firstly, couple of them on UCW. So I believe there were some incentives that UCW, which are going to expire by March. So just wanted to confirm how. So how does expire now? And what would be the impact of the same on UCW P&L?

That has expired, but that time line has gone. So they are no longer eligible for that incentive. So they were getting an incentive of about INR 40 to INR 50 per tonne. On the sales, which they were making in the state of Rajasthan.

Okay. And regards the UCW project. So like how can you mentioned financial closure is expected by June? So is it still -- you're still expect by June? Or is it getting delayed now?

I've said the first balancing project is expected to be completed by June, and thereafter, we'll embark on the June expansion project. So we will come up with the form of means of financing in the second quarter of this financial year. And that broad indication has given the debt and the equity.

Okay. Sure. Also, I think in the last call, you had mentioned that you might achieve to a rights issue also at UCW. So that again will happen sometime later this year then once the financial closure is true?

Yes, that once we do the financial, that is 1 of the options we are evaluating, whether we go for direct equity in -- rights issue. So once our means for financing is formed up, we'll certainly announce whether it is a direct induction or rights issue of that. It could be rights issue also.

Okay. So direct invention, by direct conduction, you mean what you will be giving intercorporate loans into.

There are no intercorporate loans it is going to be induction only. Otherwise, if they are also borrowing, they are 70%, and we also give ICD, then it will be 100% debt finance. That is a it -- no project of sustain 100% yes. So it will be equity injection only -- whether it will be direct or the through rights route is to be form.

Got it. Also, like, I don't know if you can already shared in the opening comments, but the result is mentioned there was a feed that might be write-off at Durg. So what was this that on account of?

That is on account of the conveyor belt, which was getting implemented therein. So last 1 year, there has not been much progress because of this COVID pandemic. So some write-down has to happen because ultimately, when you are carrying assets as per the accounting standard down by the institute of chartered accountant. The carrying cost of an asset cannot exceed the present value of the future benefit, which it is going to get to you, right? So on that basis, since it was line capital work in progress for quite some much time, and there was a capitalization of the fee operative, et cetera. And assessing various respects of the ultimate gain, which may happen, this was the best that we could have happened. So we have taken that impairment hit this time.

Sure. So as of now, you're saying that no visibility by when can we get through with the project?

I'm not saying that there is no visibility. Our endeavor is to complete the land acquisition, which is the stumbling block for the implementation of this project. If that gets completed in, say, 3 to 4 months, the implementation period is 8 to 9 months there afterwards, we are in possession of that about half a kilometer of land. So anywhere between 10 to 12 months we see this project getting commissioned. On the assumption that we did the land in 3 to 4 months time.

Okay. And this CWIP write-off, obviously, would not be for land, right? This will be maybe for the equipment or whatever you have ordered for the project?

Obviously land you don't write-off. It is only for the -- operators and some change in design, et cetera. That's all. Otherwise and some impairment in the actual machinery because it includes some rubber parts. Last time, we have taken about 10% impairment there. We have a so that 25 is part of this -- 25% of the part will be part of that INR 30 crores impairment overall, which we have taken this time?

[Operator Instructions] The next question is from the line of Pritesh Sheth from Edelweiss.

So thanks for the opportunity and congrats on the great set of numbers and strengthening the balance sheet. Can you remind me the WHS capacity that we are putting in Sirohi transaction?

Yes, yes.

How much megawatts?

That is close to about 8 megawatts.

Sorry, how much?

8 megawatts.

8 megawatts. Okay. And even your new Udaipur plant will have WHRS, I assume?

In Udaipur we already have.

The new one?

Yes, yes, in the expansion, there will be a provision for WHRS.

This new 1 is for the Sirohi one, wastage recovery which we are putting it in that Sirohi plant in JK Lakshmi.

So in Udaipur, the expansion that you're doing...

He is talking about the proposed expansion.

Yes, for this proposed expansion, we have already the plan to have a commensurate wastage recovery along with the plan.

Okay. And then, what would be the size?

That again would be about 7, 7.5 megawatts.

Okay. And 1 last question on pricing. So you said that non-trade demand is better than the trade right now. So any change in terms of pricing in the on-trade segment that we are seeing that is materially different from the trade prices. Any price in that we have seen or pricing pressure that you have seen over the last couple of months?

No, we had -- just the business of the --, but now we are not seeing any pressure because the -- most of the plate for projects are with certain time validity. So the volatility is much less there.

The next question is from the line of from Pankaj from Varun Investment.

I just wanted to know, for Udaipur, your expansion of INR 1,400, crores INR 1,500 crores, what would be the capacity of the plant that would be spent?

This new CapEx of INR 1,400 crores and clinker capacity of 1.5 million and cement capacity of 2.5 million. So the clinker, which after the completion of balancing would be 1.5 million will double to 3 million. And the cement capacity, which will be 2.2% after the completion of balancing will go up to 4.7 or close to 5.

Next question is from the line of Prateek Kumar from Antique stockbroking.

My question is on what was the annual payment for -- during the year? During the year? And why are you saying INR 175 crores CapEx for 8-megawatt -- very high.

It includes also some desulfurization project. Also number one. Number two, it will also involve setting up of a dryer of about INR 10 crores to INR 15 crores. Because right now, what is happening at times, we don't get dryer. So we were using the basic gases of the -- for drying the flash. Now since the entire gas will be used for generation of the power, there would be a lead for a separate dryer for drying the wet flash. So that is how the CapEx is slightly higher. Regarding the BCG, we have retained them for some additional work that is spilling over to the 2 years. So this year, the outgo may not be as much, but depending on what savings we are going to generate because it is in to the actual benefits which we are going to get?

FY '21 payment I was asking actually.

Sorry?

I was asking about FY '21 payment to BCG.

I don't have the figure right now. But broadly, it was -- the old 1 was already completed year before that. This year, there was some study only which they are conducted so margin payment was there other than that, there's not much payment with them.

Next question from the line of comes from Mr. Uttak Kumar Simal from Axis Securities.

Congratulation on great set of numbers. So my question is just to...

Your voice is slightly echoing, can you reduce the voice?

Sir, can you give the [indiscernible] mix for this quarter?

What mix? Sorry?

Fuel mix for this quarter.

For this quarter -- just a second. There is -- we were in terms of the power and just the pet coke, et cetera, you talk. So we have in this quarter, about 45% each of 45%, 46% of both pet coke and coal and balance is the biomass.

Okay. And sir, what has been the lead difference for this quarter?

Lead difference for the quarter, this is separate for the North and separate for the East. We are close to about INR 400 crores in the North and about less than -- around INR 300-odd crores -- INR 320-odd crores...

[indiscernible]

INR 390 crores.

Next question is from the line of [indiscernible].

I just wanted to know the stand-alone full year, if [Indiscernible]?

What is your question? Sorry, can you repeat?

Full year volumes.

For this quarter, you wanted?

For full year.

For full year.

Sorry, I couldn't make out your question.

Sales volumes, she was asking about the sales volume for the full quarter, full year know?

Full year, Yes.

Yes. Our sales in JK Lakshmi and stand-alone was 98.89 lakh tonnes. And in Udaipur, we did about 20.36 lakhs tonnes. And then there was some interunit sales of about 14.75, which is [indiscernible]. So on a consolidated basis, we did a sale of 104.5 lakh tonnes for the year.

Next question is from the line of Vinod Modi from Lion Securities.

Congratulations for a strong set of numbers. You said a INR 41 crore revenue for RMC division. Can you give me the total loan cement revenue, including block COP solar power, sir?

Just if I can Rajesh?

Total non cement revenue is INR 95 crores for the quarter.

Okay. And sir, I remember, in previous quarter, you stated that you were targeting almost INR 500 crores kind of in revenue for value-added segment. So are we still intact in our? And can you see start to jump in these non cement revenue going forward in the current quarter?

Yes, our plans are in that direction. There are some setback has taken place because of the corona, but then may by third quarter, you can see that well.

Sure. Great. And last, about -- you said 5% to 6% kind of growth on premium shipment sales compared to last year. Can you give me that -- I mean, in terms of total contribution in trade sales volume for the premium segment quarter I remember in previous quarters, you stated the total contribution of premium released to 30% is trade volume. So what is this been number in this quarter, sir?

In the fourth quarter?

Yes.

It was close to 32%, I think. But I have to see that number exactly. Don't have it right now, it's about 32%.

We will take the last question from the line of Madhav Marda from Fidelity.

I just wanted to understand that I think on the -- 1 of the interviews earlier today, you had indicated that we are targeting to go towards 4-digit EBITDA per tonne in the coming times, I think I saw we're somewhere in the range of 800 to 850 . So I just wanted to understand what are the levels of the drivers that can help us improve our margins in the next couple of years?

We are in the fourth quarter because we have seen, and even what we have achieved in over INR 932. That is without the other income, with other income it is about INR 968. So one is obviously trying to improvise further on all the levers. And therefore targeting the further increase of INR 35, INR 40 in the coming year is way of target. But however, as you are confined, much will depend on the volumes which are coming up, the impact of the corona that it supplies so, when you are able to at least pass on the increase in the cost input, which is taking place right now.

So basically, what you're saying is that it's like a INR 30 to INR 50 benefit on the internal initiatives that can add to the margins basically. Of course, a lot will depend upon commodity costs and market conditions. But is that the right way I should take it?

Yes, that's the way to look at it.

Ladies and gentlemen, that was the last question. I would now like to hand the floor back to Mr. Vaibhav Agarwal for closing comments. Thank you, and over to you Mr. Agarwal.

Thank you, Aman. On behalf of PhillipCapital. I would like to thank the management of JK Lakshmi Cement for the call, and also, many thanks for the participants for joining the call. Thank you very much, sir.

Thank you.

Thank you, Vaibhav. And thank you all the participants, have a safe and a very healthy financial year ahead. Thank you.

Thank you.

Thank you very much, ladies and gentlemen, on behalf of PhillipCapital (India) Pvt. Ltd., That concludes this conference call. Thank you all for joining us, and you may now disconnect your lines.