JK Lakshmi Cement Limited (JKLAKSHMI.NS) Q1 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the earnings conference call of JK Lakshmi Cement Limited for the quarter ended 30th June 2021. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Agarwal of PhillipCapital. Thank you, and over to you, sir.

Thank you, Rayo. Good afternoon, everyone. On behalf of PhillipCapital India Private Limited, we welcome you to the Q1 FY '26 call of JK Lakshmi Cement Limited. On the call, we have with us Mr. Arun Kumar Shukla, President Director; and Mr. Sudhir Bidkar, Executive Director, Corporate Affairs and CFO at JK Laxmi Cement. I would like to mention on behalf of JK Lakshmi Cement Limited and its management that certain statements that may be made or discussed on this conference call may be forward-looking statements related to future developments and which are 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 the actual developments and results to differ material from the statements made. JK Lakshmi Cement Limited and the management of the company assumes no obligation to publicly update or alter these forward-looking statements, whether as a result of new information or future events or otherwise. Also, JK Lakshmi Cement has uploaded a copy of the Q1 FY '26 results presentation on stock exchanges and the company website. Participant can download a copy of the said presentation from these websites. I will now hand the floor to the management of the JK Lakshmi Cement for their opening remarks, which will followed by interactive Q&A. Thank you, and over to you, sir.

Thanks, Vaibhav, and good afternoon to all of you. So this time, as requested by some of you that we need to upload our presentation, so we have done that this time. So probably you would have downloaded the presentation for the meaningful discussion in this conversation. Since we have given everything, I think we can start our conversation right away. But before that, I'll just give you a glimpse of the industry, which is important though I think all of you are in touch and you're tracking with the development in the industry but. Nevertheless, demand supply side, if you look at last quarter, the volume growth is about 5% to 6%. This is what we have seen. And there is a reasonable disparity in terms of volume growth. So some of the zones have done better, but some of the zones have not done that as good. So this is on demand side of it. On pricing, some of the geographies have witnessed a good price increase, particularly South and East. South to the extent of about 8% to 9% and East also 6% to 7%. North and West, I think, have not witnessed that much increase and also central part of India. West, in fact, I think prices have been little bit last quarter. So this is on the pricing side of it. If you look at what kind of drive we have within the organization. So I think that remains what I have been talking about for the last so many calls. We are looking inwardly as to how we can really involve efficiency across the value chain to be amongst top companies in terms of EBITDA per tonne. And I'm happy that I think directionally, we are all right. And we are working on all those levers which is going to take us to that level. On the manufacturing front, of course, I think renewable energy is one of our areas where we are focused. That is what is going to give us savings going forward. Second is the improvement of TSR, thermal substitution rate, we are doing better. And in the coming quarter, I think things will further improve. Of course, I think after this, monsoon quarter, which is typically challenging in terms of operational difficulties when you use AFR and RDF. Third is a digital front, we are working quite intently and extensively and particularly on manufacturing front. So there are a few initiatives which we are going to take on digital front, which is going to drive our efficiency further. On supply chain front of it, yes, I think constant focus is there to optimize this in terms of our dispersion and also in terms of per tonne per kilometer freight. On top line front, the recently rejuvenated brand of Greens Plus and PRO+ is doing very well. And with this merger of UCWL, and those 2 brands coming to our full JK Lakshmi fold, which is Platinum Heavy Duty and Platinum Supremo is further going to help us to improve our channel reach and volume. That is what we believe. We are constantly working on improving price producing after a month of this new launch, which we call Greens Plus. So that effort is also on. Apart from that, I think which I think Vaibhav has been mentioning in his thesis and I'm quite aligned with them that how we can really improve this ground level kind of working in terms of efficiency, in terms of dividing all those redundancies, I think that is also in our sight. So this is what we have with us. I think just brief prelude to our discussion, which we are going to have now. So thanks for now. Now we can start questions and answer.

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

So first question is on volumes and realizations, you've done quite well in this quarter. What would be the guidance that you would like to give for the full year from a volume perspective now?

As I said before, we'll do better than industry, and we are well on track. So we'll deliver that at least incremental over the industry growth, that is we are confident about.

Could you also highlight like you have -- you keep optimizing on the geo mix as you have been highlighting. So have this volume growth come from other regions? Because what we can also understand was there was weakness in the Northern India region this time?

Yes. Yes. Amit, you are right. So I think, yes, as I told in the last call also, at some of the areas where we are going to be there in the future. So we have started seeding those markets. So yes, volume has come from those areas, those markets. And you would have noticed that our lead also has gone up to an extent. So that is the outcome of that, like central part of India and particularly UP East, so volume growth is coming from there. Of course, I think North was flat kind of thing or not done that well in terms of volume. But yes, we have got growth out of those newer market one. Second, I think we had clinker also with us, so that has helped us to improve our volume a little bit. And market like MP East, which we cater from Durg and Maharashtra East, that has helped us to improve our volume. Of course, I think other zones have also done reasonably well. And we are in alignment with the industry growth in those markets as well.

And just second question on the expansion in East. So what is really the status right now? I think like is the equipment ordering done? And if not, how soon can we expect that?

Equipment, you are talking of the Durg plant expansion?

Yes, yes, yes.

Durg plant expansion, we hope to start placing the order from the current quarter.

Sure. So March '27, I think, is what you're guiding for completion...

Hopeful that we'll be able to do that.

[Operator Instructions] Next question is from Vishal Dudhwala from Trinetra Asset Managers.

So like JK Lakshmi Cement has reported a twofold increase in net profit on a Y-o-Y base plus volume growth is fantastic. So I want to just know like partially attributed to the merger with Udaipur Cement, can you elaborate all the operational synergies, already realized post-merger in this quarter?

I think almost all those synergies we had been doing before, right? So I think we have realized almost of that. Maybe I would say to the extent of 80%, 90%.

[Operator Instructions] Next question is from Ashish from Leo Capital.

Sir, can you just reiterate what's the time line for commissioning of our Durg expansion project? And my second question is what sort of utilizations, you're operating at currently in the East?

East, that currently, I think we are almost operating at 100% kind of thing. And this is what I think it was. So East, I think our efficiency is good in terms of capacity utilization. And on...

Project, we expect the first phase, which will include the clinkerization and 2 grinding unit, 1 at the mother plant at Durg and another in the Madhubani would happen by March '27. And 1 year later, the balance, the other 2 grinding unit will happen. That is what we think are the time line as of now.

[Operator Instructions] Next question is from Rajesh Ravi from HDFC Securities.

Congratulations to the team for a strong performance. So my first question pertains to, on the Northeast expansion, what is the status on the expansion, the Northeast project?

Yes. Northeast, there have been some development, which we have been reporting to the exchanges. We have now -- there was -- as we mentioned earlier, that the MDO agreement which AMDCL had granted to Trivikram Consortium that was canceled and we obviously filed a repetition in the Assam high court for against that. But finally, we have been able to retrieve at least 2 of the 3 mines having limestone reserves of about 250 million tonnes. That has come directly as an MDO in JK Lakshmi. And the third mine may be auctioned in future, but we have got direct access as 100% owner in those 2 mines. Out of 335 million reserves, which were there in 3 mines taken together. We are 100% for the 2 mines. So we are pursuing with that. The land which was allotted in the name of Mahabal in that consortium, we have now got that transfer in name of JK Lakshmi. So ultimately, this Northeast project, which was earlier supposed to have happened in a subsidiary, Agrani and other things. It will happen in JK Lakshmi as 100% owner. So what it also means that the balance consideration which out of the INR 325 crores was the transaction value for that deal, and we had already paid a based on the milestone achievement, INR 130 crores to be precise to the erstwhile owner and the balance INR 190 crores was payable on the achievement of certain milestones in future. That would obviously not required to be paid in the future. So if we get the 2 mines directly in our JK Lakshmi. The royalty is slightly higher. Earlier, it was INR 105 with escalation of 5% every 3 years. Now that has come to us at a royalty of about INR 251 per metric tonne. So that is the status. We hope to -- once the land is already is in our position. So we will start placing the order immediately after the Durg placement. It will be a replica broadly from the Durg.

Okay. So see, INR 130 crores, which you had paid to the erstwhile promoter. So is this a -- is there anything that you need to get this recovered because now it is happening directly under JK Lakshmi?

Yes, we'll pursue with them. We are exploring that once everything is streamlined as JK Lakshmi is concern, we'll explore those legal possibilities of getting that money.

Sir, what will be the total project cost now when you're doing it on your own basis? What will be the project...

Project cost is not going to change, we have to form it up. Actually, we'll be able to respond by next quarter, the exact size, which we are going to put in our -- as part of JK Lakshmi only. Earlier, we were toying with the idea of doing a 1 million tonne clinker and 1.5 tonne, right? And that was costing about anywhere between INR 2,000 to INR 2,500. Now we'll explore and then confirm maybe hopefully by -- when we have the con call for the second quarter meeting results, we'll be able to confirm the exact size and the project cost.

And 2 more questions. First on the -- could, you say the -- this non-cement revenue EBITDA? And second, what is the CapEx outgo which total on a consol basis for FY '26, '27, which you are looking at currently?

As far as that non-cement is concerned is about INR 144 crores is the total what we have done this with an operating margin of 4%. Regarding your question on -- we are doing -- in the current year, it's expected to be about INR 1,800 crores, FY '26. Yes, anywhere between INR 1,500 crores or so, then INR 1,800 crores then again INR 1,500. That is what.

Sorry. For next 3 years, 1,500 crores, INR 1,800 crores, INR 1,500 crores years guiding?

Yes, INR 15 crores, INR 18 crores and INR 15 crores.

Okay. And possible to share some breakup of this INR 1,500 crores, or how is that plays between...

Broadly, it will be -- primarily, we'll include the Durg expansion and the Northeast will happen maybe about 6 months later, but broadly, it will be Durg expansion.

And this railway siding, which is pending a Phase 2, what is the status and how much CapEx is needed...

Most of the expenditure has already happened. So that should be marginal only. Surat grinding unit, hopefully, we'll be announcing in this current quarter, ongoing quarter, the commissioning of that. So our capacity will be 18 million, and railway siding, as I mentioned, most of the CapEx has already happened. So marginally, their first phase is already over. So some revamping of the line is required to be done, which we'll do.

And the overhead conveyor belt, which was pending?

Yes. So that is also in the advanced stage of approval. So sales board has already approved, this is in line with the Ministry of Industries and Steel. So I think that is in final stages of approval now.

So it is more of a procedural delay now rather than earlier it was getting stuck because of the main approval?

Yes, procedural leader because everything -- major thing has already happened.

Just 1 last question. See, you are now present in almost all markets barring South, West, you're already -- central you're there, East and even northeaster you have plans. So what is pending is in South market. So do you think you should be also looking into becoming a pan-India player over the next 3, 4 years?

We evaluate various opportunities and size has to make a sense to us because strategically, as of now, as you rightly said, we don't have a presence. So it will not be a strategic fit, but we explored. Yes, there are some pluses and minuses for pan India and being concentrated in a few regions as we are today. But we always explore. And if it comes at the right price, Obviously, we won't rule that out. That is what I want to share at this time.

[Operator Instructions] Next question is from Ritesh Shah from Investec.

Two questions. Sir, how should we look at the cost curve difference between North and East, if you could give some broad guidance, that would be great.

North and East, cost wins, what, operating cost you're talking?

Yes, sir.

So I think only difference is in North because in North, we do use fuel, it is imported, like particularly pet coke and coal, right? But in case of East, we have that linkage coal with us, right? And more so, we are dependent on about close to 80% of renewable energies. So that is what the difference is.

Okay. And sir, from a logistics standpoint?

Logistics, I think our leads are lower than what we have in North and West because we are very focused in the geography of Chhattisgarh, where our plant is there, and we go to bordering areas of some neighboring states. So lead wise, we are lower than this place of North and West.

And sir, would it be possible to indicate broadly EBITDA per tonne differential between North and East?

Maybe I think later, we can, yes, we do not have readily available with us, so we can come back to you on that.

Sure. And sir, my second question is how should we look at the leverage profile, you did indicate broad CapEx numbers. Now the reason to ask is, there were a few press notes about we looking for 1 particular asset in Southern India. So are there any broad guidelines on net debt to equity that we have in mind and we should be looking at?

We generally want to be conscious of our leveraging, whether in terms of the net debt to equity or net debt to EBITDA. And as we speak, we have a net debt to EBITDA as of now of 1.5. Generally, our endeavor is to keep it below 3. But when we do go for the expansion as we are doing, at the time when we are nearing the expansion, the debt comes on the balance sheet, whereas the commensurate EBITDA follows 1 year, 2 years later based on the ramp up, which we are able to do from that expansion. So we'll -- even if it marginally exceed that level of 3x, but so long as the road map is very clear how it is going to taper down we take a call on that. That is how we go about it.

And sir, just last third quick question. Sir, any hopes on pricing to increase in North and West because structurally, these are far better, stronger demand supply regions in contrast to what we are witnessing in South. So how should we look at pricing in North and West?

I think prices definitely will uptick going forward. So maybe we are through now the cyclicity of our industry, right? So July, September typically is low in terms of demand. But my sense is I think prices are definitely going to move upward going forward.

[Operator Instructions] Next question is from Milind Raginwar from BOB Capital Markets. There seems to be no response from the line of Milind. We'll move to the next question. Next question is from Dharmesh Shah from JM Financial.

Sir, my first question is on the -- with the merger of UCWL and JKCL. How should we look at from a brand consolidation perspective? If there will be any brand consolidation or we will operate with all the brands?

So Dharmesh, thanks for asking this question. So as I said in my opening address that we are going to continue with the 2 brands of UCWL, which is Platinum Heavy Duty and Platinum Supremo. Now the strategy behind this is that we want to improve our channel reach, right, because now these 2 brands are well accepted in various markets where we operate. We want to leverage those brands now and more so because now they have come under JKLC umbrella. That give us a good leeway to really further expand this and reach out to more number of channels and improve our channel reach and volumetric reach. So this is what the strategy is. So in a nutshell, yes, we are going to continue with these 2 brands.

And sir, my second question is on this Northeast. Sir, I'm not very clear the reason for increase in the royalty rate and how it will change the project IRR because we are witnessing a most 2.5x increase in the royalty rate.

Royalty is based on the fresh tender, which was floated by this AMDC. So the reserve price itself was INR 250 per tonne. Obviously, it will, on one side, increase the cost of clinker because of the higher royalties, but more importantly, initial cost of the project comes down. So overall, there may not be much different in the project IRR, including the initial because we had factored that acquisition cost of INR 325. That was for 85% stake and to buy back the remaining another 100-odd. So that -- to that extent, it goes down, on the other hand, the royalty increases, but that is futuristic, upfront because of the lower upfront outgo, the project IRR I may not materially be so different.

Next question is from [ Madhav ] from Emerge Capital.

Sir, just wanted some thoughts on how do you view the increasing aggressiveness by Adani and UltraTech. And how is the competitor landscape shaping up?

Competitive landscape, has already shaped up, in fact, if you see the last trajectory of 1, 1.5 year, 2 years' time, so this has shaped up in a way already, right? And in fact, I think, see, wherever we are there, we are a formidable player. We have good presence, very good network, good reach, right? So I think we are equally competitive in those markets where big players are there. I will not name them. But wherever they are there, I think we are equally competitive. And if you see our performance also, I think market share and whatever we had before, I think, is in alignment with that. Okay. So see, competition is going to be there in the market. It's all about how we are going to have our own strategy, which is going to really take on to those challenges and ascertain our objective, right? So that is what we are doing. And this is what I think I told in the beginning also that our much more focus on improving our competitiveness, looking at inwardly, and I told you various actions which we are taking. And moving forward also, I think we are not going to relent. We have to further intensify our effort internally to kind of be competitive in all those markets wherever we play.

Could you also share some thoughts on the market share? What do we have currently?

So market share, I think, in different markets, since we are not there everywhere. So I think wherever we are there, I think we have a reasonable market share of about 10% to 12% in all those markets. In Chhattisgarh and all, we have even 13%, 14% market share, right? And Rajasthan, we have a good market share. Gujarat, we are 13%, 14% of market share. So all those markets, wherever we are there, I think fair market share, what our definition is, we should be more than 12%, 13%. And all those markets where we operate, we are kind of having those kind of market share in every market.

Next question is from Kamlesh Bagmar from Lotus Asset Managers.

Just referring to some media news saying that we are in the race for Deccan Cements. I just wanted to know the -- I know that you have articulated to the exchanges saying that we assess all those opportunities but anyway, like, just to have some sense like why we want to be in the like South market. Like if we see last 6, 7 years, like, say, barring Udaipur, we have not expanded capacity in the North market and which is the most important and most efficient and high yielding market and if we see over the last 6, 7 years, like the way the Wonder Cement has come in or various other players have come in. We are not able to scale up in that market in such a way. So why are we not proceeding with the expansion in the North market and prioritizing or moving to the south market?

Yes. So I think North, anyway, we are expanding. We have already added about 2.5 million tonnes on last 28th of March 2024. It's not that I think we have not added capacity in North and in fact, I think we have done some kind of debottlenecking also, 0.6 million tonnes at Udaipur itself, close to about 0.3 million tonnes at Sirohi, right? So idea was that let's exhaust our capacity first then to kind of move on to next expansion. And that is what I think we have done. Now since after Udaipur, anyway, I think in the pipeline is Nagore. Nagore we have mining licenses with us, and we have already started acquiring land, taking approvals, and we do have plan to set up a 3 million tonne plant out there. So I think North is very much focus in our case. And North, we are going to be a very formidable player. If you look at North, our capacity, installed capacity in North itself is close to 10 million tonnes, which is no less than even the bigger player in that market, okay? Yes. So I think that is going to be our focus. That will remain our focus even going forward, one. Second, I think you asked about exploring other markets. I think Northeast, we are not there. As an organization, we do kind of have a look at our future canvas as to where we want to play. And we feel -- we felt that Northeast is a good market where we should be in, and that is what we are trying to be there. . In East, I think I told you that our capacity utilization has reached to a level. Now we have a good plan of 4.6 million tonnes, right? So there, we want to consolidate our presence, right? Similarly, I think wherever we feel that any opportunity which comes on our way or be it brownfield or greenfield, right? We definitely evaluate and we take a very conscious and well deliberate and thoughtful decision as to how much we need to go there and to what extent we can play, right? So that exercise and as an organization, I think anybody would be doing. And that is what I think JK Lakshmi Cement as an organization we are doing. Even going forward also, we'll look at in all opportunities. We have a clear cut road map of 30 million tonnes by 2030, right? And we'll -- the way I think we are moving will definitely achieve that as well. So I think it's not that we are definitely, I think -- we are true with all those, I think utilization of capacity then going forward, we'll have that kind of growth ambition as well.

Sir, what is the status of land acquisition at Nagore plant, because, sir, honestly, like the way the competitors like Shree Cement, they came out with Nathdwara, their plant at Nawalgarh, UltraTech also came in. Then JSW, which has, like say, they are putting up or they are about to commission the plant in the next 6 months. So the aggression or the speed which the other players have shown and adding capacity in the North market and with the focus, we are honestly missing on that particular part, at least in the North market. So on that line, sir, what is the status of that Nagore plant acquisition or land acquisition?

So Nagore, we have 2 mining lease licenses. In one, I think we are almost through with all those approvals, right? So I think we are almost there where we wanted to be. In the case of other mines, we have some exchange of land like gochar land and forest land, which we are in the process of now exchanging. So that process is on, okay? Plant land, we have already identified that the place and part of land acquisition, we have already done, right? So we wanted to first kind of ensure that all those prerequisites approvals for limestone mining is in place, that we have done in case of 1 mining, almost. Second, in case of second mining, yes, we are in the process of some of the more steps which we need to take. And the land we have already identified, place and we have started acquiring land. So this is what the status as of now is.

Sir, on the Saurashtra, so we have also won mining on Saurashtra as well. So any update on that land acquisition?

Saurashtra, in fact, I think we are ahead of Nagore also in terms of acquisitions. So public hearing is already done, environment clearance is in process, land acquisition almost, I think government land, we have already obtained, some rehabilitation has to be done. So there, I think we are in the process of rehabilitating some of the people who are there on the land, right? So Kutch, I think the mining side of it, I think we are almost through.

[Operator Instructions] Next question is from Shravan from Dolat Capital.

A couple of questions and clarifications. Sir, first, Durg expansion, you said clinker is there and obviously, 1.2 million tonne grinding will be there at Durg but 1.2 million tonnes, you said Madhubani, I think it was Prayagraj, which will come first. Correct me if I'm wrong.

I think these 2 sites are ready almost in terms of land acquisition. So both the places, I think we have plant land is in place. In case of Madhubani, we always had this public hearing and we have applied for tour and environment clearance, we are going to take now very quickly, right? So Madhubani is ahead of Prayagraj as of now. So that is what we mentioned that Madhubani may come a little earlier than Prayagraj.

So Madhubani to be started by this March '26. And then the Prayagraj and Patratu, both will come by March '28 or will -- a possibility will both to come by September, next year.

So Patratu will come around '28 March, right? And along with Durg, at least Durg grinding stage along with clinkerization and one grinding station by March '27. And somewhere around mid of March '27 and March '28, we'll have Prayagraj, maybe September, October, kind of thing even.

Okay. Prayagraj would be a September, October next year. Okay. Got it. Second, sir, a couple of data points. First, what was the CapEx in the Q1? And what was the RMC revenue?

CapEx, first quarter was about INR 100 crores. And separately out of INR 140 crores, you wanted the RMC, it was about INR 70 crores.

INR 70 crores. And sir, in terms of last time, we said in terms of the cost reduction INR 100, INR 120 odd per tonne for the next 12 to 18 months. So that still remains intact?

That still remains intact, yes.

And in terms of the -- despite that we have done INR 100-odd crores CapEx, we are kind of confident that this INR 15,000 crores CapEx, we will be able to do -- INR 1,400-odd crores in this remaining 9 odd months.

Yes.

Okay. And sir, just 2 things I wanted to clarity now as we restated the tax, particularly on the PAT because of the UCWL merger. Is it possible to share the tax for Q2 and Q3 of FY '25 or maybe a PAT number?

Tax , you wanted to know. Tax, we have already switched over to the new tax regime. So whatever profit we have, going to have in subsequent quarters, we'll have to pay 25-odd percentage as per the new tax regime on that.

No, no. That I understood. What I'm trying to say for FY '25, we have restated the consol tax and PAT number. So Q1 and Q4 FY '25, we have the number with the results, but Q2 and Q3, if possible, if you have, if you can share would be helpful.

For the past?

Yes, for FY '25.

FY '25, I can separately provide, I don't have readily for the 4 quarters as of now.

Yes, no issues. And just 1 thing I wanted a clarification, sir, did we organize a plant visit in this quarter for buy-side?

Yes, Mr. Vaibhav had advertised a lot over that plant visit, invited participants to go for the plant visit. He had organized that.

Yes, because it was not there announced on the exchanges. So that's what, I just wanted a confirmation.

It was put there, I'm not sure. Mr. Vaibhav had talked to various people who he thought was -- yes, spoken to, I think, all the institutional players. So obviously, maybe you must have missed it out. Others have been able to join.

Next question is from Nidhi Hasija from Goldman Sachs Asset Management.

Congratulations on a good set of numbers. Sir, just 1 clarification. On the Durg plant, our CapEx number seems to have increased from INR 2,500 crores to INR 3,000-odd crores. Can you let us know what led to the CapEx increase in 1 quarter?

There were certain additional equipment we had talked of, which were not earlier, including the triplex, et cetera, plus some cost escalation going forward. That was about 1 year back that we had estimated it, so normative.

Next question is from Milind Raginwar from BOB Capital Markets.

First question is what will be the cement revenue for the quarter and the base quarter?

We have given separately for INR 144 crores for the value-added products, so remaining is all cement and the corresponding quarter was INR 132 crores.

Okay. And the second question from my side would be the freight cost on a per tonne basis, that is showing some escalation. Any specific things that you want to call out on that as to why would that be on an inflationary side?

Yes. I think that's what I mentioned, in fact, before, right? Yes, so it has gone up a little bit. If you look at quarter 4 lead was 393 kilometer, it has gone to 399. And the reason I mentioned that we are trying and we are, in fact, seeding those markets where we are going to be present in the coming maybe a year or 1.5 year. We have started kind of seeding those markets, and creating our brand awareness so that once we are -- we have plant there, then we can clear ramp up. So that is why it has gone up.

Okay. That is the only specific reason. The increase in the lead is the only reason for the increase in the logistic costs. Is that what we should we think of?

I think is all intact.

And any specific reason for we seeing the other expenses on a higher side on -- again, on a year-on-year basis.

That is basically because of the increase in the volume. It is not 100% fixed costs with the volumatic increase, it is there.

Okay. There is nothing specific beyond volume side that we have something loaded in the June quarter, in terms of expenses.

Yes, no.

Next question is from Uttam Kumar Srimal from Axis Securities.

Congratulation on very good set of numbers. Sir, my question pertains to our total debt profile. So what is the consolidated gross debt currently?

That is there in our presentation, which we have uploaded on the website.

Sir, that is stand-alone you have given.

Now it is consolidated because now UCWL has merged. So there is nothing called standalone or consolidated. It's all together.

And sir, how much debt we are going to take this year to finance the expansion project?

Sorry, come again?

How much debt we're going to take this year to finance the ongoing expansion?

We have talked of a CapEx of about INR 1,500 crores in the current year. For that, we may take INR 1,000 crore additional debt in this year.

And sir, with regard to pricing, how is the current pricing compared to quarter 1 FY '26 prices?

So pricing more or less stable, but non-trade has gone down a little bit in some market. Like in case of North and even in East, West trade and non-trade, both prices have gone down a little bit. So prices have gone down a little bit than what we had last quarter. And if you compare this with exit, then yes, at least 2 zones, I see that prices have slid a bit.

And sir, with regard to premium cement. This quarter, it has come down to 23% compared to 25% last quarter. So where do you see this premium cement growing this year?

Sorry, come again?

Sale of premium cement has come down this quarter compared to last quarter as a percentage of overall trade sales. So where do you see the percentage of premium cement as a percentage of trade sales going this year?

So our target is to reach to minimum 27% plus premium cement, right? And what happens is when your volume goes up then in that proportion in -- I told you that in some markets where we have ventured into, we have sold a base product. And that is why premium percentage has gone down, right? But in all those markets where we are their core market, our premium proportion is intact. But newer market told you that, UP East market and part of central market where we have gone premium product has not done that well, right? But nevertheless, I think our plan is to take it to 27% by the end of this year.

Next question is from Parth Bhavsar from Investec.

Just 1 question. This cost savings of INR 100 to INR 120 per tonne. Can you tell us from what and which initiatives be it like renewable energy or whatever. So what sort of CapEx are we putting in? And how would the renewable energy move in terms of capacity over what period? Or if there are any other levers as well?

So renewable, we are there at 49% now. And we do have plan wherever we have possibility we are enhancing that like in Gujarat and in Rajasthan, we are improving our renewable portfolio. And we see that our renewal portfolio will go around 52% in this year. So this is one initiative, of course, I think, is going to give us some kind of saving. Second, I told you that TSR or AFR, which we are using in our integrated units. So from there also, we are going to have savings. And third, on manufacturing area, we are initiating some AI-led initiatives in our manufacturing process. we'll have some savings in power and fuel also once we deploy them. So I think this is in the manufacturing area. And on top line, I told you that further consolidating our newly rejuvenated brand, which we call Greens Plus. And of course, I think just now, I replied on premium products, that is another area on top line improving price positioning further. So that is the third one, right? So these are initiative on top line part of it. And of course, I think supply chain remains a constant factor whenever it comes to drive efficiency. So there also we have planned to further improve our direct dispatches kind of work on different modes of transportation to reduce distribution costs, reduction of leads. So this is what the initiative, which is in our side in case of supply chain. So these are the 3 major areas where I think, where from this 100-plus saving is going to come in the next 12 to 18 to 24 months’ time.

Next question is from Amit Murarka from Axis Capital.

So just coming back on CapEx. So you mentioned like, I think, INR 1,500 crores, this year, INR 1,800 crores and then INR 1,500 crores, so like could you also provide a split of it like between Durg and Northeast, how will that be split?

Basically, we are talking of about INR 3,000 crores of Durg and balance will be Northeast. Other than maintenance CapEx of about INR 70 crores to INR 80 crores every year.

INR 3,000 crores over next 2 years or 3 years?

3 years. We started acquiring land both at Nagore and Kutch, a bit will go in there also.

Sure. So why I asked is Northeast, I understand is still going to take a bit of time to figure out, but like -- so therefore...

It will not take that much of time. It is almost there now. So this CapEx number which we have given for the 3 years includes 3 basic things: one, the Durg expansion, two the Northeast and three, the land acquisition at Nagore and Kutch, and the other normative maintenance CapEx.

Also, lastly, I don't have the numbers FY '25, like what would have been your split for clinker and cement sales in FY '25?

FY?

'25, for full year FY '25, how much was the clinker sales that you had done?

For the full year, total we have done 121 lakh tonnes. So out of that 7 lakh was the clinker, balance was all cement.

Next question is from Ritesh Shah from Investec.

A couple of questions. First is for the East expansion, do we have any incentives in place?

Yes. So East also, they have some incentives. So since we are in the initial phases of our preparedness, so we are going to approach to government. So they do have some incentive and we'll try to obtain some customized package also if possible.

Okay. And sir, my basic question -- yes, sorry, carry on, please?

So specific number, I think I'll not be able to put now once we approach them and then come back as to what we are going to get.

Okay. Sir, my second question is we have optionality in Northeast, you indicated Nagore. We have a lease in Gujarat, we also have something in Madhya Pradesh. Sir, how should we look at it? So after Durg, what is it that we are looking at? Is it Northeast, then Gujarat, then MP, what is the thought process? And if you could marry your answer with the limestone lease expiries that we have specifically in Rajasthan. I do understand that we have one lease in Nagore, but I think the premium order is quite steep. I think similar thing is also probably for Central India as well. So sir, how are you looking at incremental growth? And how are you marrying it with the cost curve increase that we'll potentially see?

Broadly, you have answered your question in your question only. You are right, we are first targeting Durg expansion followed by Northeast then Kutch and then Nagore in that order.

Okay. And sir, on the lease expiry, how should one understand?

Our Sirohi mines will go for reauction in the year 2030, right? So this is one thing which is there. And a couple of years later, Udaipur also. But this is the phenomenon for all across India, you know that. So a lot of mines are going for reauction in the year 2030, right? So one of our mines, of course, I think, is part of that, so yes.

Okay. Sir, just a simple follow-up. Sir, would it be possible for you to quantify how much can be the peak cement and clinker capacity first in Northeast then in Nagore then in MP and then in Gujarat. Just trying to appreciate the growth pipeline that we have, which can unfold over the next say ,5 years, 10 years?

We are starting with the Durg where we're going to add about 2.3 million tonnes of the clinker, and 4.6 cement. We are -- in the next quarter, we'll be able to definitely for sure, we'll be able to tell what we decide to start with at the Northeast. And as regards the Nagore and Kutch, they are still far away. But around -- you can broadly say 3 million each for Kutch and Nagore. Northeast is the only thing which we need to finalize on the exact size of both the clinker as well as the grinding capacity, which hopefully we'll be able to form it up by next quarter.

Due to time constraints, we'll be able to take 1 last question. We take the last question from Rajesh Ravi from HDFC Securities.

Just a follow-up question. You mentioned in the press release, there was this East expansion cost increased to from INR 2,500 crores to INR 3,000 crores.

Yes.

Any specific reason because we don't see any consumer, any increase in the capacity?

As I mentioned in response to query from earlier question, we had put it was some additional equipment like triplex, et cetera. Two, we have also added railway siding at the 3 pending units, which was earlier not part of that. So that is the reason why it has gone up from INR 2,500 crores to INR 3,000 crores.

Okay. So that will only increase the efficiencies of these assets. And when you mentioned the total project CapEx for next 3 years around INR 4,800 crores, I understand INR 3,000 crore is being earmarked for the Eastern expansion, maintenance of Durg expansion. And if I look at maintenance, it will be close to INR 300 crores, and how much you're factoring in for the 2 land acquisitions at Nagore and Surat and how much we have already spent for the Northeast expansion...

Everything is already there. So it was announced. So Nagore and Kutch may be there. So that may be not far -- very high figure, balance would go for the Northeast.

Okay. And how much we have spent for the Northeast project in FY '25 -- not Northeast, sorry, not Northeast, East projects.

East project, for the Durg?

Yes. Durg, out of this INR 3,000 crores.

INR 80 crores.

I didn't get you.

INR 70 crores to INR 80 crores only.

Only INR 70 crores to INR 80 crores. Okay. And Northeast, whatever you have just paid to INR 130-odd crores is...

We've done about INR 80 crores, INR 90 crores on land on that we have already done.

And plus INR 130 crores.

Yes.

Thank you very much. We'll take that as the last question. I would now like to hand the conference back to Mr. Vaibhav Agarwal for closing comments.

Thank you on behalf of PhillipCapital India Private Limited, we'd like to thank the management of JK Lakshmi Cement for the call and also many thanks to participants for joining the call. Thank you very much, sir, you may now conclude the call. Thank you.

Thank you. Thanks everyone.

Thank you. Mr.Vaibhav. Thank you, everyone.

Thank you very much. With that, we conclude the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.