Sagar Cements Limited (502090) Earnings Call Transcript & Summary

So good morning, ladies and gentlemen. Welcome you all to the 3Q FY '22 Business Conference Call of Sagar Cements Limited. We have with us from the management, Mr. Sreekanth Reddy, Joint Managing Director; Mr. K. Prasad, CFO; Mr. Rajesh Singh, Chief Marketing Officer; and Mr. Soundararajan, who will join us shortly, the Company Secretary. I would now like to hand over the floor to Gavin Desa of CDR. Over to you, Gavin, please.

Thank you, Manish. Manish has introduced the management. So I'd just like to add that some statements made in today's discussions may be forward-looking in nature and a note to this effect was stated in the con call invite sent to you earlier. We trust you have had a chance to go look at the presentation. I would now like to hand over to Mr. Reddy. Over to you, Sreekanth, for your opening remarks.

Thank you, Gavin. Good morning, everyone, and welcome to Sagar Cements' earnings call for the quarter ended December 31, 2021. Let me begin the discussion with the base overview of the market in terms of the demand and pricing, post which I will move on to the cybersecurity development. Demand and pricing both were expectedly soft during the quarter. Moving to external factors, and the unseasonal rains, nonavailability of sand in the East and even the ability of the labor for most part of the last quarter due to the festive season resulted in lower offtake during the quarter. Pricing trajectory subsequently trended lower, in line with the subdued demand. However, we did witness gradual pickup in demand towards the end of the quarter, which are as well for the coming quarter. While the demand and pricing were relatively benign, as I mentioned, raw material prices, though continue to remain [ stubborn ], in turn impacting the profitability and the margins during the quarter. We have seen a steady increase in the prices of diesel, petcoke and coal over the last few quarters, which in turn has continued the overall profitability growth. On the long-term basis, though, we remain positive on the business and with data government allocation to infrastructure and to the low-cost housing projects, who would provide the interesting flip to the demand growth. Moving on to Southern specific developments. We reported a revenue group -- revenue of INR 334 crores during the quarter, largely owing to better utilization. EBITDA for the quarter stood at INR 46 crores against INR 104 crores generated during Q3 FY '21. While margins for the current quarter stood at 14% as against 29% reported current -- during the corresponding period last year. As mentioned earlier, not only did we have to contend with lower demand and utilization, we also had to operate in a rising input pricing environment, owing to which we just got margin compression of almost 1,500 basis points. The overall impact on the profitability would have been even more severe, but for our prudent procurement and cost virtualization strategy. We have been working towards increasing the share of the domestic coal to better manage our power and fuel expenses. Moving on to operational development. We are pleased to announce the commissioning of Jajpur plant on 10th of January 2022. As many of you would be aware, yes, the heavy resulted in the slight delay in commissioning of the plant. Jajpur plant along with the Jeerabad plant, which got commissioned during the Q3 FY '22, should help us in diversifying ourselves outside our existing markets. We are also hopeful of retaining utilization of 60% to 65% and 75%, respectively, for these plants by the next year. Average power and fuel cost stood at INR 1,452 per tonne as against INR 865 per tonne reported during Q3 FY '21. The weighted price of coal and coke resulted in higher per tonne cost of fuel for the quarter. Credit cost for the quarter stood at INR 751 per tonne as against INR 741 per tonne during Q3 FY '21. Profit after tax for the quarter stood at INR 5 crores as against the profit of INR 50 crore reported during Q3 FY '21. From an operational point of view, Mattampally plant operated at 44% utilization level, while Gudipadu and Bayyavaram plants operated at 56% and 55%, respectively, during the quarter. As far as the key balance sheet items are concerned, the gross debt as of 31st of December 2021 stood at INR 1,390 crores, out of which INR 1,257 crore as a long-term debt, and the remaining constitutes the working capital. The net worth of the company on a consolidated basis as on 31st of December 2021 stood at INR 1,338 crores. Debt equity ratio stands at 0.94:1. Cash and bank balances were INR 490 crore as on 31st of December 2021. That concludes my opening remarks. We would be now glad to take any questions that you may have. Thank you all.

[Operator Instructions] We have the first question from Shravan Shah.

Sir, the first question is on the pricing front. So we have seen the other companies who have reported Ramco, Dalmia, actually, a Q-o-Q decline in realization. However, we have seen an increase. So the difference is too much. So if you can help us, maybe a state-wise where we have seen a realization increase for third quarter. Second, in January, how much increase now we have seen across the different states?

See, in our case, there has been a 4% increase in realization, sir, on quarter-on-quarter. The primary reason being that we restricted our movement into some of the nontrade. And we also limited some volumes for -- in this because of the relations there were lower, I think. It's more a relative kind of thing. And just to give you an update, sir, from the exit price of Q2. October, there was some increases in the pricing, which actually tied again into the November and further tied into December. You go on all from a quarter on a quarter, except for some optimization of flow of volumes. Yes, we have not seen a major shift in the direction. In our case, the relation increases because we restricted some volumes into those markets where the bout was much more severe. Now getting into specific demand as well as the pricing, beside the Nalgonda plant, it was exceptionally lower. We have never seen such a bad November for many, many years, sir. As mentioned earlier, the November was very difficult. I would not say it was contractually conventional demand. But I think that otherwise, it was a challenge for us to [ suffer ]. But for that event, probably it should have been a normal demand. The reason why we are saying that statement is in December, we have seen an normalization of demand on a relative scale compared to what we have seen in October and November. December looked very normal to usual December that we have seen in the past. So our assumption is that there was not much of a shifting in the fundamental kind of a demand structure. But for the seasonality on the unseasonal kind of ratings that we have seen during that time, it didn't impact demand is what we sort of think. And actually, when the demand was not very normal, that actually took toll on pricing. From December exit, what we are seeing into January, we have seen INR 5 increase in the pricing for most of these markets or the markets that we operate. From middle of January, we started seeing the increase in the east by almost around INR 20 to INR 25 per meg. We hope the -- for the Q3, what we have seen, the price should have bottomed out. We hope prices to move up. If not move up, at least, we believe that prices may not come down is what we strongly think. Though in our view, from the -- maybe cost structure has moved up, we do expect prices to move up. But for us to realize that, probably we have to wait. Just to give you a quick summary of what I mentioned. We have seen a INR 5 increase from December exit into February for most of the markets that we operate, both south as well as to some of the Maharashtra markets we operate. In Orissa, we have specifically seen at INR 25 hike, but that is from the middle of January, sir. We are hoping to increase further prices in our own case to ensure that we don't do the contraction of the margin. And for this, however, we hope to increase the prices by INR 20 to INR 25 from tomorrow, or most of the markets that we operate in. We strongly believe that it should sustain. Worse come worst, probably we would have hit the bottom. That's what we strongly think.

That's a great. Hopefully, the prices -- the increase that we are expecting should sustain. So the related one is, previously, we were talking about or guiding a 3.6 [ centimeter ] volume and INR 1,000 EBITDA per tonne. So now how do we see -- so definitely, both is related in terms of the EBITDA is pricing and also on the costing front. So how do we see that even the costing on overall business in the fourth quarter? Will it inch up further?

Yes. In our case, we did for the 3.6 million, with an assumption that we will be doing around 400,000, 200,000 each at Jajpur as well as Jeerabad. But unfortunately, with the delayed commissioning, we are not able to take it close to those numbers what we aim for. But the silver lining is that we could do better numbers at the other places where we have been operating. We should end the year with 3.5 million, again. Very close to that number. So we'll be falling short of 100,000. Going into the specific EBITDA, yes, we did guide for INR 1,000. But now I think with only 2 months left, yes, we think anywhere between INR 850 to INR 900 per tonne is the possibility. Very specific to cost-related issues, sir. As we Q2 and Q3 we're very -- where we consume imported coal, yes, we consume the entire high-cost imported coal in our case. Yes, we do expect a reduction in our power and fuel costs since we are switching our company to a different stake. The overall average domestic coal landed cost is INR 1.75 per kcal. These are INR 2, 80% for an imported coal or INR 2 for an imported pet coke. We believe that the power and fuel cost not only should moderate, but it should start inching down for us for the current quarter as what we are guiding is for.

So net-net, the overall operating cost is likely to see some reduction in the fourth quarter?

Yes, sir. Yes, sir.

Okay. And lastly, on the debt front. So will this be the peak date that normally, we were talking about INR 800, INR 850-odd crore, so...

Sir, let me clarify here. I think our peak there would partly should be on the INR 850. There is a one-off event that we actually have done -- taken a structured debt instrument in anticipation for a potential kind of an acquisition opportunity. So given that cash is sitting with us, so I don't think we should be crossing for an existing assets, and what we have done so far. Yes, I think the peak debt should not be more than INR 850 crores as we have guided, yes, sir.

Lastly, sir, on the -- as you mentioned, in terms of the acquisition. So we were looking at -- so now we are at 8.25 MTPA capacity. So we are looking at 10 MTPA by FY '25. So will it be inorganic? And that, too, the last time you had talked about the Andhra Cement that we are looking at, so is it the only one? And if it doesn't materialize -- so in terms of organic we can still add 1.75 by FY '25?

Yes. Mr. Shravan, I'm sure you would appreciate, our guidance for FY '25, we see a definite possibility, if not every year. So moving to organic or inorganic, I think please bear with us. We are working on a couple of options. We will be quick to revert, probably by early part of next year, we should have come back, [ we've diagnosed ] whether it is inorganic or organic kind of expansion plan. At this point of time, what I can say is that we are preparing ourselves very well. We are evaluating on a couple of options. Unfortunately, it is too soon for us to go into the market because it's not yet satisfied as we speak. We are hoping one of that should turnaround fairly quickly, and we are not very faster. I think by Q1 to Q2 -- coming Q1, Q2, we should come back to the market with the good news about our acquisition plan.

The next question is from Saket Kapoor.

Yes. Sir, just slightly repetitive questions maybe, kindly bear with me. Sir, which are our key markets, sir? And what is our 9 months clinker in cement volume?

Yes. Mr. Saket, I think we did disclose the cement numbers in the early part of our presentation.

Right, sir. I'll go through it.

We're very happy to give those numbers. Now what are the key markets is a good question. For the assets that we are operating, sir, we have been primarily into the South AP Telangana, North of Tamil Nadu, certain pockets of South Tamil Nadu, Karnataka, Maharashtra and South Orissa. Yes, with commissioning of -- commissioning and ramp-up of both Madhapur and Jajpur, I would say Jeerabad and Jajpur, we would be getting into the demand of the region with Jeerabad. That is northern and southern parts of -- southwestern parts of Maharashtra. And Jajpur would be the coastal and the northern part of Odisha. These are the 2 additional markets. We will be addressing these 2 assets, [ getting function ] and on the ramp up stage, sir.

And sir, when we hear players like Dalmia Bharat, having pan-India presence, players like ACC and Ambuja, and their ambitious plan for this decade, how do companies of our scale are looking for their existence and their market share, say, 5 years, 10 years down the line, when mammoth players like Dalmia are eying 130 million tonne? If, sir, they reach even 90% of what they are contemplating, what kind of market share players like -- smaller players, if I may use the use word, marginal players, like you and others in the South will be left over with then? What is your strategy going ahead to be relevant in this sector when such a big expansion is -- drive is on the card?

Yes. Mr. Saket, our stated objective is to double every 10 years, sir. Yes, we have completed 41 years of our existence. So I think we have reached to a stage where I don't think we should be struggling for our existential issues. We should stay relevant. As you said, we have to stay relevant. Yes, some of the payers, obviously, are growing at a much faster pace than the market. But we model at pace with the market. So I'm sure we would not ignore the aspect that staying relevant is very, very important. In the market that we operate, sir, we are 1 among on the top 5 players. That's what I would like to highlight. In any region that we operate, we are 1 among the top 5 players. Yes. On pan-India, we might be irrelevant. But in the cases where we operate, we still are relevant. And I'm sure in 5 years to come, we would stay even more even relevant than what we have on this day. Our strategy is to double ourselves every 10 years. That remains irrespective of how others come up with their growth plans. Unfortunately, this is 1 commodity which actually is offer. It is not only useful, even small sometimes is also very, very relevant, sir. And we are here, as I mentioned to you, 41 years back. When we started, we were 200 tonnes per day, sir. Where today, I think that was the case. The large players who are becoming much larger, but we have grown from 200 tonnes per day to almost close to 50,000 tonnes per day. And we are also looking to grow, may not be at a pace which used to be like, not the market or in line with most of the other large players. But I'm sure, we would stay relevant is what I can comment at this point of time.

Couple of past points there. What is our current market share in the key geographies which we are operating? And what portion is credit...

Sir, that's not a KPI for us in terms of market share, sir. As I mentioned to you, in all the markets that we play, we are on among the top 5 players. Market, in our case, is around 30% to 35%, sir. It keeps changing through the season, but around 30% to 35% is the nontech market share in the product in our portfolio.

Right. Sir, and what explains this huge inventory buildup? Is it the market conditions only? And does this even out...

Seasonal-related issues, sir. See, as I mentioned to you, we will not see a major shift in structurally demand-related issue. We were producing normally. Others would have calibrated. But we did not expect seasonal so -- which actually pushed us to sell the entire thing until it got fined up.

So what is the status now, sir? As on the first month, we are exiting January today. What is the...

Same for this, extremely good, sir. January is also better. We are back to the -- to what we generally do in usual December and January, sir.

No. Sir, because when we look at your September numbers for inventory as well as the December numbers, the pile-up looks at INR 40 crores inventory for the 9 months. So that was not the case last year, maybe because of various other factors, also.

You plan for an off-season, but you don't plan for the season, sir. And as I mentioned to you that we were hoping it to be a very good November. But unfortunately, because of the weather-related issues, we could not dispatch, sir. Everything, I accept. That is not the case in an off-season, because you obviously go through the annual maintenance, and you'll know that it's an off season. So you don't have enough inventory. But that's not the case for the November month, sir. As I mentioned to you, we were -- I would say that the unseasonal rains were -- did impact the overall kind of slow activity, yes. So everything remained as inventory.

Right, sir. And about your power and fuel mix, sir. What is our currently power and fuel mix? What portion comes from WHRS? What is our investment there? Or what are we contemplating in terms of increasing the WHRS share, if you could give the mix breakup?

So right now, we are at around 15% to 18%, the basic recovery. The basic recovery plant at Sadguru is due for operational in the current quarter. So with that, it'll inch up to 20%. But our portfolio is green, sir. We have hydro stations. Yes, we have solar. So the overall mix is to have around 25% at a group level. But over -- every 5 years, we intend to have 500 basis points added up to the green portfolio for investing assets. Because basic recovery, the only possibility is that Gudipadu. But unfortunately, we have a captive pipeline there so. So we have to look at the commercial feasibility, also. So we would add up 500 basis points for each 5 years, which we intend to have 50% in that portfolio, the green power, that includes the basic recovery.

And what is the cost per unit, sir, for power consumed, if you take the blended cost?

Yes. It should be around INR 10.55, sir.

Right, sir. And sir, there were, earlier, some issues with Andhra players about these billing charges and this Andhra Pradesh Power Corporation. Are we in...

Our exposure to grid is very, very little. We are self-sufficient, so we're not connected with the grid, sir. We are not connected with the grid.

Connected with the grid, sir. Okay, sir. And about the lead time, sir, what is our -- lead distance, Sorry.

Lead distance today is at around 281 kilometers for the last quarter, sir. In the Q2, that is -- yes, we had told, in last quarter. But going forward, if it could even become lower because Jajpur and Jeerabad becoming operational [ dilutes ] -- still, it's likely to come down even further, sir.

Sir, I have not completely gone through the presentation. Sir, what have been our -- how much is the clinker sale for this quarter and the 9 months, sir?

Sir, we don't sell clinker outside.

Okay, right. So are we purchasing clinker and selling cement or...

No. We don't -- we have -- in this quarter, we did not buy clinker nor we sold clinker.

Okay. Sir. And lastly, about the sand part of the story, sir. What has actually happened that has resulted in the sand issue in the eastern? And where are we in midst of that, sir?

For us, we are not into sand market as we speak. So we don't get directly impacted. But usually, sand becomes difficult. You really want some time because that's not investment, so you cannot do sand money. Coupled with that, some states sequencing have been what they call as the rationalizing. There's mining-related regulations. So whenever these regulations come -- and unfortunately, these are not happening, all these things together, sir. The states will be following a sequential mode. So the whenever the regulations keep happening at each of the state, for a very short term, the mine, the sand mining is impacted, sir. I think that was the case even here.

No, sir. Then how were we affected, sir?

We did not get impacted because of sand money, sir.

Okay. Because you articulated to the fact about mining...

And that was a general market narration, sir.

Okay. Okay. Right, sir. So then, how do we explain this power and fuel mix quarter-on-quarter increase, sir, expenses from INR 77 crores to INR 91 crores? What factors attributed the coal prices only or the petcoke...

Sir, I would encourage you to look at the presentation. I think you missed it, sir. It has the landed cost, we were able to indicate. So we -- and if you need any further clarification, we will be happy to address that.

Correct, sir. And you told that we will be -- we are contemplating a hike by tomorrow of INR 20, INR 25. That was a...

Yes, sir. Because we -- it's a season that we are getting in. So...

And in which markets are we looking forward to...

It was the market that we operate in South and Maharashtra.

South and Maharashtra. And sir, in that -- you have told we are in the first 5 leagues in all the markets where we operate.

Sir, when you look at Maharashtra, don't look at Maharashtra, sir. Each district that we operate is what we should be tried about. It's not that we are big in Tamil Nadu and Karnataka. But in each of the districts, sir, wherever we operate in each of the case, we are 1 of the 5 players.

We have the next question from Prateek Kumar.

Yes, sir. A couple of questions on your acquisitions. So now we have both of them online. So how do we see logistics savings or product mix savings flowing in trough to the profitability? Is this something which you would like to retain or like pass through to in more pricing for better volumes?

Yes. Prateek, generally, we are not a market share player, sir. As I mentioned, this would not save on the existing cost, sir. It should overall -- reduce the overall kind of logistics cost. Because these plants are not in the footprint areas of where we operate. So the issue of savings from where we are, it doesn't arise. Yet the overall optimization is like it should drive. That is retention is the possibility. That would be my statement. Though it's very special, sir, but that's where it remains, Mr. Prateek.

I mean -- so you're not expected to save anything in terms of unit cost...

It's the overall cost, but I'm not -- see, if I'm incurring certain trade costs today for each of these new and -- these new assets, we are not going to reduce any of those budgets, sir. Because we are not -- [ those big ] areas are not common. But each of the overall contribution of each of them could reduce to the [ relationships ]. In turn could reduce freight on an overall kind of a number. That would be the case even in the product itself. Right now, as you know, for the markets that we service, have kind of 60 -- 55%, 60% OPC. These 2 new assets, both at Jeerabad and Jajpur are heavily into the lending. So the overall mix is going to change dramatically more towards the building materials. Would that relate to the savings? In a group that has consolidated, yes, it looks like that. But it's not at the expense of the current asset that replacement is happening. These are all new, in a sense, business.

Okay. And your central plant, it's been now 4 months of it commissioning. So how is the utilizations there? And the other plant has just started, so it would be low, I guess.

The creation is close to 20% for the quarter that went by. We are hoping it to ramp up to 40% for the current quarter's.

40% for Q4?

No. No, for Feb and March. Jan is already done. So it is pending along with the seasonality statistics. So technically, we have reached a clinker to around -- 2,500 TPD has already been reached. So dispatches are there. Yes, we are not putting incrementally into the market. We are very, very conscious about where we want to get so are not changing the volumes there also. So it's a question of ramping up smoothly. So that's what we expect for the next 2 months. It is between 35% to 40% capacity creation and also wind. Now Jeerabad, we just commissioned. So I think Jeerabad dispatches should start getting in from middle of February. So this month, February month as well as March is more for the ramp-up. In the next year, we are expecting around anywhere between 60% to 65% position for both these assets for the coming year.

And on the now with the Orissa unit. So we'll be using more of slag also in the market. So how are we positioned there? And how are the general slag pricing trend, given we have seen the reduction in demand in east? So is there a softening in slag price as well?

Sir, slag prices are fixed by the seller, sir. We have not seen a substantial reduction in the slag prices. They remained what it was for Q2 as well as Q3. We have not seen any immediate shifting the slag offtake at Jajpur. But I think this quarter onwards, we will be buying even more. Our stock up was primarily for the initial kind of a thing. Our regulative procurement should start from this quarter. So we did not get volume disruption, obviously. So we did not pick up the volumes. But we have not seen any major changes in the slag prices on a landed basis so far.

And one last question on industry pricing. So now January is behind. So anything on, like, February, like, industry be like sort of thinking of addressing, like an...

I do not comment about the industry, Mr. Prateek. In our case, we have decided to increase INR 25 from tomorrow for the markets that we operate in South and Maharashtra.

The next question is from Amit Murarka.

So the first question is on volume. So while Q4 last year had a high base. So is it right to say that on a last year basis, probably we'll still see maybe flat declining or volumes?

You're talking of state or you're looking at our own volume?

Your numbers, I'm looking at your numbers...

Because as I mentioned, from -- we have guided for the 3.6 million for the full year. We might end up at 3.5 million. As we speak, we did 2.5 million for the -- up to Q3. So we are hoping to do 1 million tonnes in this quarter, sir.

Yes. But that will include contribution from new plants also, right? So in that sense, from the existing plants, in that sense, probably we are looking at a decline Y-o-Y.

I would say flattish trend, sir.

Okay, fine. And also on the cost side, you mentioned that you expect power and sale cost to drop in Q4. So how much will be the domestic coal sourcing in Q4 for you, roughly? What is the estimate?

70% of our fuel mix would be the domestic coal, Amit. And the other would be the domestic petcoke.

Got it. So no imported coal in Q4, then?

Yes. We have exhausted, sir. In fact, it got rolled over. We're hoping to use it in Q2, sir. But we've got to roll over into the Q3, that did impact some amount of cost for us during the quarter vis-à-vis while we are totally exhausted. It's going to be domestic and we -- domestic coal and domestic petcokes.

Sure. And just lastly on incentives. Do these plants in Jajpur and do all, though, they carry incentives?

Yes. Jajpur, yes, we are going with the incentives what is there on paper, which are very, very low. Jeerabad definitely has incentives, sir.

I remember in the last quarter, you mentioned that you are changing the policy to like booking incentive on a received basis, if I'm not wrong.

Yes, sir.

Yes. So going ahead and, like, just on a received basis, do you expect something to be booked? Or it'll have to wait for a [ lifetime ]?

Not in Q4, sir. I think going forward from next year onwards, for sure, because we have not done substantial volumes at Jeerabad and Jajpur, so we are not likely to receive anything from -- it's got accumulated, so that we call. The issue comes, but we are not expecting any majorly -- the cumulated incentives in Andhra and Telangana to go into the roost so soon. For the other 2 assets, we do expect from the coming year, not in the current year, sir.

The next question is from [ Kashvi Dadia ]

Sir, what is the effect on account of WHRS? Like how does it help to reduce cost? And how much savings per tonne is done on account of WHRS?

I think it's an open-ended question, Kashvi. Yes, basic recovery typically contributes the power connection to the source of electricity. If you are connected with either a CPT or [ DLT ], the basic recovery, except for the CapEx and a very, very small OpEx, the cost is very, very limited. So whatever you are generating from basic array, the cost would be very, very low coming from the structures first, which are either captive pipeline or the delayed. So that would be an effective contribution to top to bottom line now. Now that's very, very generic question that you had. It's very, very specific to each of the size of the electricity recovery, and the capacity of the kiln line and -- or clinker line so it's very specific to each of the asset, I would put it, Kashvi.

[Operator Instructions] Yes. Saket, you may go ahead with your questions.

Yes. Sir, as we have seen in the presentation, the blended cement total proportion is now 50%. So, sir, now with the Jajpur unit being -- getting commissioned and ramped up. What are we eyeing in terms of...

55% for the coming years.

55%. And what would -- the Jajpur will be having the higher contribution because of the ability of...

Jajpur is 100% blended, sir. Jajpur is...

100%. Okay. So where will this blended part improve, sir? Which other units this include...

Jeerabad will be 90% blended and 10% OPC. Both the assets are heavily towards blended, Mr. Saket, so.

Okay. So sir, where are there -- where there is a higher of OPC? If we have these 2 units at 90%, 100%, there would be others that would be significantly lower.

Our existing things, as you have seen, they're heavily into the OPC, sir. So we don't expect a major shift in the existing operations. What we are expecting is a contribution coming from those 2 assets itself.

Okay. So sir, in that case, is it the market itself that bearing on the...

Sir, on the recoveries, sir, we don't make the choice, sir. You have -- the government part of your portfolio and we have some of the institutional buyers. And some of these South markets are more -- even the retail markets are more towards OPC, sir. So it's market, which actually guides us to do what we do, not other way around. If we had the choice, we would have gone 100%. That's not case. We go into what market we want.

Okay. Sir, for the limestone availability, sir, what portion is it captive and what is the way forward for that? How much are we sourcing from the market?

Sir, everything -- limestone is 100% captive in our case. We clearly have large resources, Mr. Saket. I would encourage you to look at our IR, report, which is included in the indicated report. It is exhaustive and it takes [indiscernible]. Anything further, we would be very happy to address, sir.

Okay, sir. And last 2 points will be the firstly, how have the cash flows look for these 9 months. So when we look at your cash balance, they have gone up vis-a-vis March. So if you could explain, sir, what has been the utilization of cash for these 9 months that would very...

Our cash balance is partially because we did borrow a structured debt instrument in anticipation for an acquisition, sir. That is to the tune of INR 500 crores.

Okay, sir. And that acquisition, we will be hearing about it sooner. That is what you have informed us at the end.

Yes, sir.

And that will be a domestic acquisition only, sir in this...

It will always have be a domestic player.

Okay, sir. What has been the CapEx for the 9 months of this INR 500 crores we should include then in the CapEx that should consume it by March?

No, sir. It is definitely not going to reflect the current year. As I mentioned to you, we will specifically come back to you during the Q1 or Q2 in the coming years.

Correct, sir. And sir, did we participated in the other NCLT cases, sir?

Sorry to interrupt, sir.

Yes, I'll come back. No issues, sir.

Shravan, you may go ahead with your question.

Sir, 2 things. I just wanted to know, sir, you said that in the fourth quarter, the domestic coal, sir, will be 70%. Did I hear it rightly?

Yes, sir. You are correct.

Okay. So currently, so the petcoke, which is -- I'm looking at the number, it is 60%. So it will then reduce significantly in the fourth quarter.

30%, yes.

Okay. Okay. Okay. Second thing is when we, sir, talk about -- say that from tomorrow, we are taking a INR 25 hike in South and Maharashtra. And Odisha, you already mentioned that in the mid of January, already INR 20, INR 25 hike has happened. So any further hike in East? Are we looking at...

Yes, Shravan. I think let's just take 1 step at a time, sir. Yes, we would want to see how this is shaping up and then talk about how it is likely to happen. East, we are just consolidating our position here. So we would want to see how the market is shaping up and then take a call further. But there are no new markets, we are already there. So we would want to try out of increasing the cost and see how the market will shape up and then take the further call.

Okay. Okay. And the hike is, even in terms of the nontrade also, the same hike would be helping...

Our position is -- we surely started reducing our exposure to nontrade. We need to further increase the price even in nontrade. But most of the plants, they increased the pricing in nontrade, sir. There are some others who are chasing it. It may not combine as fast, so and we are not very willing. So we would want to take increase, both in trade and on trade as far as we are concerned.

Okay. So post this INR 25 hike tomorrow, what would be the difference between trade and nontrade for us?

Sir, in our case -- it's a case-to-case effect, sir. The -- there is a very specific -- there are some orders of nontrade, which is very close to the plant, where we have taken very, very aggressively. Some we have to lead -- so it's a very specific case-to-case kind of -- and there are government orders which have been a contracted kind of a price, so it doesn't move. So the realization gap, what we have seen in the past tend to continue is what we believe. The relation gap is around INR 250 in our case, sir, per tonne. But at a blended level, sir. There are some nontrade orders that contributed higher than the year, nontrade, but most of them are lower than the trade, sir. The difference is around INR 200 to INR 250.

Okay. Yes. And what's the actual number for CapEx for -- until now 9 months, and likely for the fourth quarter? And maybe if you can help us for the next year, the CapEx number.

Yes, see, we have done the 3 years -- what we have announced 3 years back, the CapEx already computed, sir. There is nothing new that is due in the current Q4. We completed the EBITDA and CapEx, as I mentioned, [ Q1/Q3 ] barring we -- very small, a INR 4 to INR 5 crore kind of a thing, which is, I think, the general maintenance CapEx that we do. That part is done. Kindly bear with us for us for the next 3 years, I think, in terms of the much larger CapEx to be announced, which will be announced either in Q1 or Q2 in the coming years, sir.

The next question is from Indrajit Agarwal.

A couple of questions from my side. One is, can you give us some flavor of some of the government projects or non-trader institutional demand? How are those shaping up? Is that -- are those facilities for sure? Are you seeing some kind of slowdown in those sectors?

Yes. No, our exposure, as I mentioned, is Mr. Indrajit, so I can only comment about where we are servicing for all the projects we're on. I mean, nothing much to disturb except for the weather-wise related issue. Now very specifically to the government, sir. I did mention even in the last quarter call. The government outstanding actually increase. So we -- those order flow was there. But we curtailed the orders because the outstandings were going down. They did normalize quite a bit during the end of last quarter itself, and even the current quarter. But for the -- otherwise, we could have done something more, we expect those things to come back to normal. So there is not a big shift in what we have seen the trend lines over last year -- or last few quarters. There has not been any new major announcements that have happened, but the projects which were ongoing continue to be at same pace, but for the weather-related issues is what we see, sir. This, again, is where we had exposure, sir. We generally don't run beyond what we generally do. So that's what I would like to limit to these projects. We have not seen any slowdown except for the -- otherwise, we could not service them. And -- but for some of the payment-related issues, we could not service for the most part of Q2 and Q3. We expect them to normalize now in the current -- and which have normalized now, this is what I would say. Even in January and some part of December, we started supplying to government again, extended.

My second question is on WHRS. After the current round of expansion, how much more scope do we have to expand on WHRS?

Sir, we have 4 [ Sagar ] lines, 2 of them are with waste heat recovery, 1 is due for ramp up, 1 is already existing. The other 2, 1 in Gudipadu, and the old line of Mattampally, they don't have the waste heat recovery. Now our investment in the waste heat recovery, we would want to take a call [ judicially ], because this is a large -- [ can't do ] pod planting in Gudipadu. Once we go for expansion in Gudipadu, that's when probably we'd want to invest in [indiscernible] story, both for expansion and letting the existing one. Yes, Telangana at Mattampally, as you know, with Jajpur ramping up, we do expect Telangana also to start operating at a much higher capacity collection. So probably in the coming year, we want to take a call. With the investment we do, it seems to turn with the -- in that particular asset -- on that particular asset.

On a ballpark, what would be our CapEx per megawatt for waste heat? Is it more like INR 8 crores to INR 10 crores or higher numbers?

Sir, we have not seen anything lower than INR 12 crores per megawatt, sir.

INR 12 crores. And is it fair to assume somewhere around 3.5 to 4.5 years kind of payback? Or is it too generalization, do you think?

No. I think it's too generalization. Sir, it, again, depends on what is the source of power you will have and which state you have. Some of the states are incentivized for the power, some are not, sir. But our experience is less than 2 years, we would strike a possibility, sir.

Just like the facility?

Yes, sir.

The next question is from Dharmesh Shah.

Sir, just one question. Sir, can you guide on the profitability guidance on the recently commissioned capacities? Is it possible, sir?

Dharmesh, I'm sure you're here with me. We are just ramping up. Market is in a fluid situation, but bear with us. We would revert to you as soon as things stabilize.

[Operator Instructions] Rashesh Shah, please go ahead with your question.

Sir, just one question on that front. What is our debt repayment schedule for taxes payers barring this INR 500 crores of that subsidative comment with your risk?

Yes. Around INR 200 crores per year is the principal payout, sir, in our case.

For this year or next year?

Yes. Next year, sir.

Sir, a couple of questions from my side. Sir, can you explain the demand scenario in the East like last 2 months were pretty rough. I think December onwards, are we seeing some improvement there? And what is your outlook for Q4 and Q1?

Yes. Manish, we are not seeing a problem with the demand. As I mentioned to you, it is only because of the weather-related issues that the demand could not be serviced. In East, the problem is with supply. I think too many people are trying to think that there is a lot of supply vis-a-vis to shrinking of demand, right? We have not seen shrinking of demand, sir. But for the weather-related issues, since some events that have happened like availability of standing, we haven't -- and manpower availability. We have not seen, fundamentally, any structural change in the demand. It remains robust. That we have not seen. We do expect East to grow consistently about 10% for the next couple of years. So we don't see that as a challenge at all. Yes, the December month was a strong month for us even in East, January also, our calling to the East, sir, did not get disturbed. We are resolved and very, very strong. The East, the only struggle was with the pricing. Yes, fortunately, during the middle of January, there was a good correction, but that is not enough, some more is needed. East, the issue is only on the pricing trends, sir. Nothing to do with the demand. Demand looks good and it looks calm.

[Operator Instructions] So as there are no further questions, we would now like to hand over the call to you, sir, for your closing comments.

Yes. Thank you. Thank you for taking your time out and joining on the call. I hope you got all the answers that you were missing for. Please feel free to connect our team at Sagar or at Citigate should you need any further information on or you have any further queries. We'll be more than happy to discuss them with you. Thank you again. Stay safe. Thank you. Thank you, Manish and keep well.

Thank you so much. We will now conclude this call. Thank you, everybody.