Shree Cement Limited (SHREECEM) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to Shree Cement Limited Q2 FY '26 Earnings Conference Call. [Operator Instructions] Before we begin, a brief disclaimer. This conference call may contain certain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. The statements are not the guarantees of the future performance and involves risks and uncertainties that are difficult to predict. I now hand over the conference to Mr. Navin Sahadeo from ICICI Securities. Thank you, and over to you.

Thank you, Mark. Good evening, everyone. On behalf of ICICI Securities, I welcome you all to the Q2 FY '26 Earnings Call of Shree Cement Limited. From the management, we have with us Mr. Neeraj Akhoury, Managing Director; Mr. Ashok Bhandari, Senior Adviser; and Mr. Subhash Jajoo, the company's CFO. So without any further ado, I hand over the call to the management for opening comments. Over to you, sir.

[Audio Gap] quarter 2 of FY '26. As you all know, last quarter, the government of India took a significant decision of reducing the GST rate of cement from 28% to 18%, along with various other commodities. We believe this was a very positive and a transformational step and augurs well for cement demand in the long term. The company has fully passed the benefit of GST rationalization to its customers. The company continued with its value over volume strategy during the last quarter. The total cement sales volume, including that of Shree Cement East Private Limited, were up by about 6.8% Y-o-Y on cement basis. With cement and clinker combined, it was slightly lower. Total sales volume increased from 7.6 million tonnes in September '24 to 7.9 million tonnes last quarter. Realization per tonne increased from INR 4,451 per tonne to INR 4,840, mainly due to increase in share of premium products from 15% last year to 21% in September '25 quarter. Total EBITDA accordingly increased from -- by 46% (sic) [ 44% ] from INR 582 crores (sic) [ INR 593 crores ] to INR 851 crores. EBITDA per tonne, and this is a figure adjusted for INR 30 per tonne for onetime impact, also increased sharply by 43% from INR 772 to INR 1,105. On a sequential basis, volumes were down by about 12%, mainly due to heavy rains in North India in the monsoon season. Despite this, the company was able to maintain its realization. However, the total EBITDA at INR 851 crores was down by about 31%. EBITDA per tonne also decreased from by 20% from INR 1,379 to INR 1,105. Very happy to say that the company's UAE operation registered its best ever quarterly performance. Sales were up from 9.87 lakh tonnes to about 13.19 lakh tonnes, showing growth of about 34%. Sales revenue also registered growth of 50% Y-o-Y. And EBITDA increased by 158% from AED 20.34 million to AED 52.53 million. The improved performance is a result of increased realization and improved operational efficiency. The expansion of the unit is progressing well. During last quarter, the company commissioned clinkerization unit of 3.65 million tonnes at Jaitaran, Rajasthan. The cement mill of 3 million tonne is also expected to be commissioned very shortly. The work on integrated project at Kodla, Karnataka of 3 million tonnes is in the final stage of completion and expected to be commissioned in this quarter. The company is continuously exploring various opportunities to grow better than the industry growth or slightly better than industry growth. Recently, the company has also commissioned a 20-megawatt solar power plant in Chitrakoot, UP, one of its subsidiaries. With this, the green -- total green power capacity of the group now stands at 612 megawatts. The company has been rapidly expanding its RMC portfolio with 24 operational RMC plants at present. During the quarter, the company entered East India market by setting up its RMC plant in Raipur, Chhattisgarh. The company also commissioned India's first RMC solar plant at its Jaipur facility. The unit now runs primarily on green, clean renewable solar energy, reducing its carbon footprint and setting up a new standard of eco-friendly construction in India. We are very proud to say that the share of green electricity in total electricity consumption stood at 63% in H1 FY '26, which is the highest to my mind globally, but at least highest in the Indian cement industry. All the company's manufacturing locations are also zero liquid discharge, treating, recycling and reusing 100% of its waste generated from its operations. These efforts have enabled the company to improve its water positivity index to more than 8x. With good monsoon this year, the company expects to further improve its water positivity levels. India's economy continues to demonstrate resilience, underpinned by strong consumption and sustained investment activity. High-frequency indicators point out to a pickup in real GDP growth in the second half of this year, supported by above-normal monsoons. Steady employment conditions, benign inflation and recent rationalization of GST rates are further expected to stimulate demand. These factors are likely to accelerate infrastructure development and growth of housing sector, which bodies well for --- which bodes well for the cement demand. With this, I have with Mr. -- with me, Mr. Ashok Bhandari, Mr. Subhash Jajoo, Mr. K.K. Jain and Mr. S. S. Khandelwal to take you through the Q&A session. Thank you very much, everybody.

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

On cement realization, you mentioned it was INR 4,840 per tonne. Like could -- this excludes other operating income, if I'm not wrong. And could you give a similar number for Q1 as well? I think we lost the call last time.

INR 4,840 is excluding other operating income. The previous quarter, I had explained that because of a glitch in our SAP system, we could not come up with an NCR number. The NCR number this quarter onwards will always be disclosed to everybody, that glitch has been rectified. So we do not have a comparable Q1 number. But roughly, the -- there is a decline -- there is a decline Q-on-Q. Increase increment -- increase, you have already understood. Mr. Akhoury has already addressed it. And I will request Mr. Akhoury to address the second part of the question. Sir, that was on EBITDA volume [Technical Difficulty]

So I just didn't understand your question. So what we have said that the realization per tonne this last quarter was INR 4,840, yes, which has increased from INR 4,451 in same quarter last year.

Sure, sure. And you also mentioned you continue to prioritize realization over volume. Given that we are in the midst of a significant expansion program, what would be then the outlook on the expanded capacities? Can we expect them to kind of have a slow and gradual ramp-up? What would be the outlook on the volumes essentially?

Amit, please understand that there is no entry barriers which anyone can create in the cement market. It is your strategy of value over volume, which restricts you to your dispatches. However, I can assure you, we'll be growing either in line or slightly better in line than the industry.

Sure. And just lastly, on the one-off, you mentioned that adjusted for one-off, what exactly was the one-off?

I am giving it to Mr. Khandelwal, who is Company Secretary. He will explain you what it is.

For our Guntur unit, we had taken connection -- power connection from Andhra Pradesh Transmission Company. And we had to create a substation at our [ CapEx ], which as per the agreement entered into with them was to be transferred by way of a gift deed back to the transmission company. This transaction took place this quarter, and therefore, this write-off.

The next question is from the line of Rahul Gupta from Morgan Stanley.

So just to delve a little deeper into, is there any other one-off in other OpEx? I see there is a strong jump year-on-year on the other OpEx side. So any explanation on that would be great.

I'm giving the line to Mr. K.K. Jain. He will explain you what it is.

As there is no other one-off in the result, the expense is -- current quarter expense is slightly higher because of the repair/maintenance cost and other [indiscernible] cost. Otherwise, there is no one-off in this.

Great. My second question is for Mr. Akhoury. Now that we are getting out of monsoon and festive season, how should one expect demand from here on over the next couple of quarters? And are we seeing any green shoots from GST cut with respect to retail/rural demand picking up?

So a little too early to project demand at this moment. As you know, we're just coming out of festival seasons. As we speak, actually today is Chhath and happy Chhath to everybody. But this Chhath also means that there will be significant labor shortage across construction sites in most of our markets. Let us see how demand pans out. We expect and as everyone that GST cut would boost demand in the long term. We have to wait and watch of its impact in the short to medium, long term. But clearly, GST cut was, as I said earlier, it was a transformational step. And this will -- this augurs well with the cement industry demand projections.

I would like to add, Mr. Gupta that the effect of GST payable on finished houses -- it hurts the low- and middle-income houses more. So the vibrancy in low- and middle-income houses as well as Tier 1 and Tier 2 cities is expected to be far better than what it had been.

No, understood, sir. So my question pertain mainly from the perspective of how should we see the balance between demand and cement pricing over the next few months. So that's what I was looking for.

No, I fully understand your question. As I said, we have to wait and watch to see how the demand pans out. A little too early to say. Given the fact that there has been a GST cut, one would argue that the demand boost should happen. But it may take some more time before actually it is converted into purchase. And that's where I'm saying in long term, it is good for the industry. It is good for everyone that there has been GST cut. We are -- we have to wait and watch for immediately what will happen or in the short term, what will happen. Prices, as I speak for Shree Cement, we have passed on the entire benefits to the consumers of the GST reduction. If you see our results, I think one thing you will notice is that our prices have remained almost similar to last year's same quarter -- to the last quarter, not last year, but this year last quarter and about -- odd about 20% growth -- 19-odd percent growth from last year, yes. I think prices have been stable for us from this year last quarter to the last quarter, quarter 1 to quarter 2. Going forward, it is not for me to forecast prices. It will be wrong. But what I do see that if the demand grows a little better than what we have seen in the first 6 months, then prices should at least remain stable, if nothing else, yes. I'm so sorry, I must repeat myself. Year-on-year, price growth was 9%, not 19%, I'm so sorry.

The next question is from the line of Satyadeep Jain from Ambit Capital.

Just wanted to ask on overall volume and the capacity that you're looking at, especially in North now that you have new volumes from the new line. Just wanted to see how are you going to look at this volume versus value growth. For the last few quarters, the focus has been on premiumization. Should we expect similar focus in new capacity that you have? That's first. And maybe tied to this would be the second question that other players are also looking aggressively at North in general. Typically, if I look at your capacity, it seems incrementally you're also looking at North but also expanding out of North and North is typically 50% of overall capacity. As you look beyond the expansion and in the release, you mentioned 80 million tonne, how would you look at expansions across region with new capacities coming in North, would you look to maintain share and add more capacity in North? Or just the thought process on incremental capacity beyond what you have in plan?

So to answer the first part, as I said in my opening remark that on premium cement, we grew from about 15% to about 21% this year. This has been possible with a very high focus on increasing our share in the premium product segment. Not only that, we have also worked on our general price levels and to make sure that we are able to squeeze our brand equity in a better way. We have -- that has been the strategy, which we have often defined as value over volume. And this strategy is something that we would like to pursue in the coming years as well. On capacity, we have just commissioned, as I said, a new kiln in our North plant. And this quarter itself very soon, you will see us also announcing the cement expansion in the same -- cement mill commissioning at the same location, which will happen very shortly. North remains our focus and North is something that will remain our -- one of the areas where we will continue to evaluate all possible methods to grow in the coming years as well. Having said that, we are going in other regions, be it East, be it South. And that will be on. But our focus on North will never go down is what I would assure everybody.

I have 2 more things to add. One is that if you look at the stand-alone and consolidated results, the EPS differential, which was always around INR 6, INR 7 has gone up to INR 33 in favor of consolidated, which clearly points out that our UAE operations are doing far better. Mr. Akhoury had already pointed this out in his opening statement. And we are expanding our capacity there as there has been very healthy price rise in UAE market. Also, you will note that we generally have been very conservative in our dividend payout. But this year, we have given highest interim payout -- interim dividend of INR 80. And we expect to have an incremental dividend payout, but there are various factors affecting this. Everybody had questioned us on the rationale of carrying such cash large reserves. So -- and some chief investment officers had asked for higher dividend payout, and we have acceded to that.

Just -- so one clarification question on both dividend and depreciation. So generally, depreciation has been very volatile. What drives that volatility...

This year, we will be depreciating about INR 2,800 crore or so, which is based on the capitalization schedule. We have already charged about INR 1,100 crore in 2 quarters. So the depreciation for the next 2 quarters will be about INR 1,700 crores. And that's all right because as everybody is expecting, so we are that the prices should remain stable, and the demand should return. So there will be no hassle in availability of distributable profit in any case for the year.

So the next question is from the line of Pinakin from...

Excuse me. One second, I stand corrected. The depreciation for the year will be INR 2,450 crores, not INR 2,850 crores, I'm sorry.

The next question is from the line of Pinakin from HSBC.

Sir, for my first question is that among your 3 core markets of North, South and East, how is pricing today on the ground versus the second quarter average? Is it lower? Or is it flat?

Are you talking about the last quarter?

No, sir. Today, yes, today's prices versus the second quarter, the September quarter that went by.

No. So as I said that the prices have been reduced, but that is largely because -- that is only because we have passed on the GST to the consumers, yes, to that -- from 28% to 18%. So the prices are lower than what it were in the pre-22nd September time.

So the net realizations to the company would broadly be unchanged today versus what was -- what you have seen in the second quarter?

No, I would say it will be slightly lower because of all the festivals and all, the demand has not been very robust in October. And therefore, we see some slippage of prices happening across India, not only in regions, yes.

Got it. Sir, my second question is that, again, if you were to look at your 3 core markets and over the next 2 quarters, do you see any one region demand outlook to be materially better than the other between North, South and East?

I would -- again, when you talk about demand forecast, I always keep quiet because we have to be cautious in this statement. As we speak, we have seen demand growth almost similar across the country, yes, almost similar, except some states where it has been lower and some states has been higher. Not to compare region-wise, but maybe state-wise, one can do some comparisons. Going forward also, I think this trend should continue. Only I expect -- I would expect North and West to be slightly better than rest of the country.

Got it, sir. And sir, my last question is, again, if you look at your competitors' capacity expansion announcement, particularly in Northern India, which is very large, and you highlighted that North is a core market for Shree, should we expect Shree to defend its capacity share and hence, now at some point of time, announce capacity expansion to maintain its current share?

Well, this is a trick question, isn't it? This is a trick question. We have said that we'll be growing marginally better than the industry. Now which region, what region, what kind of growth, how do you all forecast this? We have to be prepared. We are having sufficient physical resources to set up capacity in most of the areas where we operate. And we'll take a call as the demand scenario becomes more clearer. [Technical Difficulty] Is the moderator there, please?

Yes. Can you hear me, sir?

Yes, yes. That's fine.

No. I think we have lost Mark. I can't hear him. I'll just dial him back, one second.

The next question comes from the line of Kunal Shah from DAM Capital.

Now since the time you have undertaken the measures to improve the brand positioning and the premium sales, on a portfolio level, how much would have the base realization improved on a per tonne basis? And what would be the milestone here along with any time lines, if you can help?

When we look for the numbers, as the milestone remains that we have already reached about 20%, 21% of premium sales, this is a level at which we would like to maintain in the coming quarters as well, yes. If there are some improvements, that will be welcome. But milestone was to reach about 18%. We have already reached 20%, 21%, up from 15%. And we would be -- we will be focusing a lot that we are able to maintain this same level of premium share of our trade volumes in the coming quarters as well, yes. Can you answer the first question?

Kunal, Bhandari here. Can you repeat the second part of the question?

First question.

No, sir. So one was the premium sales, which is very clearly visible. But also there have been steps to improve the brand positioning as well, right, the base brand positioning. So all I'm trying to understand is since the time you have taken these measures, how much would the base realization moved up, let's say, keeping other things aside, I mean, status quo, how much would have the base realization improved?

Kunal, that is the point I'm trying to make. Mr. Akhoury in his opening statement had said, we have improved 9% year-on-year. It is unfortunate that I could not give you NCR number for Q1. But Q2 or H2 -- sorry, H1 vis-a-vis last year H1, 9% incremental price is there, which is a mix of various things. And it is -- you see, please understand my dear friend that if we are saying that we will focus and we have reached 21% of premium sales, then the price trajectory should be upwards or stable. But then demand and pricing in commodity, it is very difficult for any company to address, isn't it?

Understood. No, that helps. And secondly, sir, on the cost savings, especially on the logistics front, now where exactly are we in the journey and -- because we were planning to aggressively increase the rail share. So could you just reiterate our positioning here and [ what is ] the quantum of...

So just to reiterate on our last question before I come to the second -- this question. So as I said, we have increased by 9.8%. I believe some of the players who have announced the realization Y-o-Y, if you see the gap of our performance versus peers, you can get a sense of how much we have improved. That is part number one. On the rail, very focused work is going on. We have, as you know, already commissioned our Purulia railway siding in our Purulia unit. We are doing siding in Kodla, for which the project work -- land acquisition has been done and now the construction process has started. Similarly for Etah, we have completed the land acquisition and project work has started. So a lot of focus has been there to improve our rail connectivity across India. And you'll see that very soon, some of them will be commissioned.

Sir, this is very helpful. Sir, just to extend it, like in FY '25, what would be the rail mix exactly? What are we going towards? And what would be the savings if that -- that would be very helpful.

So presently, we are at about 11%, yes, of rail share in our total outbound logistics, yes. And we think we should reach about 20% in the coming time, yes. If I see at savings, typically, on the PTPK, railway -- rail is about 1.8%, 1.9% versus road at about 2.3%, 2.5%. If I look at the industry across, yes, especially in the North region. So one would expect that at least INR 100 crores -- INR 100 per tonne savings should come from our increased focus on railway operations.

Got it. And sir, if I could just squeeze in one more. I think there was a lot of efforts towards the AFR share as well, right? So INR 100 on the logistics front. And anything on the AFR front because I believe that share is also on the lower side, right? I mean there's a lot of scope over there.

Yes. As I said, a lot of project work is happening across on the AFR side as well. We are -- we have to -- we are now at about 2.3%, up from 1.5% same quarter last year, yes. This is on AFR usage, yes. And more and more facilities are getting created. As they roll out in the coming years, you will see we will also go up on our AFR consumption.

Got it. And sir, if I can just squeeze one more. Just from a capital allocation perspective, what should be the CapEx number for '26, '27 and '28?

'26, '27, roughly, you estimate INR [indiscernible] crores. And '27, '28, we have not -- we have a broad CapEx in mind, but it should be in line with this much only. It may spill slightly to '28, '29 because we are rethinking our commissioning strategy. But I can assure you that we will maintain our spirit out growing marginally higher than the industry growth rate.

Yes.

Just to clarify, sir, 80 million tonnes could get spilled to 29 million tonnes, you mean?

I cannot -- see, please understand, it's not that we are devoid of any physical resource. It is basically how the capacity utilization of the company gets ramped up and how the demand gets ramped up. So it is dependent on that. We are taking a stand that if needs be, 80 million tonnes can shift to -- 80 million tonnes by '28 may shift to 80 million tonnes by '29. But then as the time passes, we'll keep on updating you.

The next question is from the line of Shravan Shah from Dolat Capital.

Sir, just to check, so now currently, we have 62.8 million tonne and 6 million tonne, both Jaitaran and Kodla will be added in this quarter. So we will be 68.8 million tonne. And from there, by FY '27 and '28, will there be any capacity addition because 3 million tonne Jaitaran was postponed now.

Wait a minute, Wait a minute. You're asking too many questions. Let us address one at a time. 66.8 million tonne or 67 million tonne March '26 is given. We have given you a CapEx guidance of about INR 3,000 crores. So we should be about 72 million tonne to 75 million tonne March '27. I have already told you that let us see how the demand and how capacity utilization moves to see whether we need to become 80 million tonne by '28 or '29. You have seen our balance sheet. You understand we have all physical and financial resources to do this CapEx, but the market also has to -- the market conditions are to be recognized in planning exact dates. So let's -- Yes, go ahead.

Got it, sir. And then this 2028 or 2029 when we say, is this a calendar year or FY '28 or FY '29?

Yes, FY. We are not talking calendar year. We're talking FY...

Got it. Sir, I need a couple of data points. So even last quarter, we did not have a call. So if you can share the data points for Q1 and Q2. So starting with, first is trade [ share ]...

One second [indiscernible] Dolat Capital. Let Mr. Subhash Jajoo take you through all the numbers because he is the CFO of the company. You can ask all your questions and pointed questions to him.

Yes. Sir, trade [ share, blended cement share ] for Q1 and Q2?

Yes. So for trade sale, it was 70% in September '25. And in June, it was around 71%. Blended cement was -- cement sale was 68% in September and 70% in June.

Okay. And lead distance in Q2 and Q1?

In Q2, it is 441 kilometers and Q1, it was 451 kilometers.

Okay. Got it. And kCal for Q2 and Q1?

For Q2, it is 1.66. And Q1, it is 1.59.

Okay. So, it has decently gone up from -- even from March level. So given the current -- whatever the petcoke prices and the coal prices, do we see any further increase in this kCal cost?

No. As per our inventory pipeline, I think it should be around similar levels, maybe slightly lower than this.

Okay. Okay. And in terms of the fuel mix, broadly, the petcoke and coal would be a 90-odd-percent, 95%?

No, no. This quarter, it is like around 66%, it is petcoke and balance is coal and other alternate material.

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

My first question is, Mr. Akhoury made a comment saying that in addition to premiumization, you're also focusing on pricing to be able to extract the best value for your brand. Could you just elaborate on that, please?

Well, look, Raashi, let us address that. Only 21% is premium now. In our sales rates, Mr. Akhoury has clearly said only 21%. But if you look at the incremental price rises, it must be incremental plus general category also. You get my point? So overall, there is a price buoyancy. Now how it will pan out is completely dependent on market conditions. But the delta between peer groups, we have certainly -- we are certainly trying to converge on the top line or rather price.

Right. So how are you trying to do that?

Mr. Akhoury will answer that, please.

Sure, Ashok. So in a sense, this market, as you know, the industry, market, there are -- for same kind of product, there is a price ladder, which is not less than INR 15 to INR 20 or even higher. And this is what we call the price gap between brand A and brand B. Through our pricing actions as well as distribution actions, we are trying to reduce this gap. And that is one effort that has worked for us in the last 6 months odd. And that is where we said that we will focus on value over volume. In addition to that, we have also focused on premium products, which are higher priced than the base product. And they have -- their positioning in the market is on the very -- on the higher side. And that -- so these 2 combined, so for base brands as well as for premium, there has been a focus of reducing the gap with some of the peer group companies. And that has helped us to record a 9% price growth last quarter versus -- I am not so sure I have seen the figures of others, but whatever figures the others have, if you could look at it, then I think Shree's performance on price growth will be slightly better than what industry has seen.

Understood. That's helpful. Then on the volume side, for the first half now your volumes are down about 2% on a year-on-year basis, total volume, cement plus clinker. So what is your projection for the year for yourself?

We should do about 37 million tonnes to 38 million tonnes this year.

Okay. And on the power side, so green power, I would imagine that in this quarter, your green power proportion has gone down to about 60-odd percent or so. I mean for the first half [indiscernible].

60%, yes. [indiscernible].

So what is it for the quarter?

Raashi, you are forgetting renewable also consists of solar and this was monsoon period.

Okay. So 60% is the correct number, right?

Yes, 60% for the quarter is the correct number.

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

My first question is on your UAE plans. Can you elaborate on what the expansion plans there and overall outlook, as you said, it is like very positive.

So Prateek, UAE demand has been quite robust, quite healthy in the last 1 year, if not a little more than that, yes. We are -- our assets in UAE are very well positioned to serve all parts of the country, including the main consumer centers of Dubai and Ras Al Khaimah. We are -- our numbers have shown that we are doing very well. And hence, we have decided to put a new mill there of 3 million tonne capacity. We have extra clinkers. So in UAE, we used to sell clinker earlier. We now believe since the cement demand is very robust, we can convert that clinker into cement and sell it in the domestic market. In addition, in UAE, we also produce some special cement products like oil well cement. And oil well cement from our facilities goes across the world, not only in Middle East, but also in some markets of Europe and some markets of U.S., North America. We are also doing debottlenecking of our kiln there. That will give us about 0.5 million tonne of additional production of clinker. So overall, we are very positive on UAE market and as well as the Middle East market where we sell not only the base product, but also the special products like slag and oil well cement. And hence, this capacity expansion program has been announced.

And what is the full quantum of CapEx if you're looking at probably part of consolidated operations and not stand-alone CapEx?

AED 110 million...

AED 110 million approximately of CapEx in UAE.

By the way, I must point out that it is fully funded by UAE by cash available at UAE.

Yes. It is fully funded by cash available at UAE, yes.

And other question is on like this quarterly EBITDA per tonne of INR 1,100, then like with very minimal visibility on price improvement in third quarter. How are we looking at like our EBITDA per tonne of INR 1,300 to INR 1,400 which you used to sort of expect earlier?

Prateek, this question you ask me every quarter and every quarter, I humbly suggest that it is impossible for the hands of any commodity supplier or manufacturer to predict the price. Price is not in our control, my dear friend. Market forces decide the price. So when will my EBITDA go up at INR 1,300 or INR 1,400, I'm not in a position to answer, Prateek. Please appreciate that. Any incremental price rise is a straight flow to my bottom line. Now how much incremental price rise will come, when it will come, how much volume will come, these are not -- these are affected by various macro factors. What is -- you are looking at INR 1,300, why not INR 1,800? Let us understand. Let us be realistic. We have said we have done INR 1,100. Mr. Akhoury has clearly said that he does not -- he expects some demand vibrancy. He expects stable to -- a stable pricing scenario. So at worst, we will do INR 1,100. At best, we can do INR 1,200. I don't know that. I'm not saying everything. Maybe we can do INR 1,300 as well. But you will have to have patience, my dear friend. People have been claiming all kind of EBITDA numbers never delivered. We don't promise anything. We deliver and then we say.

The next question is from the line of Satyadeep Jain from Ambit Capital.

Just a couple of questions. First, on the dividend. We appreciate just the thought process that there is spare cash and some of it can be given out as dividend. But still, if you look at dividend yield still even after dividend, interim dividend, looks like 0.4% odd. What is the...

Yes, go ahead. Go ahead, please.

What is the need for having such a lot of dry powder still on the balance sheet, given the CapEx and all you're looking at for the next 2, 3 years, why not look at onetime dividend, special dividend? Just the thought process on keeping so much spare cash on balance sheet.

My dear friend, on our strategy of keeping spare cash, please talk within your firm with Nitin Bhasin. We have explained to him many times why this cash is needed. And the other point that why not onetime [Foreign Language] we'll address it.

And second would be on the growth that you're outlining, you're talking about growing in line with the industry. And that I'm guessing maybe slightly higher than industry that maybe looks at volume growth? So what -- and also capacity utilization, what -- is there any capacity utilization number that you typically look at...

Is there any demand number you can tell me? Can you tell me what is your expectation of demand growth? And what is the basis of that expectation? [Foreign Language] we will not look shy upon. We will be doing either equal or better. [Foreign Language].

The next question is from the line of Amit Murarka from Axis Capital.

So just again, some data questions actually. So what would have been the other operating income in the quarter, if you can share that?

Other operating income? Do you have that here?

Amit, you can send us a mail, and then we'll reply on that because right now, that data is not available.

Sure, sure. And also you mentioned cement growth of 6.8%, but what would be with clinker, if you can give the total volume basically for the quarter?

Yes. I think you missed the first part of the opening remarks where we have given the volume, it is 7.9%. So the total growth will be around 4.6%, 4.7%.

Around 5%...

The 5% is cement and clinker both, 6.8% was cement [ only ].

For cement only.

The next question is from the line of Rajesh Ravi from HDFC Securities.

My first question, you mentioned on the premiumization benefit which you have accrued, which I can read in the numbers given that Q2, you have delivered around 9% NSR growth, while most of the other companies have delivered 5% to 7%. I believe for H1 also, you mentioned 9% was realization growth? Am I audible?

Can you ask the question again, please?

You mentioned the cement realization that your like-to-like cement realization growth is 9% for Q2, right, year-on-year?

It's INR 4,854 over INR 4,409.

Which comes to around 8.7% or 9%?

9%, yes.

So for H1 also, the growth is similar around 9%?

For H1 also, yes, it's similar at about 9%, yes.

Okay. So if I work backward, so your cement realization on a Q-on-Q basis would have come down by around 1%, 1.5%...

It is flat actually.

It is flat. Okay. It is flattish. Now on the UAE business, you gave the volume numbers for Q2. Could you share the Q1 number also and the Y-o-Y number for UAE this year Q1 and last year. And also a request, can we -- now that UAE is also delivering performance in line with the domestic operations, 20%-plus margins, can we look at the company at a consol level rather than looking the 2 units separately?

Indeed, you should. That is what the idea is. That is why I pointedly gave the cash EPS number. So now onwards, maybe a consolidated result for valuation may be more authentic [indiscernible] than doing stand-alones...

So Q1, what was the volume number?

You take the numbers from Mr. Akhoury. He is prepared with the actual volume numbers.

So last year same quarter, UAE was at 9.87 lakh tonnes. And this year, it has been 13 lakh tonnes, 13.19 lakh tonnes.

That is Q2, right?

That is Q2. September [indiscernible] '25 was 10.09 lakh tonnes.

Sorry, [ I missed it ].

So June '25 was 10.09 lakh tonnes. September '24 was 9.87 lakh tonnes and September '25 is 13.19 lakh tonnes.

Okay. And June '24 also, would you have handy?

No, that I don't have. I'm so sorry.

You can send us a mail, we will reply...

Sure, sir. We'll get in touch. Great.

The next question is from the line of Sumangal from Kotak Securities.

Sir, first question on the volumes. If you look at 1H, there's a decline of 2-odd percent. Just want to understand either industry-wide or in our core markets, what would have been the market/industry growth? And just trying to understand what is the market share loss, which we've seen.

So I would not have the H1 number for industry, but quarter 2, the best estimates coming is around 3% to 5% cement demand growth, yes. Versus that 3% to 5%, we have done slightly better at 6.8% on cement sales, yes. The first quarter was when we were very firmly trying to establish our value positioning in the market. And therefore, you saw a lower-than-expected growth. But second, last quarter, I believe, and the best information that I have of market growth versus 3.5% of industry growth, we are slightly ahead on our performance.

Let me just also make one point very clear to you on our value proposition. Consol numbers of INR 914 have been reported vis-a-vis our stand-alone number of INR 1,105. If you compare it with standalone, it is INR 966 to INR 1,105. So the delta, which was there in Q1 of INR 137 a tonne in EBITDA has been slightly better, I think, by INR 2 or something.

Understood. So sir, should we understand it this way that if you look at even FY '25, our volumes are flattish, 1Q also, we would have -- I mean, appears that we would have lost market share. And from 2Q now, we are maintaining and gaining. So now since our value provision is now established and even for future when a lot of capacities are coming up and you guided that we will be maintaining share and even gaining to some extent, now there is a subtle change in strategy, is this is the right way to kind of look at...

No. Wait a minute, wait a minute. We have not said that we will not remain focused on value. We expect additional demand to come in because of all the fiscal measures announced by the government of India, and that should keep us in line or better than the industry, depending on the geographical reach, number one. Number two, you also please appreciate that the value over volume proposition, you do a very simple calculation. You do the capacity utilization of all cement plants and plot EBITDA per tonne of all cement plants, you will see -- what do we say? The inverse correlation. Have a look at that.

I'd like to reinforce that there is no change in the strategy. This is what we would like to keep reinforcing here. So it is value over volume. Having said that, and you have seen that in the results when we say 9% realization growth over last year, and then you should compare it with the industry numbers, and I'm sure you will find that we have not done badly. At the same time, while delivering 9% realization growth, we have also delivered 6.8% volume growth. It only means that the strategy is -- has started working. How does the future pan out is difficult to say at this point of time, and that is how I would see it.

Clear. Very clear. Sir, on RMC business, it looks like there's a lot of focus here. If you can just share what is the outlook in next 3, 4 years? What sort of targets are we looking at in terms of number of plants, maybe revenue contribution, et cetera?

No. So RMC is a new business for us. We've just started a year back, yes. Already about 24 plants are operational. I think this is one of the fastest ramp-up of RMC business in this industry. We had an initial goal of going up to 40 plants in -- by FY '28 and that continues even today. We will -- we are trying to put up more plants in '26. I'm so sorry, not '28, '26, yes. Having said that, it is also a time for us to better understand the appropriate levers, the revenue levers for this business and make it more prepared so that we can have a playbook of RMC business, and we can, therefore, thereafter, keep putting new plants at a better performance level. That is how I would see it, yes.

Ladies and gentlemen, we will take that as the last question for the day. I now hand over the conference over to the management for the closing comments.

Thank you, everybody. Thank you for participating, and thank you for supporting Shree. As we -- as I said, we will continue to remain focused on delivering a better performance. Our strategy is working, and we hope we should continue to give you better than industry performance, at least on EBITDA in the coming years as well. This is our focus, and this is how we would like to perform. Thank you very much again, everybody. Happy Diwali.

Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.