Shree Cement Limited ($SHREECEM)

Ladies and gentlemen, good day and welcome to Shree Cement Limited, hosted by ICICI Securities Limited. This conference call may contain forward-looking statements about the company, which are based on the be opinion and expectation of the company as on date of this call. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Navin Sahadeo from ICICI Securities. Thank you, and over to you, sir.

Thank you, Danish. Good evening, everyone. On behalf of ICICI Securities, I welcome you all to the Q4 FY '26 earnings call of S Cement Limited. From the management, we have with us Mr. Neeraj Akhoury, Managing Director; Mr. Ashok Bhandari, Senior Adviser; and Mr. Subhash Jajoo, company CFO. So without any further ado, I hand over the floor to the management for their opening comments. Over to you, sir.

Thank you. Thank you, Navin. Good afternoon, and good evening, ladies and gentlemen. I welcome you to the earnings call of Sri Cement Limited for the quarter and year ending March 26. So 2025, '26 was a good year for us despite the challenges posed during the Middle East in March. In March '26 quarter, on a sequential basis, domestic cement sales volume increased by about 25% from 8.48 million tonnes in December '25 to 10.56 million tonnes in March '25, while year-on-year growth was at 11%. Total volume, including clinker sales also jumped from -- by about 9.4% from 9.84 million tonnes to 10.77 million tonnes, while increasing 23.2% on a quarter-on-quarter basis. Realizations were at INR 4,725 as against INR 4,652 in December '25, registering an increase of 1.6% during the quarter. Operating EBITDA also increased by 34% from INR 902 crores to INR 1,212 crores. EBITDA per tonne increased from INR 1,032 to INR 1,125 in March '26. Capacity utilization during the quarter stood at 66% as compared to 56% during December 2025. For the full year, sales volume, including Shri Cement East, increased by 2.2% from 35.6 million tonnes to 36.4 million tonnes. Our strategy, which we took for the full year helped in increasing our realization from INR 4,569 per tonne last year to INR 4,732 per tonne in 2025-'26, registering an increase of 3.6%. Total operating EBITDA increased by 11% from INR 3,814 crores to INR 422 crores, excluding a onetime impact of INR 80 crores. EBITDA per tonne stood at INR 1,161 as against INR 1,071 last year. Our other company, Union Cement performance has also improved significantly during the year '25-'26 on back of robust demand and continuously improving pricing scenario. Sales volume were up by 18% from 38.61 lakh tonnes to 245.65 lakh tonnes. Revenue was up by 39% during the year from [indiscernible] to $870 million. Since last 2 months, due to the tension premining in the Middle East, sales have slowed down, but we cease fire situation is gradually coming back to normal. We believe once piece is restored, demand would bounce back due to the reconstruction work. The unit event continued with its impressive quarterly performance. Total volume increased from -- on a yearly basis from 10.72 lakh tonnes to 11.65 lakh tons, recording a growth of 9% on on quarter-on-quarter basis. Sales revenue was up by 18% from 210 million to 47 million on a quarterly basis. During the quarter, the company commissioned is an integrated project of 3.65 million tonnes clinker capacity and 3.5 million tonne cement capacity at Kodak and Natia. With this, the company's installed cement production capacity in India, including its wholly owned subsidiaries, increased to 69.3 million tonnes standing its position as India's third largest cement group. The work on setting up a cement mill of 2.5 million tonnes in Union cement UAE is progressing well. and is scheduled to be commissioned by September 26. To further expand our capacity, the company is setting up an integrated cement plant with clinkers capacity of 0.95 million tonnes and cement capacity of on 90 million tonnes in the state of Mehalla. During the quarter, company also incorporated a wholly owned subsidiary with a purpose to establish and operate cement blending storage and packing facilities in Mauricio. The company continues to actively and strategically pursue multiple expansion opportunities currently at various stages of pre-project development, to accelerate capacity buildup and firmly positioned to achieve its growth milestones. The company is rapidly expanding its RMC business with 26 operational plants at the end of '25, '26, during the month of March 26, company has inaugurated 10 new RMC plants, which are currently under commissioning. With the commissioning of these plans, the total RMC plant count will increase 36 plus significantly strengthening the company's operational footprint at the start of financial year '27. The company continues to focus on sustainability initiatives. Key highlights of the same are as follows: The company's share of green exit total elect consumption stood at 61% in Q4 '26, up from 59% 2 including its wholly owned subsidiaries in India, is one of the highest in India and most probably global cement industry. The company is consistently ramping up its green power generation capacity, which currently stands at 6.5 megawatts, including in its wholly owned subsidiaries in India. All the company's manufacturing locations are 0 liquid discharge treating, recycling and reusing 100% of wastewater generated from its operations. These efforts aided by a good rainfall have enabled the company to maintain is water positivity indexed to more than 8x in '25, '26. The company continues to get AAA rated by leading rating agencies of India. Last year, we also got our long-term foreign currency rating done by Care Edge Global the rating given was BBB+, which is stable. Considering the strong cash position, the Board of Directors of the company have recommended a final dividend of INR 7 per share. In addition to the interim dividend of INR 80 per share for the year '25, '26 declared in October 25. Total dividend for the year stands at INR 150 per share, representing a 36% increase over the $110 per share dividend paid in '24, '25. The final dividend shall be subject to approval of members of the next -- in the next Annual General meeting. India's Macroeconomic environment remains resilient, supported by steady domestic demand and continued policy focus on infrastructure-led growth. Union Budget '26, '27 has reinforced this momentum through a sustained thrust on public capital expenditure with investment in roads, railways and urban infrastructure expected to drive construction activity and cement demand. Favorable employment conditions, stable inflation, and supportive fiscal and GST rationalization measures further strengthen sectors fundamentals. Against this backdrop, the cement industry remains well positioned to benefit from healthy demand growth in the medium term. However, the geopolitical conflict in Middle East and forecast of moderate monsoon conditions may act as headwinds for the sector and may impact its growth momentum in the short term. With this, I will now open the floor for the Q&A. I have with me Mr. Ashok Bhandari, Mr. Subhash Jajoo, Mr. K.K. Jain and Mr. Khandelwal to take you through the Q&A session. Thank you, everybody. And again, a warm welcome to Shree Cement quarter 4 webcast.

[Operator Instructions].

Navin, before we start Q&A, can I make a point please. Good evening, everybody. I would like you to recall 2 specific public communication we had made. One was at the end of June 25 quarter -- when Mr. Bangar had gone on television saying that he expects the growth for Shree Cement in last financial year, between 2% to 3%, we have delivered 2.2% -- the second attention I would like to draw is towards the last quarter's con call, where unfortunately, Mr. Acure could not attend, where I had said that we have moved to a more stable pricing platform narrowing the gap between the top most player and us by almost INR 20 a bag, INR 150 to INR 20 a band. And now we will be chasing volumes. We have delivered on both these accounts, which explains our ethos of delivery and not proclamation. Now I open the floor for any questions you have.

[Operator Instructions] The first question comes from the line of Rajesh Ravi from HDFC Securities.

Congrats on strong volumes and healthy margin performance continued margin performance. Sir, my question pertains to what makes in terms of CapEx and the last cash surplus, which is further increasing to a strong internal accrual generation.

Okay. Ravi, Bhandari here. As far as the is concerned, as on date, as Mr. Akhoury has already informed you, we are pursuing 3 distinct places. One is we will be increasing our RMC plants during 2627 -- number two, we are nestle working on railway sidings and number three, the [indiscernible] expansion for which orders have already been placed. However, the total CapEx estimation for the year 2027 is approximately INR 1,500 crores and it should take its own course. We expect to close the year with about 50 to 55 RMC plants, railway sidings, and preliminary work on mega ice.

Okay. And any thought on your long-term next 2, 3-year expansion plan, because Meghalaya be a smaller CapEx.

Look by dear friend. We are on record saying that we should reach 80 million tonnes by 2029. But then please understand it's a dynamic situation. We have slowed down the CapEx because the -- even in the last con call of 1 of our competitors, they have also slowed their aggression. So we will ride the wave as it is. We intend to reach 50 million tonne by '29, but let us see.

Yes. Understood. Sir agree. And on the cash surplus, we have increased the dividend per share that is a good news. But anything further because we are now close to INR 9,000 crores or surplus cash.

No, no, no. We have 6,700 Yes, INR 8,400 crores, roughly. You are correct. We will keep on finding the ways to reward the shareholders as well as if the situation improves, we can expedite our capital expenditure program by front-ending it, you will appreciate that in the last 15 years or so, we have not borrowed. We have generally funded all our CapEx through our internal accruals and we intend to do the same.

Understood. And second, on the -- if I look at control mines stand-alone, just for clarification, would that give the unit performance just would also include your subsidiaries' performance console- minus standalone EBITDA.

Now listen, control has 2 components. One is Shree Cement East Limited and one is UCC at Union, which is Union Cement and UAE. Now Shree Cement East Limited will be the engine for further capacity expansion in India. And UCC, as Mr. Cory has already pointed out, is on track. To add another 3 million tonnes of capacity by September '26. And I think it should keep in good stead.

Great. Sir, given that our growth engine will be the instant subsidiary, should we not really in the company at a console level rather than a stand-alone level?

Indeed, I take your point. And we had been looking at this possibility, maybe next quarter onwards, we will talk of control only.

Understood, sir. I'll come back in queue. Meanwhile, you may say the operating numbers, as you only share it.

Our next question comes from the line of Harish Mittal from Emkay Global Financial Service.

My first question pertains to the freight cost, which PS2 have increased by INR 80 per tonne kind of a number on both Y-o-Y and a sequential basis. Any reason for the same, sir?

No. What has happened here is that the lead distance has increased by about 12 kilometers over last quarter. we are seized of the fact and we are working towards reducing this and maybe bring it back to sub 440-kilometer tonnes. And you see, basically, it is completely dependent on the demand supply scenario of each region. So we are working on it, and we should be able to bring it under our control.

My second question is that in the last con call, we mentioned about the depreciate guidance of around INR 1,600 crores to INR 1700 crores. So are we sticking to the same number for FY '27 -- or you said some upward revisions.

Yes. We are seeking to that.

Next question comes from the line of Amit Murarka from Axis Capital.

On the strong volume growth delivery in Q4, which is like 11% Y-o-Y on cement level is what I see. So going ahead, how do we see it like full year is obviously to, but Q4 is pretty high. So going ahead, like should we expect a full year run rate to also now be at similar levels?

Basically, the guidance we have been maintaining is 1% over the average industry growth rate. However, we expect to reach about 40 million tonnes in this year. '27, we should be around 40 million tonnes. But of course, there are a lot of macroeconomic factors which are beyond our control. But hopefully, this will do well.

So just to clarify, ocean, including clinker or only cement?

Look, my dear friend. Clinker is not our choice. We would not love to -- we will not like to sell clinker because we are losing the value-add opportunity. Clinker is basically for various small or reasons, it's not a meaningful volume at all. So please do not look at clinker volumes at all. Look at cement is what I am saying is maybe including 200,000, 300,000 tonnes of clinker. Otherwise, it should be cement only.

Sure. Sure. Understood. And generally on this West Asia crisis, while we know that there is cost inflation that everyone is facing. What are the mitigation measures? And I believe now coal probably cheaper than pet coke. So are you switching into coal more than pet coke? What are the mitigation measures basically?

My dear friend, it's a dynamic exercise for us. We keep on evaluating the techno commercial viability of various kind of fuel mix. And as on date, yes, you are right, con is becoming cheaper than pet coke. But then petcoke prices also cooled down by more than $10 a tonne. So we are not concerned with what fuel we are using, we are concerned with landed cost per kilo country on air dried basis at our plant. So we are constantly on that. Indeed, yes, the fuel cost, which is standing at about INR 1.60 paisa per kilo calorie as on date, will move up maybe by 10% or something for next -- this quarter. But then, yes, we are -- this is our business to keep on intersustainability and profitability. You may also note that in spite of whatever results whosoever has declared, our EBITDA per ton of cement for the year, '25, '26 is by far the highest in the peer group.

Right. Congratulations on that. And just lastly, if I may, could you provide region-wise capacity utilizations for you?

Look, my dear friend, all these details, I'm now asking Mr. Jajoo and Mr. K. Jain to fill you up with these details. I don't have these details in front of me, they must be having it. Mr. Jajoo can you answer please?

Yes. For the full -- for this quarter, for North is 70%. For East, it is 60% for South, it is 61% as a company as a whole, the utilization is 66%. As compared to December, the number was 56% for the company as a whole. So from 56%, we have increased to 66%.

Our next question comes from the line of Siddharth Mehrotra from Kotak Securities.

With your compressor also sort of going slow on expansion. Do you think there's a chance that demand might be sort of impacted in the oncoming years. What are your thoughts on demand specifically for the next year.

Let us understand my friend. Before the new series of GDP came into play, the demand was 1.3x the GDP growth rate. Now once the GDP cities go, the constance of GDP got reconstruted, the demand has come to around 1 to 1.1x DGBgrowth rate. Now there are the bedrock of growth, economic growth is still in cement. If India needs to grow at 7%, steel and cement should go at least in tandem with that, if not more. We expect this year, 6.5% to be the GDP growth rate, so we should do about 7.1%, 7.2% cement demand growth, right. And as I've said, that should be the industry we should grow at about 8% to 8.5%, but you can never say. So let us see how the GDP moves.

Just another question, sir, we've seen a fair amount of cost inflation, as you rightly pointed out. So I just wanted to what are the prices looking like this quarter? Have we been able to mostly pass those on to the customers? Or do you think we need more price next...

No, no. Listen, the fundamental principle of any business is [Foreign Language]. So let us be very clear that whatever we can pass on, on a sustainable basis to the market, -- after absorbing our cost push, we should be all right. It may -- we will aim to increase the profitability, let us see how it pans out. And in any case, if the war in Middle East gets over in the next 2 months, the fuel prices are bound to come down. So it is a completely dynamic situation as on date.

Got it. Sir, any chance you could provide us some color on the hike which has been taken, so for example, in the past month or so?

About INR 25 a bag.

And this is across regions or?

I don't have that kind of breakup. But South is okay. And you can, of course, ask Mr. Kamlesh Jain or Mr. Jajoo to send you our main separately on this.

Got it, sir. Just one last bookkeeping question. The sales figure that you've mentioned, that includes volume sales from our wholly owned subsidiary as well?

Subsidiaries only in India. Shree Cement.

Yes. Yes, correct.

It does. It does.

11% is the sales from the Indian operations.

Okay. So that 10.77 number is including Shree Cement.

Our next question comes from the line of Pinakin from HSBC Bank.

My first book keeping question is that what is the net cash balance as of March '26?

We are at about INR 6,400 6,700 crores in investments and INR 1,700 crores of cash. Cash in bank. Yes.

Got it. My second question is, sir, on capacity expansion. So 69 million tonnes capacity as of March 26, and overall annual full year utilization would be in -- now that 8 million tonne target by F '29, given the utilization levels that are there, can we expect this to get pushed out by a couple of years?

I can't say it's too early to comment. -- we have slowed down. I have given a guidance of INR 1,500 crores only for CapEx in this year. Let us see how the situation plays.

Got it. And sir, this value over volume and now we are focusing on volumes -- so is it fair to say that between volumes and price and EBITDA margins, while you are chasing volumes, EBITDA per tonne is also something you will keep on focusing on and not let it go down much.

Look my dear friend, let us understand Q2 and Q3 of last financial year, we suffered to pull up our prices. We did not aggressively sell -- and once the prices have established to a level where the delta between the top players and us has reduced significantly, we don't intend to give up that advantage. We would like to have now our fair and proper market share. That doesn't mean we'll go into a price war in push volumes. Profitability is the prime focus volume and price always the market gives volume is what we can -- we are capable to produce. This is the situation. Now, how it will put pressure on EBITDA. We have never gained our history, given any guidance on EBITDA per ton -- we have never given you any guidance on sales price per tonne because it is not in control of any commodity manufacture leverage cement. It is a completely macro driven equation. And we would not like to ages. We can say what our costs are. We can say what our aspirational volumes are and balance whatever will happen to everybody will happen to our first.

Our next question comes from the line of Ritesh Shah from Investec.

Sir, a couple of questions. First is if you could, sir, put some details on the Northeast expansion, specifically around limestone sourcing, if we have on a mine, what is the auction premium that they have, what we have paid? And any indicative time lines on the expansion that we have indicated.

We have gone by the laws of local government in Meghalaya, the state laws, where the state government allocates the mice. -- what we have got is 3 blocks, each block, we have not completed all the 3 blocks. But the first block where we have done our detailing, we believe this -- we are talking about roughly about 600 million tonnes of limestone yes.

Sir, the premium that you have paid and if you have any secured any incentives for this project, along with the time lines?

Mines are not auctioned. They are allocated yes.

Okay. And sir, incentives?

No. We have not yet received any confirmed paper document from the government of Merala on incentives to be given yes. We have approached them, but we have not got any confirmation from that. So this project is to our estimate, strongly viable, even without incentives.

And sir, how should we look at the CapEx number, it looks very high, INR 1,800 crores. Is it because of the region? Or is it something different?

No, my dear friend, Bhandari here. The INR 1,800 crores CapEx afferent looks very high. But then as Mr. Akhoury just pointed out, we have 3 blocks. We have prospected 1 block, which gives 600 million tonnes. Ultimately, we intend to reach those 4 million, 4.5 million tonnes of capacity there. But then once you start looking at setting up that kind of capacity, we are starting with 0.95 million tonne of clinker and 1 million tonnes of cement. But we have to create the necessary infrastructure, acquire the land draw the power lines according to our ultimate plan. So a lot of brownfield expansion expenditure gets front-ended. And that is why the figure is looking so high.

Perfect, sir. This helps. Sir, my second question is on the cost levers. Any variables that you would like to highlight over the next 2, 3 years, wherein we can actually improvise on the cost. So probably if you can touch upon any targets on WHRS, second is a RE, third is clinker factor. And fourth is railway, I think when I met you last time, you had indicated the railway volumes, we look to double it over the next few years. some numbers over here also would help sir.

So no, I mean, no company runs out of arguments by which it can better its performance. She, of course, has many strong arguments where we can further work on our efficiencies and improve the performance. Last time we spoke about railway projects. We have railway. We have AFR. We have our high power. All these are part of how do you improve your cost position. And that is what we are working on. And really, we are working on at least 3, 4 different different, different sites on the railway. At this moment, it would be not prepared for us to disclose a number, but be rest assured that all those arguments, we are using very strongly to further improve our cost position.

Sir, sorry, any numbers that you would like to qualify for WHRS and RE given we are already doing so well, do we have further room to develop HRA.

All our skills for today and for be linked with WHRS, yes, even currently, all the kids that we are commissioning are having WHRS facilities, yes. For ARI, very durability, I'm not giving you a number today. Maybe by next call, we should be in a better position to give you here. Solar Energy, we are strong. I mean you have seen that we already at 61%, yes. And so wherever there is an opportunity where we will continue to invest in RedEnergySolar included to make sure that we take advantage of this to further better our performance, yes.

To supplement Mr. Akhoury's statement, we are also quite aggressively exploring the the possibility of a viable battery energy storage system, BESS, we have started experimenting on a few things. If that succeeds, then there will be a huge potential of setting up further RE capacity, especially in solar.

Perfect. And sir, clinker factor of what it is right now? And do we have any aspiration on these numbers say 2 years out?

I'm giving the line to Mr. K.K. Jain. He will give you the numbers.

Yes. For the current quarter, the link effect is 4.8% against 63.9% December '25 and the 4 in March '25.

And sir, any target for this 2 years out?

Well, that is dependent on what kind of market we are addressing to -- there are some markets we are still -- they are still on a different kind of lines. Let Akhoury explain you about that.

For each product, we will be fully optimizing our clinker factor. Now the future will depend on the product mix, yes. And product mix will depend on the kind of segment that we will continue to cater to -- so if it is OPC, then, of course, there is a problem, there is a result in a lower clinker factor. And if it's PPC, it's a better income. But -- for now, I think our clinker factor is in line with best-in-class in the industry, to my mind, except people who use at flat.

I'll stick my neck out and say that probably we have the best clinker factor.

[Operator Instructions]. Our next question comes from the line of Rashi from Citigroup.

Just on the cost, sir, what has been the cost movement in this quarter, cost of production versus the last quarter?

Raashi, let me address this upfront. Our -- as I said, our parocalgary landed cost last quarter was at 1.60. We expect to keep this creep-up to 1.76 or 180 million -- we will Jajoo share the exact calculation with you. But then please understand that we are trying to keep on increasing our sub efficiency. Our [indiscernible] gallery consumption in last no, no, not the cost quantum of all -- yes, we use 7-kilo calorie in this quarter vis-a-vis 741 in previous quarter. So we are continuously trying to increase this. And if we -- sorry, decrease this and if we decrease this, then the quantum throughput also falls isn't yet.

Got it. Sir, for this -- so besides the power and fuel cost, you would have also witnessed an increase in packaging cost. So on a cumulative basis, what kind of cost increase are we talking about?

Well, you should roughly take about INR 150 a tonne, that is about 7.5, yes, Mr. jain.

Yes, There is some increase in the packing cost in the quarter. The impact in the mark. And it is around -- if we see the quarter figure, and it is increased by INR 20 per tonne. And now going forward, it would be around, say, INR 100 per tonne, there will be increase.

So on a total cost basis, just going back to the fourth quarter, you had an increase in the power cost. You've had an increase in fleet as well as in packaging for the blended cement cost of production would have gone up by how much during the fourth quarter sequentially?

Increasing would be -- so we are a INR 150 to INR 200 per tonne including taking and raw material costs as well as the power fuel and all.

This is in the fourth quarter?

No, no, in the coming quarters. In the fourth quarter, I'm not say in the fourth quarter, almost say the impact is around or 30 in the fourth quarter compared to December.

Okay. So total cost increase is INR 20 crore, INR 30 versus the third quarter. Okay. And just one, what was the percentage of blended cement and trade cement during the quarter?

Yes. it's 64%. 64% was the trade sales. you wanted the trade sale, right? No, blended. Blended is 62%.

So blended is 62 and trade is 64%.

Correct.

Our next question comes from the line of Parvez Qazi Nuvama Group.

I'm sorry if you've answered this question earlier, but I just wanted to get what was our cost in Q4.

Come back again, please.

Sir, what was our real cost in Q4 FY '26.

It's 1.6.

1.6 per kilo call landed at our plant.

Sure. And just 1 more question. What would have been our fuel mix in Q4?

For Q4, it was pet coke was 54%. Coal and alternative was 14%.

Our next question comes from the line of Prateek Kumar from Jefferies.

Sir, my question is on your pricing gap closing with the last year. You talked about closing INR 20 gap. So is it similar across regions? And -- is this the stabilized level as you said, there's always scope to improve, but how is this different across regions?

So let us understand Pat INR 15 to INR 20 is the delta decrease across region, and we intend to keep it -- we intend to compress it further. But then demand plays a major role in pushing the price rises. So let us see how the demand pans out.

Sure. And this pricing gap reduction, has it happened over the past 3 quarters right? Since then, your volumes

Over the over has been a continuous exercise. In third quarter, we had restricted our volumes to have the size in -- and fourth quarter, we have done at right, the pricing is fine. The volumes are good, and we intend to remain like that.

Sir, other question is on your RMC business revenue for Q4 and full year and EBITDA for Q4 and full year.

Revenue is INR 90 crore. And the volume is 1.99 lakh said.

RMC is at a very nascent stage, just started, yes. We are a very new 26 plant company now going I think we will take a few more quarters and maybe some years before we are able to report RMC dependently as a business line. Go ahead.

The revenue was INR 90 crores for Q4 and for full year number?

It is INR 246 crores.

Our next question comes from the line of Pulkit Patni from Goldman Sachs.

Just 1 question. You spoke about packaging cost increase of INR 20 already done and another maybe INR 80 to INR 100 in Q1. and there's another INR 150 to INR 200 of fuel cost increase. Sir, would that be it? I'm just trying to understand what is the kind of inventory of fuel that we have right now at the plants? And does it fully reflect in Q1 or Q2, we'll see further inflation in that?

No, wait a minute. As far as Q2 is concerned, we cannot comment. Can you tell me where the world will be over may, please. Here we are. At the moment, we are saying that our peril can record in Q4 was 15%, which is likely to go up by 10% to 20% in Q1. Q2, we are not in a position to comment. There are no available floating cargoes amenable. And the Strait of Hormuz is playing its own for export. So it is very difficult. It's extremely dynamic situation. So in PVC, the PVC granules or valances or I mean the canopy price rise the indication, as on that, you can take INR 100 per tonne of banking cost rise as Mr. Jain had explained to you, in the visit the quarter at very time depending on the weighted average cost of consumption, which we use or which most of the use, the incremental negative impact of such cost rise will be incrementally reflected in our results. And also remember that the industry as a whole is suffering on these 2 accounts. And there is a cost of effort by all players to try and have a price rise, which should mitigate this cost increase.

Sir, I fully appreciate that. The reason I'm asking this question is some of your peers have highlighted that they maintain between 60 to 70 days, 75 days worth of fuel inventory, which let me.

Let mme, please understand, that the top of 60 to 75, we have never gone below 90.

Sir, in which case, the fuel cost should with us in the second quarter, right? I'm a little confused, sorry. Help me understand this.

I said that people are saying they carry 60 to 75 days of inventory. I say our coal inventory doesn't go below 90 days.

Sir. So if the war started end of Feb, early March, then it is not before the last month of this quarter, that increased cost should hit you, right? Right now, we should be operating no loss inventory.

No, my dear friend, you are slightly mistaken. The charge is on weighted average cost, not on procurement costs or historical cost. The weighted average cost with every shipment keeps on increasing if the fuel price is rising. So yes, the major impact will come in the third month. But then every month, you will have some incremental effect.

Precise , sir. So in which case, whatever is getting ordered today, the second quarter impact of cost will be much higher. That's what I'm trying to assess.

That is -- you are assuming that the same pricing will sustain that will keep on going that all shipment chaos will be there I'm not in a position to regard that guess at the moment.

Fair point, a point well taken.

I would like to clarify one thing, there will be a cost impact of INR 150 crores, INR 200 in the second quarter as compared to March '26. This is in total, including the packing base cost and the June quarter, not I mean say, not definitely for the call and for the banking back.

This is cumulative cost.

It's put together all

Our next question comes from the line of Raghav Maheshwari from Equirus Securities.

Congratulations for good set of results. Sir, my question is on the -- firstly, the rent situation in the north market for the flyers related because due to the continued CapEx is going into the next for the FY '27 and 2 to the note market. How will you see the flash availability in the north? Is it the sufficient highest available because we are acting there is no major new power plant coming. So how is supply situation, especially...

[Foreign Language].

So what kind of demand we use or other meters rather than flies for the PPP?

[Foreign Language].

Our next question comes from the line of Girija Ray from Nirmal Bank.. As there is no response from Girija Ray, we will move forward to the next participant. Next question comes from the line of Rajesh Ravi from HDFC Securities.

Yes. And just a follow-up question, sir, on the operating numbers. While most of our -- most of them are already answered. -- it was the lead distance that you mentioned in Q4?

I think it was 455 kilometers.

455 kilometers, okay?

And yes. What is the exact number, 457, sorry.

Okay. And this you're looking to go back to 440 in subsequent quarters?

Yes. And the price that even lower.

Understood. Yes, yes. And sir, lastly, on the cement price hike across market our operating markets, this 150 to 200 cost inflation that we are seeing for Q1. Are they fully covered in the price increases which you have taken in the month of April?

[Foreign Language] We anticipated cost increase up to June. [Foreign Language].

And sir, given the steel prices have also shot up significantly and there are across the board, inflationary impact on construction materials, and there have been disruption even on labor. Have you seen demand disappointing in the month of April and May so far?

[Foreign Language].

Our next question comes from the line of Navin Sahadeo from ICICI Securities.

Yes, just last 2 people are there for the questions. Sir, just 2 questions from my side. So in the initial comments or maybe to the answer to 1 of the questions, you said -- I mean according, you said that the incentives for Meghalaya, though we are like working with the state, but nothing is promised that yet. Is this a new policy or any change in policy for the state or it's -- just let me understand this because other companies, which are automating.

Navin, [Foreign Language].

Understood. Understood. Sir, my second question was about the North region. I think some time back, Bangurji in TV interview had said, that they might lose some market share in the north region because of the certain I think upcoming capacity. And -- but this quarter, our volume growth has been definitely like much better than the previous quarters. And also the strategy is very consciously towards focusing on volumes. -- now that we have...

[Foreign Language]. No, I said that we sacrificed volume to reach a price point. And once we reach that price point, and it became acceptable to all, we sold as much as we could, sir. So how volume rate is correct. How very volume at is curation [Foreign Language]. It is not that we are reinventing the equation, when do our volume to volume. Profitability is our main concern. We remain focused on profitability. [Foreign Language]. Navin, are we through.

Yes, we can conclude that one. Can you please go ahead.

that was the last question for today. I now hand the conference over to the management for the closing remarks. Thank you, and over to you, team.

Thank you, everybody. Thanks for this -- for the call, and thank you for participating. Be rest assured that despite all the numbers that we have shared -- and thank you for wishing us well on this 11% volume growth. Many things will continue to unfold in jury cement. We will continue to sharpen our approach and focus on cost. We'll also continue to work on our premium products. As you have seen, we have now crossed 22%. Up by about 40% from 15% to 22%, yes.

140% there is an increase in the sale in last 2 years, from 9% to 22%.

The 9% to 22%. So we are doing everything possible on using all the levers, be it on the cost of edotherevenue side. better performance in the coming quarters. In China, whatever is the macroeconomic conditions will be impacted. But within those conditions, Shree will do its best to continue to deliver some superior results. Thank you, everybody, and have a very good evening. Bye-bye.

Thank you, so much sir. Ladies and gentlemen, on behalf of ICC Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.