Star Cement Limited (540575) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Star Cement Q4 FY '22 and FY '22 Conference Call hosted by PhillipCapital (India) Pvt. Ltd. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital (India) Pvt. Ltd. Thank you, and over to you, sir.

Thank you, [indiscernible]. Good evening, everyone. On behalf of PhillipCapital (India) Pvt. Ltd., we welcome you to the Q4 FY '22 and FY '22 call of Star Cement. On the call, we have with us Mr. Tushar Bhajanka, who is a part of the promoter family and the [indiscernible] promoter of Star Cement. He's also sharing the additional responsibility of being the Chief Strategy Officer and -- rather the CSO of the company. Along with him, we have Mr. Manoj Agarwal, who is Chief Financial Officer of the company. At this point in time, I hand over the floor to Mr. Tushar and Mr. Manoj Agarwal for their opening remarks, which will be followed by interactive Q&A. Thank you, and over to you, sir.

Okay. So good evening, everyone. My name is Tushar Bhajanka. I'm one of the promoters in Star Cement. And as Vaibhav said, I'm also handling the CSO position at the moment. I would like to welcome you all to the earnings call of quarter 4. I have Mr. Manoj Agarwal, who is the CFO of the company. He will take you through the quarter 4 numbers and also the yearly numbers for FY '22. After that, you will be able to ask questions, and we are happy to answer. So over to Manojji.

Yes. Friends, very good evening. I, on behalf of Star Cement, welcome you all to our con call for discussing our number of Q4 FY '22 as well as the full year number for FY '22. I would like to clarify that we are discussing on the historical numbers, and there is no indication to invest. Having said that now, I will just take you through the Q4 number, followed by the full year number. Starting from the clinker production, during the quarter ended March '22, we have produced 6.71 lakhs ton of clinker as against 6.30 lakhs ton same quarter last year. So far as cement production is concerned, we have produced 11.59 lakhs ton this quarter as against 8.99 lakhs ton same quarter last year. Now I will take you through sales volume. During the quarter, we have sold 11.52 lakh ton of cement and almost no clinker as against [ 9.01 ] lakh ton of cement and 0.05 lakh metric ton of clinker same quarter last year. This is as far as cement and clinker sale is concerned. As far as geographical distribution of cement is concerned, in Northeast, we have sold around 8.14 lakh ton as against 7.46 lakh ton during same quarter last year. And as far as outside Northeast is concerned, we have sold 3.38 lakh ton of cement this quarter as against 1.55 lakh ton same quarter last year. In terms of [ brand ] mix, it is almost 12.5% of OPC and rest is PPC. These are the quantitative numbers of the quarter. Now I will take you through the financials. The total revenue figure for this quarter is around INR 748 crores as against INR 602 crores same period last year. As far as EBITDA figure is concerned, this quarter, we have done an EBITDA of around INR 122.55 crores as against INR 112.70 crores last year. PAT is INR 88.42 crores as against INR 85.29 crores in the same period last year. On per ton EBITDA front, which is INR 1,063 during this quarter as against INR 1,243 per ton same quarter last year. This is what our quarterly number of fourth quarter. The total revenue figure for the full year ended March '22 is around INR 2,218.74 crores as against INR 1,718.61 crores, same -- last financial year. As far as EBITDA figure is concerned, during FY '22, we have done an EBITDA of around INR 379 crores as against INR [indiscernible] crores last year. PAT is INR [indiscernible] crores as against INR 187 crores in last year. That is on account of the extraordinary item last year of INR 64 crores. On per ton EBITDA front, it is [ 1,112 ] during FY '22 as against [ 1,337 ] per ton in last FY '21. These are quarterly and full year numbers. Now I request all of you that if you have any queries, you can ask the same, and I will request Vaibhav to moderate the query wherever it requires. Thank you. Over to Vaibhav.

[Operator Instructions] We'll take the first question from the line of Shravan Shah from Dolat Capital Market.

Sir, first, I just wanted to understand in terms of the demand for the fourth quarter in Northeast and East. And at the same time, in terms of the capacity utilization for Siliguri plant. Because last time, it was around -- you said 60% was there and 65% likely to be there in fourth quarter. So...

Yes. But just a bit of correction. Because last year, we have filled -- up to last quarter [indiscernible] that in the next quarter, we will be achieving around 60% of the capacity utilization. So that we have already achieved in this last quarter, okay.

I mean the demand situation in Northeast and also the areas of outside Northeast that we serve has been good this quarter. And that, of course, reflects in our volumes as well. So we have done about 11.52 lakh tons in this quarter, which when we compare to the last year same quarter, it was about 9.01 lakh tons. So definitely, there is an uptick in the demand. And also for outside Northeast, there has been an uptick in our [ feeder ] network as well. So that's -- these are the 2 reasons why our volumes have grown. As for the utilization of Siliguri, the plant has been utilized at about 65% capacity for the quarter 4, and we do expect similar trends going forward.

Okay. So in terms of the -- now Siliguri utilization is at 65%. So for the full year, what kind of number we -- so broadly just trying to understand in terms of the volume that we are likely to have in FY '23. So including the utilization in terms of the Northeast and [ East, so ] the volume growth most likely to come from the East. So I just wanted your thought on that? And second is on the pricing.

So of course, I mean, the volume growth, I'm very bullish about Northeast and also the areas in East that we serve. So the volume -- so utilization of Siliguri for the coming year would be about 60% to 65%. So that is what the utilization right now looks like. So it will, of course, definitely increase from the 42% that we had in FY '22. And about the proportion of East to Northeast sales that we have, so I do expect the Northeast to also kind of show a similar growth in numbers. So I do not think that the proportion of Northeast sales to our total sales would be decreasing.

Okay. And in terms of the pricing, so about post March, how much price increase we have taken till now?

So the price increase has -- post March, the price increase were of about INR 20 to INR 30 in West Bengal and Bihar and of about INR 10 to INR 15 in Northeast.

Okay. And lastly, sir, update on our expansion plan. So our 3 MTPA clinker in Meghalaya and 2 MTPA in Goa. Last time you said that ToR has been received for both, and we were expecting clinker clearances for that. So what's the status? And is there any change in terms of the overall CapEx that we were thinking, INR 1,700 crores, INR 1,800 crores and...

Yes. So I think for the [ 3 million ton ] clinker plant, we have gotten most of the permissions. And I think you should be starting to -- we should start construction by next month. The date for the plant to be commissioned is by end of next calendar year, so December next year. We have already ordered machinery for the plant. We have ordered for most of the machineries for that plant. And also for the cement mill coming up in Guwahati. So these 2 projects are going in mainstream. Also, we have now planned to get another grinding unit in Assam, in the southern part of Assam, South Assam. And the details of that plant and the exact location and the market that it would cater will be addressed in the next quarterly call.

So sir, grinding unit in Assam, also you said clinker are likely to commission by December '23, and the grinding unit will also be by December '23?

Yes. So the Guwahati grinding unit and the clinker plant, they both would be about the same time. So it may be a month here and there, but they should be broadly coming in the same time. And the third plant that I was talking about, the grinding unit, that may take 2, 3 extra months compared to these plants.

So the new one, so related is new one would be also 1 or 2 million ton or are the details we will be sharing in the next quarter?

So it will be shared in the next quarter, but the expectation is -- we're still deciding on the -- we are still doing the market analysis. And so that's why we haven't chosen on the capacity number, but it would be about 1.5 million to 2 million capacity.

So broadly, in terms of the CapEx now for this year and next year, so for existing, ongoing, the expansion and the new broader range, how much are we likely to spend this year? So total CapEx and for this plant, how much are we likely to spend?

So I mean the total CapEx that we expect for that one 3 million ton clinker plant and two grinding units of 2 million tons each should be about INR 2,000 crores. And approximately, I will have to take out the split, but approximately, it is going to be around 50% of this CapEx each year. So in the next 2 years, it's [ INR 1000 crores and INR 1000 crores ].

[Operator Instructions] Next question is from the line of Keshav Lahoti from HDFC Securities.

When I was looking at your balance sheet, I can see that your long-term other financial assets have increased from INR [indiscernible] crores in this year. So what exactly it is? Is it balanced with banks?

Yes, because it is more than 1 year only on fixed deposit. It is fixed deposit and bond, which is maturing more than 1 year.

Okay, sir. Nothing apart from that, right. Okay. May I know what is the status of the clinker debottlenecking? Sometime back, you were planning for 0.2 million type for debottlenecking on clinker side, it is on cards?

Yes. So I think we have worked on it. We do expect some -- we have worked on the -- some technical aspects in the plant. And we do expect earlier our clinker capacity was about 2.6 million tons. So we do expect that we can push it to about 2.7 million tons in this financial year. So we have made some changes, and we do expect like about 1 lakh ton more clinker to be produced due to those changes.

Okay. And what's the progress on the WHRS fund? .

Yes. So the WHRS projects, there were some delay from the vendor side, but we have now taken care of that. The delay was mainly because of the increasing steel prices, but there was some request for revision of the contract. However, now the plant should be coming in October this year.

Okay. Okay. And post that also, we have WHRS for our new plants also and [indiscernible] commissioned?

So that will commission along with the plant, end of next calendar year.

What is [indiscernible] from the environmental clearance from the [ new expansion ]?

Which one?

The new -- the Meghalaya expansion environmental clearance.

So we did have a meeting recently with the ministry. And I do -- I am very positive about getting the clearance by the end of the month. So it should be with us. We, of course, had -- we have already got the public hearing cleared. So now it is with the ministry, but I think by the end of the month, we should be having the good news.

Okay. That is great to hear. And one last question from my side. So how is the coal supplies from Coal India now? And what should be -- how should be the power and fuel cost in quarter 1?

Sorry, can you repeat the first part of your question?

I just want to get a sense about what should be the power and fuel cost in the quarter 1? And are we facing any supply issues from Coal India?

So I mean, there were some disruptions because of the rig availability. There were some disruptions in coal, but we do maintain a healthy stock. So I don't think those disruptions are going to be passed on into [ our cost ]. And I do not think that we will face a very significant rise in our fuel prices going ahead. Of course, the IEX prices have been fluctuating. In the middle, they had gone to about INR 10. Now they come back to about INR 6. So that, of course, our grinding units have to face. But I don't think there's any increase in fuel costs in the clinker plant. So I do think that in the next 1 or 2 quarters, we should be -- I mean, we should be not seeing any steep price there.

Okay. Okay. So how months of fuel inventory you have in hand right now?

So we have about -- we have about like 1.5 months to 2 months stock right now.

Our next question is from the line of [ Raj Nahar ] from Mili Consultants and Investments.

My question is about coal. How are you managing to get the coal? Are you getting coal purely from Coal India or are you exporting the coal or pet coke?

So I mean to answer that question, of course, we are -- we do have a very good FSA contract with Coal India. So most of our coal comes from Coal India. And then we have been able to substitute some of our power requirements and energy requirements to biomass. So that has also been giving us some breathing space in the last 4, 5 months. And so I think these are the 2 sources where we are basically getting our coal from, yes.

So just how much percentage of biofuels you are using in power? And also, are you using biofuel or any other waste material in your kiln?

So I mean -- so we are substituting about 10% of our total energy requirements from biomass at the moment. We haven't started AFR in our kilns, but that is the project that we are now taking up. And I think in the next 6, 7 months, we should have a mechanism to kind of feed up in 5% of AFR. So we have been in touch with the municipal corporations around, and we have had some tie-ups with them. So I think in the next 6, 7 months, there should be a substitution to about 15% to 17% of our energy requirements should be coming from renewable or green sources.

So you have installed a feeding system for the kiln also or are you going to install?

No. So we have placed the order for the -- to be able to install. I think in the next 6 months, we will be able to install the system, the AFR system. The system that we're installing is not a 15% substitution in the kiln, it is only 5%. The system is very basic. So in the next 6 months, we plan to execute that and to set it up. And then probably from quarter 3 onwards, we would see that we have started substituting even in the kiln some AFR.

So there is -- in this quarter or in the subsequent quarter, the price of fuel basically is likely to remain same unless Coal India increases?

Yes. Unless we face any shortage from Coal India on their agreement, I think the prices should be fairly -- I mean, it may increase, but the increase will not be significant.

The last question is what is your WHRS capacity for your existing plants and what will be for your expansion?

So the WHR capacity that we're setting up at the moment is about 12.3 megawatts. And the one that we're going to come up with, with the new line is going to be about the same. I think it's going to be 11 to 12 megawatts.

Existing, 11 megawatts and the expansion also 11 megawatts?

Existing is 12.3 megawatts. And the one which is coming up with the new line is going to be about 11 to 12 megawatts. So I'm not very sure because we haven't locked the WHRS part of the project, but it is going to be around 11 to 12 megawatts.

And what will be the capacity of clinker from this plant?

So the current capacity that we have is about 2.6, which can be extended to about 2.7. And for the new plant, it would be 3 million tons.

For clinker capacity?

Clinker capacity, yes.

Our next question is from the line of Uttam Kumar Srimal from Axis Securities.

Congratulations on good set of numbers for the quarter as well as for the year also. Sir, my question pertains to your CapEx plan. As you said that company will be incurring INR 1,000 crore of CapEx in the next 2 years. Sir, how do you wish to go for CapEx? So it will be -- you'll be taking debt for the CapEx in the next 2 years? If you can clarify on that?

So the CapEx that we plan for the next 2 years is about INR 2,000 crores. We have about INR 750 crores as cash reserves in the company at the moment. And we will, of course -- and we do expect healthy cash inflows for the next 2 years. So we will, of course, have to take some debt. But just how the promoters are, we don't like to keep very long-term debt in the book. So I think that debt will be -- in a 2-, 3-year horizon, we may have some debt, but we'll pay it off as soon as possible. So I don't think the debt situation would be something of a concern going forward.

So sir, if you can quantify the debt number, if you can?

It will be maybe somewhere between INR 500 crores to INR 600 crores at a time, and then will be repaid in the 2 -- it can be repaid in 2, 3 years.

Yes. So I think we don't exactly have the numbers. It would be broadly about INR 500 crores to INR 650 crores about because it will take us -- the CapEx outlay is not at once. It keeps on happening throughout the 2 years. So the expectation is that most of it will be paid by our own cash inflows that we expect in the next 1 or 2 years. And some amount of debt, about INR 600 crores would be taken, which should be paid in the first year of commissioning of the plant.

Okay. Okay. And also some data points, what has been about trade and nontrade mix during this quarter?

So I think it's about the same as last quarter. It is about 14% -- 84% and 16%. The 16% has been nontrade and 84% is trade.

Okay. And sir, what has been our lead distance during this quarter?

This quarter [indiscernible] this year, it is 219 kilometers, okay? And last quarter also, it is around INR 222. So see, it's more or less same lead distance.

Okay. Okay, sir. That's all from my side, and all the best to you.

[Operator Instructions] Our next question is from the line of Mangesh Bhadang from Nirmal Bang.

Congrats on good set of numbers. And also thanks for providing the detailed -- separate details of rate and [ power ] in this release. So my question is on the overall demand scenario in Northeast? So if you look at our volumes -- overall volumes even from 2015 all the way up to 2021, we have not seen so much of a growth despite having a very high market share in Northeast. And now we are adding, say, 3 million tons of clinker and almost 4 million tons of grinding, it would probably be more than 30% of the total demand in that region. So what gives us confidence that such a large capacity in the Northeast region should be able to ramp up or get utilized faster and what kind of demand trends you are seeing, which we have [indiscernible]. So that's the first question.

Okay. So I mean we are very positive about the growth that we see in Northeast. In this year also, the market has probably grown about 17%. But that may be true for other markets as well. But the kind of investment, which is coming from the government at the moment, I think it's really going to drive up the aggregate demand around that area. So a lot of the growth story, which is going to come out in the next 4, 5 years or probably like the decade in Northeast would be the government intervention in that area and the infrastructure development, which takes place. And of course, cement being a very critical element of that, we do see a direct increase in demand for cement. So I think this is truly the reason why -- what really motivates us to kind of put up a higher kiln. And the second reason to put up a 3 million ton versus the 2 million ton is the efficiencies that our larger size gives us. So in terms of utilization, it may take us only 1 or 2 extra years to utilize the plant. But in terms of the cost savings, it's significant. So those elements are also considered while taking the decision. And the market that has been effective -- so the target that we have right now is, of course, the focus in Northeast to grow in the trade market, but also the on-trade market. At the same time, it is also to grow in the North Bengal market. It is also to grow in the East Bihar market. And third reason why we are bullish, the first is, of course, the government expenditure in that area and the aggregate demand increasing. The second one is, of course, that we are also increasing the size, the geographical size of market that we are trying to capture. And the third one is there's no new capacity that we know of, which is coming in that area. Because a lot of reasons why the earlier capacities had come up are not there anymore relating to the subsidies, of course. So I do not expect that it will be really possible for some of these players to kind of expand. So that is also one reason that we think that we'll be able to adjust it to our utilization.

Sir, secondly, on your CapEx cost, because of the increase in various input costs like fuel, what kind of cost inflation you have seen in your CapEx cost? You mentioned INR 2,000 crores on this setup. So has that been -- does that factor in the increased prices? Or do you think that there could be some upside to this CapEx cost?

No. So I mean, of course, until now, we have been able to lock most of the machinery for the clinker plant and the grinding unit. So we already factored in that and then signed the orders that we had to. And the number of INR 2,000 crores, of course, accounts for the orders that we've already made. So to say that, yes, the INR 2,000 crores just factored in the costs, which have increased and [ this is ] the most revised number that we have.

Okay. And sir, one more question was regarding coal. So recently, we heard that Northeastern coal fields, which is based [indiscernible] that has started production after some time. So just wanted to check if is it possible for us to benefit from it on where we are purchasing coal right now compared to that, if we purchase it from Assam, whether it could be -- give any cost benefit for us?

So I mean, there are 2, 3 things that -- one is -- hello, can you hear me? Yes. So I was just saying that one is, of course, the quality of coal. So the coal quality that comes from Assam has high sulfur, which becomes very hard for a clinker plant to operate on. The second is the volume. I don't think the Northeastern coal fields [indiscernible] do not have a kind of a volume to supply to the size of cement industry, which is there in Meghalaya. So I do not think -- of course, we have explored and we can explore it further. But I do not think that anything very significant would come out from there because of the quality and also the volume of it. But yes, I think that's probably that.

Our next question is from the line of Parth Bhavsar from Investec.

Sir, I just wanted to understand that what was the fuel mix during the quarter? Like how much was from coal and how much was from other sources?

So I mean, like I said, that we have substituted about 10% of biomass. The rest of it was coal.

Okay. And so out of that 90%, how much was -- how much did it -- from it came from Coal India?

So I think almost all of it was from there.

Okay. Okay. So all of it came from Coal India. And on this purchase, what was the per [indiscernible] cost for the quarter?

So I think we have a long-term fuel agreement at about INR 1.35 [indiscernible] landed. So all the purchases that we made are basically falling around that price.

Because we had the stock also [indiscernible] because we are purchasing options that the stock has started coming in during this quarter. So that is also -- that are also one of the reasons, okay?

And this would continue for another month or 2, right?

For the quarter only.

For the quarter. Okay.

I think the FSA contracts that we have are in place for 5 years and it started last year, and the prices are fixed for 5 years. So the benefit we should be accruing in the years coming ahead as well.

Our next question is from the line of [ Mudit Agarwal ] from Motilal Oswal.

So sir, my first question is related to the -- so sir, my question is related to the flood kind of situation in the Northeast states, like there's a heavy rains. So could you please some put your highlights on the -- how is the current situation over the demand in these markets?

So I mean -- so that's a good question, I guess. There is -- since a week, there have been floods in Northeast, and it has been more than the usual. Till a week back, the demand situation was good. But of course, because it's so much flooding, the cement demand for this week has fallen. I do not think -- it just really depends on how long the situation carries on. Right now, it is really actually just flooding. So of course, the cement demand would take a hit. But I think that the forecast suggests that in a week's time, it should be all clear. So then we do expect the demand to pick. Yes. So I think in a week -- in this week, we have observed that the demand is going down. It will naturally go down at if the state is covered with water. But I do expect that as soon as the flooding subdues, demand should be back.

Okay. And the second question is related to the outstanding freight subsidy. So how much it is outstanding in both current and noncurrent? And how much you have received in the full year FY '22?

Which subsidiary you're talking about? Freight subsidy, hardly, we have only INR 12 crores outstanding is there, right. Because [indiscernible] outstanding is there, we have received an appeal. We have INR [indiscernible] we have received this in April month. So only outstanding is INR 12 crore or so in the freight subsidy.

Sir, can you repeat the number? Actually, I didn't hear that.

Because we have -- because we have a total outstanding of around INR 37 crores, okay. And INR 25 crores we have already received in this April month of this fiscal year. So it is only -- right now, it is outstanding [indiscernible].

[Operator Instructions] We'll take the next question from the line of Shravan Shah from Dolat Capital.

Yes. Sir, first, in terms of the other current assets, which has reduced from INR 326 odd crores in FY '21 to INR 200 crores. So what's the reason for that?

Mainly because we have received all GST refund, we have received almost -- up to last quarter, we have received all the GST refund. So that is because the government has released a lot of funds. So all the GST refund receivables is getting cleared this year. So that is the reason that has come down around INR 100 crores. So that is the major reason for reduction in the other current assets.

Okay. Okay. Second, sir, I just wanted to clarify, sir has mentioned that currently, we are having a INR 750-odd crore cash level. So even if as you previously mentioned that INR 123-odd crores other financial asset is fixed deposit. If I also include that, then the number comes at INR 670-odd crores. So will you please help me? So INR 750 odd crores.

As of March, it is around INR 670 crores. But now we're talking about the current position. But by April -- by the April end, it is 750 -- more than INR 750 crores.

Okay. Okay. Okay. Got it. And sir, you mentioned 219 lead distance for FY '22 or for fourth quarter of FY '22?

It's for FY '22 as a whole.

And for the fourth quarter, how much it was?

[indiscernible] because in the -- up to last quarter, it is 222. Now it has come down to 219. So you can -- this quarter, it is maybe 218 or 217 kind of things this quarter.

Okay. So just wanted to know, despite our lead distance has remained or it has reduced by 2, 4 kilometers, the freight cost has increased 4.5%. So last quarter in terms of the diesel hasn't moved much. So 4.5% increase in freight costs, any specific reason? Q-o-Q -- I'm talking about Q-o-Q increase.

So March is -- because the availability of the truck, because as you know, because in the Northeast, we are moving [indiscernible] more than 82% is by road only. So during the last March closer, year closer, everywhere truck availability is an issue. So every time it happens on -- in the month of Q4 March [indiscernible] getting increased.

Okay. Okay. And second, just to clarify, the upcoming grinding unit is 2 MTPA, clinker is 3 and grinding is 2 MTPA?

So the upcoming clinker plant is about 3 million tons, and the grinding unit is -- there are 2 grinding units coming up of 2 million ton each, approximately 2 million tons each, one would be -- one is definitely 2 million tons, the other one maybe 1.5 million tons to 2 million tons.

Okay. The second one you are talking, 1.5 to 2 million tons, which is in the south on that -- you said will share the details in the next quarter?

Yes, we'll definitely share it in next quarter. We're just like in the middle of locking some things, we will share it after we've done that.

Okay. Okay. Okay. Got it. And on the INR 2,000 crores CapEx, that is for the new expansion, but on the ongoing WHRS 12 megawatt, how much we have already spent and how much is supposed to be spend this year?

See almost, we have the same [ spend ] because total around is INR 150 crores. Okay, we have spent around INR 80 crores up to March itself, INR 70 crores to INR 80 crores. And INR 60 crores to INR 70 crores further requirement is there. This will be -- by October we need to spend.

Okay. Okay. Okay. Got it. And in terms of the other expenses, that is particularly on the advertisement and everything for the Siliguri plant. So now the run rate of this quarter in terms of the other expenses, which is INR 93-odd crores. So anything was specifically in terms of the extra that we have spent which, going forward, can reduce or this is the normal run rate if this is the volume that we want to achieve. This is the normal run that is needed?

No. So I think we, of course, spent more than -- more this year. I mean this year, FY '22, mainly because our Siliguri plant is coming up and we wanted to promote the plant. However, we have now curved our branding expenditure and advertisement expenditure. And I don't think even on [indiscernible] this expenditure is going to be increasing going ahead. So we have marketed and we were successful. We have been able to make the dealer network that we wanted. And we are building up on the dealer network, so we don't need to spend that much on marketing going ahead to kind of take it to a stable place.

So roughly, if I just want to quantify, so in terms of the full year basis or maybe on the fourth quarter, how much was spent for this extra effort for Siliguri plant? So which will -- may not be there. So just trying to understand how much reduction we can see.

I think that's fair enough. So I mean...

This quarter is around 12 -- we have spent around INR 12 crores.

No, so I think like -- if we talk about the year round, so we may have spent about -- and these are very loose numbers, I have to, of course, check. But these are the numbers which are coming on top of my mind. So -- which is around INR 45 to -- INR 43 crores to INR 45 crores is what we spent on branding this year, but at this year, I mean FY '22. And going ahead, I don't think we're going to spend more than INR 32 crores to INR 33 crores. So there is a significant drop in the branding expenditures that we incurred this year, which we're not going to incur in the coming year.

Our next question is from the line of [ Raj Nahar ] from Mili Consultants and Investments.

Yes, I just wanted to know on this Meghalaya clinker unit and also for grinding unit, are you going to get the income tax incentive or any GST, IGST-related incentive?

So I mean, for the Meghalaya plant, there are some incentives, but those are very small. So nothing very significant. But I think in the plants coming up in Assam, we do expect good SGST benefits. So there are 2 grinding units coming up in Assam and they both will -- should be eligible for SGST benefit.

What are the limits? Is it the full cost or it is for certain period or how...

I mean, these are in the current state policies in Assam. So it is, I think, valid for around 15 years. And it depends on the CapEx and if you consider a large project or a mega project or a medium one, but I think it ranges from about 100% to 150% of the fixed investment that you make in the project.

Okay. Two questions on the expansion side. Are you going to add a power plant, captive power plant for your clinker plant?

No. So we basically will have, of course, the WHRS plant coming up with the clinker plant. And we also, of course, are coming up with the WHRS for the current plant. We don't have any plants coming up with a power plant because we already have about 43 plus 8, so we have about 50-megawatt power plant in Meghalaya. So there's no need for more power plants there.

Okay. And the last question is about this grinding unit [indiscernible] is almost 0. So will this be mostly the OPC or you will bring the fly ash from Bihar or Bengal?

Sorry, which plant in Assam are you talking about?

[indiscernible] which you are setting up in Guwahati and also planning to set up in South Assam. So those plants will be operated on OPC, or you will bring the fly ash from Bihar or Bengal or somewhere?

Sir, our idea was that the plant, the grinding unit that we have in Lumshnong, we will shift that to completely OPC and we'll be operating the 2 grinding units that we come up with in Assam through [indiscernible] PPC, and it will, of course, use fly ash. So the fly ash would be coming from rigs from our side.

Our next question is from the line of Uttam Kumar Srimal from Axis Securities.

Sir, my question pertains to volume growth and guidance this year. Last year, we had grown our volume by 29%. So any volume growth guidance for this year FY '23, if you can, give?

I mean, I can tell you what we are targeting by -- and I hope that we are able to achieve it. I think the volume growth that you are targeting is about -- just a second -- is about 17%. So that is what we are targeting this year. We are trying to reach 4 million this year. So we have made about 3.4 million in FY '22, and our target for this year is about 4 million.

We'll take our last question from the line of [ Akanksha Goel ], a retail investor.

Yes, I just wanted to know that generally, why is your raw material cost higher than the other cement players?

I mean the raw material cost is higher because the -- and I mean are you comparing it to other mainland players?

Yes. The all-India companies.

Yes. So I think, of course, Northeast has its own dynamic site, because fly ash and coal usually in Northeast needs to come from outside. And cement is -- the raw material cost is mainly dependent on the fly ash cost and the clinker cost. And the clinker cost is dependent on the coal cost. So if your coal and your fly ash is, of course, more expensive, then your cost of production would be higher, right?

Okay. So do you have any clinker purchases included in those costs?

No, we have not purchased any clinker from outside. A little bit, I think, about 10,000 tons maybe, but not significantly.

Sir, we have a question in queue. That's from Keshav Lahoti from HDFC Securities.

I just have a small follow-up. So your clinker capacity as per initial presentation is 2.8 million tons. In the call, you mentioned it is 2.6 million, will increase to 2.7 million tons.

Yes. So I mean on paper, it is 2.8 million tons. But our experience in the past few years was that we can manufacture about 2.6 million tons. We have made some changes to kind of take it to 2.7 million tons to 2.75 million tons. So I think that is what our capacity stands at. We are making some changes to kind of further push our capacity upwards. But till now, I think the anticipation is that we can make about 2.7 million tons to 2.75 million tons.

Our next question is from the line of [indiscernible] from DAM Capital.

I just wanted to ask one follow-up question on the price hikes. So what would be the price hikes taken YTD right now over the average Q4 price which we have?

Okay. So you mean like the price hikes in the next -- in the last 2 months basically, 1.5 months?

Yes. In the last 1.5 months over the average Q4 prices we have?

Okay. So I mean the prices have increased, investing was in Bihar by about INR 20 to INR 30 since quarter 4. And in Northeast, they have increased by about INR 7 to INR 10 since quarter 4.

Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Vaibhav Agarwal for closing comments. Over to you, sir.

Thank you. Tushar, before we conclude the call, I have one small question for you since it's the first interaction with the investors also. I just wanted to ask you, being the [indiscernible] promoter of Star Cement, what are the areas of agreements which you have identified? And what are your thoughts about taking Star Cement forward? Any color on that would be very helpful.

No. I mean thank you so much. I think -- we do have -- for this company of our size, we are right now about 2.6 million tons clinker and 5.6 million tons cement. And what we have planned in the next 2 years, and then we do want to take our deadlines absolutely seriously, is that we are going to execute a 3 million-ton clinker plant and a 4 million-ton grinding unit. So we want to be about more than double our clinker capacity and almost double our cement capacity. So that is the aspiration that we have for the next 2 years, and we are looking at more opportunities in mainland to put up a clinker plant. So those will, of course, be evaluated while we are setting up these plants. So I think the aspiration is to be as large as we can, of course. And that's what we are heading towards. Thank you.

Thank you, Tushar. On behalf of PhillipCapital (India) Pvt. Ltd., we'd like to thank the management of Star Cement for the call and also thanks to the participants on this call. Thank you, [indiscernible] Thank you, Tushar. Thank you, Manoj sir. [indiscernible] now conclude the call.

Thank you. On behalf of PhillipCapital (India) Pvt. Ltd., that concludes this conference. Thank you for joining us, and you may now disconnect your lines.