Star Cement Limited (540575) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Earnings Call for the Quarter and 9 months ending 31st December 2025 for Star Cement Limited hosted by PhillipCapital India Private Limited. [Operator Instructions] I now hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital India Private Limited. Thank you, and over to you, sir.

Yes. Thank you, Rio. Good evening, everyone. On behalf of PhillipCapital India Private Limited, we welcome you to the Q3 and 9 months FY '26 call of Star Cement Limited. On the call, we have with us Mr. Tushar Bhajanka, Deputy Managing Director; and Mr. Manoj Agarwal, Chief Finance Officer at Star Cement Limited. I would like to mention on behalf of Star Cement Limited and its management that certain statements that may be made or discussed on today's conference call may include forward-looking statements related to future performance and anticipated company developments by its management. Such statements stated on today's call would be based on Star Cement's current management expectations. These statements are subject to a number of risks, uncertainties and other important factors, which may cause the actual developments and results to differ materially from the statements made. Star Cement Limited and the management of the company assumes no obligation to publicly update or alter these forward-looking statements, whether as a result of new information or future events or otherwise. I will now hand over the floor to the management of Star Cement for their opening remarks, which will be followed by an interactive question-and-answer session. Thank you, and over to you, Tushar.

Yes. Hi. Good afternoon all. My name is Tushar Bhajanka, and I'm the Deputy MD of Star Cement. I welcome you all to the conference call of FY '26 quarter 3. I'd like our CFO, Manoj-ji, to give his remarks regarding the numbers, and then we can start with the Q&A.

Yes. Hi, friends, very good afternoon. I, on behalf of Star Cement Limited, welcome you all to our con call for discussing our number for Q3 FY '26 and 9 months ended December '26 -- December '25. Starting from clinker production, during the quarter ended December '25, we have produced 8.94 lakh tonnes of clinker as against 6.42 lakh tonnes same quarter last year. So far as cement production is concerned, we have produced 12.57 lakh tonnes this quarter as against 10.82 lakh tonnes same quarter last year. Now I will take you through the sales volume. During the quarter, we have sold 12.3 lakh tonnes of cement and 0.6 lakh tonne of clinker same quarter, we have -- during the quarter, we have -- and as against 10.6 lakh tonnes of cement and 0.7 lakh tonnes of clinker in the same period last year. This is as far as cement and clinker sale is concerned. As far as geographical distribution is concerned, in Northeast, we have sold around 9.3 lakh tonnes as against 8.37 lakh tonnes during same quarter last year. As far as outside Northeast is concerned, we have sold 2.95 lakh tonnes of cement this quarter as against 2.2 lakh tonnes same quarter last year. In terms of blend mix, it is 18% 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 this quarter is around INR 880 crores as against INR 719 crores same period last year. As far as EBITDA figure is concerned, this quarter, we have done an EBITDA, excluding exceptional item of INR 552 crores, it is around INR 207 crores as against INR 107 crores last year. PAT is INR 74 crores as against INR 9 crores in the same period last year. On the per ton EBITDA front, it is INR 1,600 during this quarter as against INR 1,000 per tonne same quarter last year. This is what our quarterly numbers of the third quarter. The total revenue figure for the 9 months ended December '25 is around INR 2,603 crores as against INR 2,111 crores same period last year. As far as EBITDA figure is concerned, during 9 months ended December '25, we have done an EBITDA of around INR 631 crores as against INR 321 crores last year. Profit after tax is INR 243 crores as against INR 46 crores in the same period last year. On per tonne EBITDA front, it is INR 1,677 during this 9 months as against INR 1,005 per tonne same period last year. These are our quarterly and 9 months ended numbers. Now I will ask request everyone. If you have any questions, then please you can ask the same and I will request Vaibhav to moderate the same whenever is required. Thank you.

[Operator Instructions] The first question is from Harsh Mittal from Emkay Global Financial Services.

I have set of questions. So the first question is, neither of one such event happened in the Meghalaya district, due to a coal mining blast. So don't you have any revenue at on our operation's [indiscernible]?

So I think your question is regarding the Meghalaya mining blast and the situation of illegal coal mining in Meghalaya, right?

Yes. Yes.

Yes. So we have no relation to that incident because our coal is not coming from Meghalaya. So, I mean, it's unfortunate, but we have no information about it.

Okay. Okay. So second question is that, our volume guidance was 5.4 million tonnes for this year. And given that we have achieved 21% growth in quarter 3. So can we see any upward revision to this range?

We can't hear you clearly. I think we can't understand the question. So if it's possible for you to be a bit clearer, then I think it will be easier for us to answer it. Just to repeat the question once, I'll try to understand that.

So sir, my question was that our earlier volume guidance was around 5.4 million tonnes that we that have achieved 31% growth in quarter 3, do we see any upward revision to the guidance?

No, we don't. So I think we will be trying to do about that or probably 5.3 million tonnes. So I don't think there's any upward revision on that guidance for quarter 4. I think we will be broadly growing at about the same pace in quarter 4 as well.

Sure, sir. Sir, freight cost, there has been inflation in freight cost per tonne, which is up 13% Y-o-Y and 6% sequentially. So any specific reason for this? And can we see -- can we assume this as a steady state guidance going ahead?

No. Harsh, there is slight -- because December quarter and March quarter is a natural cycle, there is a slight increase over the second quarter because second quarter is not an oxygen period. So there is hardly is INR 60, INR 70 per tonne increase that is a normal thing. It happens in every quarter if you compare it from the Q2 vis-a-vis Q3 and then Q3 vis-a-vis Q4. That is normal. And there is certain because the transport disruption was there in the middle, maybe October end and November first week. So that is why we have to move the material through rate -- so handling cost has gone up. So that is why -- that was a one-off cost. But normal INR 60, INR 70 increase was there, that is cyclical in nature and every quarter 2 to 3 it keep on happening.

Okay. So can we assume INR 60 one-off in freight cost for this quarter and that will reverse in next quarter? Is it a safer assumption?

In October, we had a strike. The strike had lasted -- it was a strike in Meghalaya, which restricted the movement of clinker. So we had to use rakes to send clinker to our grinding unit. That had increased our logistics cost. And that is why you see an abnormal hike in our logistics cost compared to last quarter or Y-o-Y, which I don't think you would see from quarter 4 when you compare quarter 4 to last year's quarter.

Sir, last question, what will be our depreciation guidance for FY '27 if you can help me with that number?

Yes, depreciation will remain the same. INR 30 crores -- INR 90 crores per quarter. That will be more or less the same.

Sir, depreciation, I'm asking?

Yes, I'm talking about depreciation only.

Depreciation right now is about INR 38 crores per month for us. So -- and that will remain the same because we are also commissioning Silchar plant this month. So I think the depreciation will start showcasing itself in the next year. So whatever depreciation should have reduced will be neutralized by the fact that there is another plant coming up and the depreciation of that will also come up.

[Operator Instructions] The next question is from Navin Sahadeo from ICICI Securities.

Congratulations on a good set of numbers. If you could just -- I had a couple of questions. I'll start with the incentive income that you have booked in this quarter, please.

Yes. So the incentive income that we booked this quarter is about INR 33 crores. If you compare this number to last year same quarter, then last year same quarter was INR 43 crores. And if you compare it to Q2 of FY '26, then it was about INR 56 crores. So our subsidy income has fallen from INR 43 crores Y-o-Y to INR 33 crores, which is a 28% drop in the subsidy income.

So on subsidy, my follow-up question was that at roughly 1.3 million or nearly 13 lakhs of volumes, 12.3 lakh tonnes, as you said in cement. At this volume run rate, is this the subsidy to continue? Or because you said Silchar is just about to get commissioned, I think you just mentioned in a while back, Silchar is about to get commissioned. So this subsidy amount can go up once the volumes from Silchar start coming up? How should one look at the run rate for the subsidy amount?

Yes. So I think the run rate for the subsidy that we have experienced in quarter 3 is a result of the reduction in GST from 28% to 18%, which, of course, then reduces the overall subsidy amount, which we were getting. So that's why there's a drop. And the question regarding Silchar, so when Silchar gets commissioned, first, it will use the import GST from the project, right? So that will take at least 7, 8 months to fully utilize. And after we utilize the GST import credit, that's when we will start utilizing the subsidy. So that will -- so we can see the benefit of having Silchar from quarter 4 onwards next year in terms of subsidy.

Understood. Understood. Sir, my second question then was on your realization. So net of -- once I exclude the incentives, the cement realization for us have seem to have gone up sequentially by a little under 2%. My question was because East as a region, I know yours is Northeast, but still 25% of the volume, as I understand, probably we sell it in areas out of Northeast, which is largely the Eastern region. So if our channel rates were correct and other companies also indicated the same that non-trade prices and even trade prices have taken significant hit in the Eastern region. I wanted to understand how did we manage a 2% increase in a tough environment. I mean, congratulations on that, but just wanted to understand how did we manage to get an increase when most of the players are reporting a decline?

So, I mean, the information that I have, Bihar and West Bengal, the Y-o-Y, the prices in Bihar have risen a bit for us, but the prices in West Bengal have fallen, right? So that is the observation. So for us, in outside Northeast, which is basically Bengal and Bihar has been quite neutral Y-o-Y, FY '26 compared to -- FY '26 Q3 compared to last year Q3. And in Northeast, we have seen an increase in the price of about INR 20 compared to last year same quarter. So I think our weighted average realization has improved mainly because of the Northeast. In East, we have been broadly neutral. If you average out the price increase in Bihar with the price drop in West Bengal, it is basically neutral. So that is how we can see that there's a 2% increase in realization.

Understood. And just to conclude, since our prices or realizations are benefited by the price increase we could take in Northeast, are those hikes holding firm so far in January, Feb or there has been a further improvement? Any color will be helpful.

Yes. So fair enough. So I think the prices are holding up in at least Northeast from December onwards. So we do see that the prices are maintained. So what we exited December month from, the prices have continued to be stable from there. Well, Bihar and West Bengal, I think there is an -- I think we've tried to take an attempt of INR 10, but INR 10 entirely is not necessarily going to show in the quarter 4 for Bihar and Bengal.

No, I understood. But for Northeast, I was only confirming because very recently, we also saw Dalmia's big kiln getting commissioned. So how does that impact on the regional pricing, if at all? Are you seeing -- or how should one see now with a major capacity coming up, how should one look at Northeast pricing in general for the next, let's say, 1 year or so?

I see the pricing to be stable, right? So I don't think there's any problem because of the increase in supply and the pricing. I do see that the pricing even after Dalmia's kiln has come to operation has broadly been stable. So I don't see a price problem for the coming year as such.

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

Am I audible?

Yes. But if you can just speak a bit loudly, that will be very helpful.

[indiscernible].

We are not able to hear you properly, sorry.

[Operator Instructions] We seem to have lost the line for Mr. Rajesh. We'll move to the next question. The next question is from Shivashish Kaushik from IFM Investment Advisors.

My question is basically to check with you what is the composition of nontrade and trade in your total volume? Plus, I also want to know that what is the nontrade even there is a marginal hike in the price, whether that has been absorbed properly? And what is the view in February because there is a lot of noises which is there that there is going to be INR 10 to INR 50 further rise in the price? So we just want to know your view on that.

Okay. So nontrade in quarter 3, we had sold 22% of our overall volume. So this has increased compared to last year same quarter, which was 19%. So we have -- our overall nontrade mix has increased from 19% to 22% over this 1 year. Your second question was regarding the price hike, right?

Yes.

So, I mean, I have not heard any news of price hike as of now. I don't think we have any plans of taking a price hike in Northeast, but to maintain the current prices which have already been increased. So yes, so I don't think there is a hike happening of INR 10 to INR 15 in Northeast.

Another thing which I want to know is what is the price differential with North or Central with Northeast in terms of per bag?

That is -- I can tell you the per bag cost in Northeast, but I do not know what is the price in Central and West and East -- I'll let you know Central and North because we're not present there. So the per bag price in Northeast is about INR 53, but you'll have to probably verify the prices in North and Central as well.

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

Yes. Sir, I was alluding to this incident which has happened in Northeast concerning an earlier question. So overall Northeast as a dynamic and so oversupply, do you see a stringent which is now -- which would be taken by government and cos? Anything we caters on coal availability in North region?

So are you talking about coal availability in Northeast and...

Yes, yes, Northeast coal availability, and overall coal prices going up?

Because of what?

Because of this mining crack down on the illegal mine.

No, I don't think our coal supply is really linked to the Meghalaya coal -- illegal coal, right? So I don't think there will be a big impact of that. Most of our coal is locked in the form of FSA from Coal India, right? And the others are spot contracts that we take from Coal India and a little bit of biomass, right? So I don't think we are really impacted by that at all.

Also, what we understand that you get a good chunk of coal out of Meghalaya [indiscernible]

See, I'm not able to clearly hear your question. So I'm not able to answer.

Mr. Rajesh, your voice is breaking.

Yes, it is better now but then it goes in the middle. You can try to ask a question and then we can...

This is one. And second, also on the freight cost, we see that there has been an upward revision or rationalization on the upward side on Meghalaya trucker's freight cost. So what sort of impact this would have on your numbers in subsequent quarter?

I don't think the freight cost has really been revised for Meghalaya trucker's as such. And I don't see that having a material impact on the freight cost going forward. I think the reason why the freight had increased in quarter 3 is mainly because of the strike, which had happened in October, right, with [ 2 of our L1 ] division, and that is why the freight cost in October had increased and that's what you see in the results. So I don't see that you'll see a material impact of that going forward in quarter 4.

[indiscernible].

We really can't hear you. Now, you're like fully cracking.

[Operator Instructions] The next question is from Kamlesh Bagmar from Lotus Asset Management.

Tushar, can you please highlight -- give some insight into the next phase of expansion because we were looking to expand capacities or enter the markets of Central and North market? So can you briefly touch upon that?

Yes. So thanks for the question. So we are actually firm on our plan to enter Rajasthan. We have gotten mines in Nimbol next to Jodhpur district. And we have been securing land there. And we plan to apply for our EC and get our EC by September, October and then start construction of about 3 million tonnes of clinker along with 3 million tonnes of grinding and subsequently put 2 million tonnes of grinding in Haryana, which will be fed by the clinker plant in Nimbol. So that is our next plan, which is to enter Rajasthan.

Okay. And apart from that, are we looking into the Central region as well or so far sticking only to the North market?

Yes. We are sticking to the North market because we believe that if we focus on one market, which is North and it's quite a big market, right? So I think we will be able to probably position ourselves better in terms of brand and also focus in deeper penetration of the market. So that is the first phase of expansion in North that we have planned, which we plan to start executing from quarter 3 of this year onwards -- of next year onwards -- end of calendar year. And then I think -- yes, so that is the plan. And besides this, we plan to put up a 2 million tonne grinding unit in Bihar, which I think the time line of which we can discuss in the next call because we are in the phase of acquiring land for that. So our plan for the next 2, 3 years is basically to put up a 5 million tonne grinding backed by clinker in North and about 2 million tonnes of grinding in Bihar. And along with this, we have also applied for the EC in Umrangso in Assam for another clinker plant, which we again will get from September this year. So then we can also start laying the foundation then doing the basic civil work for our next clinker plant in Assam.

Okay. So is it fair to assume that by Q3 of FY '27 or Q4 of CY '26, we would be ready with -- like we would be having the orders placed for all these equipments which we have talked about, other capacities which we have talked about?

Yes. I think you -- yes, by Q3 of FY '27, we will be in a position where we have ordered the machineries and we've also started some work on ground in building up the plant. I think machine should be probably in Q2, Q3 around that time, we should be placing orders for machine as well. So we are now a bit clearer about plans of Rajasthan.

Great. And lastly, what percentage of land we have acquired for Rajasthan and Haryana units?

So in Rajasthan unit, we have broadly done a sale agreement right now and the entire land will be probably transferred to us in the coming months, 1.5 months. And we've already applied for the EC on the land that we have gotten a sale agreement. And for Haryana, we have identified the plot that we are looking at, and we will start acquiring the land. But the land in Haryana is a bit aggregated. So I don't think once we have decided to buy the land, then I don't think it's going to take much time. So the EC process that is basically running parallel to the land acquisition process. And that's how we are progressing and that's how we are sure by September, October this year, we will be able to start something on ground.

And what would be the mode of financing so how much debt equity we would be looking at or the -- like say, the equity raised through the QIP or that source of funding?

So I mean, ideally, we'd want to keep our debt equity ratio less than 1.5x the EBITDA -- sorry, debt-to-EBITDA ratio to be less than 1.5x EBITDA. And so I think that is what we are targeting. And then we will make sure that whenever we are reaching the threshold or before that, we will do our QIP to fill in the gap, right? So that is something that we will also share in our presentation -- investor presentation, which is coming.

[Operator Instructions] The next question is from Uttam Kumar Srimal from Axis Securities.

Congratulations on a good set of numbers. Sir, what -- how much CapEx we have incurred in first 9 months? And how much we are going to incur in fourth quarter and in FY '27?

So YTD, we have till now incurred about INR 431 crores of CapEx. And in quarter 4, we plan to incur about INR 150 crores of CapEx.

Okay. And in, sir, FY '27?

FY '27, we'll have to probably plan it a bit and get back because we are still figuring out our plans in Rajasthan when we start construction. So accordingly, we'll have to revise the numbers and probably get back to you on that.

Okay. And sir, with regard to premium cement, what was the share of premium cement out of the trade sales during this quarter?

So we sold about 17.1% of our trade sales was premium sales. This number has increased from 13.1% last year -- sorry, 12% last year. So it has gone from 12% to 17.1% in that one year.

Okay. That should have also helped you in getting more realization because the percentage has improved from 13% to 18%?

Yes, 12% to 17%, yes.

Okay. And sir, what is the current status of AAC Block? How much revenue we have generated this quarter because it got commissioned last quarter?

Yes. So we have sold 61,500 BMC of AAC. The corresponding revenue is about INR 25 crores and quarter 3 we have generated about INR 13 crores from AAC because still in ramp-up. I think the plant is going to take some time to stabilize. And we have utilized the plant at about 45% utilization in the second quarter of its commissioning.

Okay. And sir, what would be the maximum revenue that we can generate from AAC Block when it gets into full utilization?

I think we can generate a revenue of about INR 90 crores to INR 100 crores if we utilize it fully.

Okay. And sir, a couple of data points, trade [ early ] distance during the quarter?

Yes. So the distance was 212.

Okay. It has come down -- it was around 230 kilometers last time, 220 kilometers, I think.

Yes, it was 220 kilometers and now it's come down to 212, yes.

And sir, fuel mix this quarter?

Fuel mix, Fuel mix, 78.8% was from FSA. And about 15% was from biomass and another 5% was from spot.

And sir, per kcal cost was?

INR 1.2.

INR 1.2. Okay, sir.

The next question is from Shravan Shah from Dolat Capital.

Sir, just to recheck in terms of the total CapEx for Bihar, Rajasthan and the 3 million tonne clinker at Umrangso with a 2 million tonne grinding in Jorhat.

I'm sorry, can you please repeat that?

I'm saying the total CapEx, if you can split Bihar, last time you said INR 500 crores, Rajasthan because now it sales of 5 million tonnes. So last time we said INR 2,300 crores to INR 2,500-odd crores. And for Umrangso, 3 million tonne clinker and 2 million tonne grinding at Jorhat, what would be the total CapEx?

Yes. So right now, the plan that we have in mind is to -- in the next 3 years or 4 years, our plan is to put up Bihar grinding unit in the next 2 years, Nimbol and Haryana plant. Nimbol is in Rajasthan, the clinker plant in Nimbol and grinding unit in Haryana and sequentially start working on a grinding unit or our clinker plant in Umrangso. So the overall CapEx for these 4 projects is about INR 4,800 crores.

And broadly, this all should be commissioning in 1H FY '29 or second half of FY '29?

I think towards the second half of FY '29 or beginning of FY '30, these all plants should be commissioning. Of course, they all will not commission together. Some will commission before and probably Umrangso may commission about FY '29.

Okay. So Umrangso will commission in FY '29 and Bihar and Rajasthan will be in the -- maybe -- okay. But that also you said it would be in the second half. So almost everything will be in 3 or 6 months, everything will be commissioned in FY '29?

Yes, FY '29, probably -- yes. So I think the exact time line, we will be probably putting it in the presentation. So I think it will just be a bit clearer for everyone. But of course, the grinding units take less time to commission. And in Nimbol, we are at a decent position. I think in September to start. So the Nimbol, Rajasthan plant will start sooner than the Umrangso plant.

Okay. Okay. Got it. So the Rajasthan plant is also dependent on the QIP or we will start and as you said, once the net debt/equity -- net debt/EBITDA is reaching to 1.5x, then we will then do the QIP of INR 1,500-odd crores that we have talked last time.

I think we are going ahead with the plan irrespective. And whenever we do get the right time to do the QIP or rights issue or any other improvement, we will do it. But we're not talking any plans for the fund raise.

Okay. But broadly, if one has to split this INR 4,800 crores into FY '27, '28, '29, is it fair that FY '27 would be INR 1,800-odd crores and FY '28 would be INR 2,000 crores to INR 2,500 crores and FY '29 would be the balance, that's the way one can look at?

I think we'll have to really like -- I mean, like we also have to plan it in a piece of paper and then share it. I don't think I can just say like that.

Okay. Okay. Got it. And sir, this -- till now in terms of the volume, you highlighted that in the fourth quarter also, we will see the similar kind of a run rate in terms of growth. But for FY '27 and '28, how one can look at because now all this extra new capacity will be coming in FY '29. So ideally, the volume should be coming in FY '30 in a full way. So how one can look at the volumes for at least '27-'28?

So, I mean the coming year, I think the volume growth would be similar to the volume growth that we experienced in FY '26. So I don't see the FY '27 to be very different to FY '26. And the volume growth of '28 would be hard to predict right now.

Okay. Got it. And obviously, the -- as you are saying that the prices are kind of stable, so profitability should be similar to what we are right now having INR 1,650 crores to INR 1,700 crores.

Yes, yes. It should be broadly maintained.

Yes. And lastly, sir, all put together, AAC Block and other non-cement revenue, till now in FY '26, 9 months, how much we would have done? And how much would be the EBITDA margin on that? And for next year, how one can look at that?

So from non-cement revenue...

Around INR 45 crores. Okay? We are expecting to be around INR 45 crores this year. And this year because of first year, everything the first year of operation and it has been -- so maybe we have no profit, no loss kind of thing this year. And next year, we are hopeful that 20% EBITDA margins would be minimum there from that business.

And in terms of the revenue, so this year, you are saying total INR 45 crores that...

[ INR 45 crores ] to INR 100 crores.

Yes. So what we expect is that INR 45 crores this year would be coming from the non-cement businesses. And next year, we expect about INR 100 crores coming from cement business.

Okay. Okay. Got it. And the current cost kcal cost INR 1.2, that should be stable for next 1 or 2 quarters. I hope we should be having 2, 3, 4 months inventory.

Yes. I mean we have about 2.8 lakh tonnes of coal. So that is good enough for at least 4 months. So -- and that is broadly at the same rate as INR 1.2. So I think it should be fine.

And sir, on the green side, the 50-megawatt solar that we were looking at in Assam, so when it is going to start?

So the 50 megawatts that we're looking at Assam, we are still in discussion, I think, with some regulatory change. And so we will consider because now we're thinking of Rajasthan and generation of power in Rajasthan is higher, we may decide to put up in Rajasthan. So we'll have to probably get back to you in the next investor call on that.

All the best and congratulations on good set of numbers for this quarter.

Thank you.

[Operator Instructions] We take the next question from Navin Sahadeo from ICICI Securities.

Just a couple of clarifications. So in terms of your CapEx priorities, is it fair to assume that #1 will be the Bihar grinding unit, followed by a greenfield project in Nimbol and thereafter, Umrangso, is that correct sequence?

So, I mean, in terms of priority, I think we are -- it's a good question. I also haven't put it like that. But I think in terms of priority, I think it really is to move all the 4 projects that I mentioned together as fast as we can because they are at different stages of completion, right? I mean, from an EC perspective and from a groundbreaking perspective. But the idea is to definitely do the Bihar project and Nimbol project. The Nimbol, Rajasthan project will, of course, give us a growth in revenue and create a diversification platform in terms of in terms of the EBITDA and the revenue. And Bihar project would help us utilize our Northeast capacities better. So from that perspective, these 2 things are in priority. At the same time, Umrangso is not an easy terrain to work. So we just want to make sure that we start early so that we are able to commission the plant by the time we need the clinker, which we expect to be about FY '29. So I think from -- like they all are equally important, and they all have different aspects of business which is solving for us. Rajasthan is more from a diversification story. And Umrangso is more from just making sure that we are able to grow in our home market.

Great. Just again clarification. Nimbol is a 3 million tonne clinker unit, correct, and 5 million tonne grindind unit?

Yes.

Of this 3 million tonne clinker -- I mean, clinker, of course, at Nimbol. But the grinding unit will be at Nimbol only 3 million tonnes and Haryana is 2 million tonnes, which is what we are trying, and that is broadly correct?

Yes.

Yes. So for this entire 5 million tonne plant, what is the broad CapEx that we have finalized so far? And then how should one look at the cost or you would rather give it at a later stage?

So I think the cost that we have and that may change. And so I think the broad cost that we have taken out is about INR 2,500 crores -- INR 2,400 crores to INR 2,500 crores for the clinker plant and the integrated grinding unit along with the grinding unit in Haryana. But that estimate may be a bit premature and may have a 10% deviation up or down. So with that flexibility, you can take that number.

Yes. No, the reason I'm asking is because at INR 2,500 crores ballpark at a 5 million tonne, that cost comes to more like $55 for a greenfield project, peers have not really delivered it at such low cost. And that's my question. If one could -- INR 2,500 crores is a realistic number or it is more closer to INR 3,000 crores is what I wanted to make sense of?

I feel that this number -- I feel that this number is realistic because we have just put up a kiln of about that size right now, and we were able to put it up in about INR 1,200 crores. So even if I take the greenfield costs and even if I take the cost of integrated grinding unit, I think we should be able to manage in that much, but I'll again do the working and then probably can give you a further clarification in the next call.

Sure, sure. And from a time line point of view, in Q3 this year, I mean, in the -- let's say, by December of '26, we placed all the orders. So we should be targeting commissioning you said in 1.5 years thereafter. Is that what you said, by end of FY '28 or early FY '29, how should one look at it? Because FY '28...

I think we will start commissioning by quarter 3 of this year of -- sorry, of the next year, which is December around of this calendar year. And I think from there, it will take about 18 to 22 months. So if we calculate then that will be basically around September of FY '28 -- sorry, of '28, year '28, yes. So that is what we are thinking because it will take at least 18 months from when we start the groundbreaking.

Understood. My last question, sir. So for the full year this year, the volume guidance in the first question that you answered, did you say our volume guidance for this year remains intact at 5.3 million tonnes for '26?

Yes. I think about 5.3 million tonnes remains intact. And it also has clinker...

Okay. The reason why I asked is because 5.3 million tonnes will imply flat volumes year-on-year in Q4. So that's where I was checking. Are we saying that Q4 will see flattish kind of volumes year-on-year or could see some increase?

Yes. No, I think there is some confusion because I think the number that we're talking about probably -- so I'll have to get some clarity about it because I think they've also included the clinker sales volumes in it, right? But what I can say about Q4 is that, we'll see a 10% to 12% growth in Q4 as well Y-o-Y. So in terms of cement volume, the cement volume will be growing at about 8% to 10% in Q4 as well. So -- and the numbers -- yes, the right estimate of Q4 in terms of the absolute number for the entire year, I will probably be able to write that down in the presentation that we put up online.

The next question is from Uttam Kumar Srimal from Axis Securities.

Sir, my question pertains to Silchar unit, since Silchar will get commissioned in this quarter. So Silchar is basically also nearest to Bangladesh also. So we are also thinking of exporting cement to Bangladesh?

No. Right now, we are not considering that because I think the transportation to Bangladesh is a bit tricky. There is no direct road which connects Bangladesh and Silchar side. And normally in rainy season, barges are used to transport, and that is also not very near the rivers. So we are not right now planning to sell in Bangladesh from Silchar. And also Bangladesh has a custom duty on cement, which is almost -- I mean, there's almost like INR 2,000 per tonne of custom. So, I mean, there's no economic sense of sending cement to Bangladesh anyway.

Okay. Okay. And sir, what was the capacity utilization for Siliguri plant this quarter?

This quarter, our utilization of [ HU ] is about 60%. And I think we'll be able to utilize our plant in Q4 at about 70% to 75%.

The next question is from Milind Raginwar from BOB Capital Markets.

Just confirm Silchar, GU we are expecting by -- what would be the time line for Silchar and Jorhat revised one?

So the time line for Silchar is this month. I think by end of this month, we will be commissioning our plant. So between 20th to 27th is when we think of commissioning the plant. And Jorhat would be -- I think we have deferred Jorhat and we have preferred to put in Bihar rather than Jorhat. So Jorhat may come along with the clinker plant in Umrangso.

So as of now, Jorhat remains replaced by Bihar?

Yes.

So there is no GU now in Jorhat, right?

No. So there will be a GU, which will come along with the Umrangso plant, but not right now, it will take about 3 years, 3.5 years because right now, since with the Silchar capacity coming up, I think we'll have sufficient capacity in Northeast to serve Northeast market.

Okay. So in that case, we will have 9.6 million long capacity in Northeast on the GU side? I mean, including GU, that is a total cement capacity. Is that a fair assumption?

Yes. So it'll be 9.7 million, 2 in Siliguri and 7.7 million in Northeast.

Correct. And this will be backed by about 6.1 million tonnes of clinker.

Yes. So this is broadly in broadly clinker of this capacity.

Okay. And so then the Bihar GU, we will be packing by the existing clinker only or it will only come after the Umrangso plant?

So we will be putting up the Bihar plant before Umrangso also because it will take lesser time than Umrangso, and it will help us utilize the clinkers of the existing units faster. And with Umrangso, we will be putting the Jorhat plant.

Okay. So till that time, Bihar will be fed by Meghalaya clinker unit. Is that a fair assumption?

Yes. And that will also help us utilize it faster.

We have one last question. We take the last question from Shravan Shah from Dolat Capital.

Sir, this clinker sale, whatever we are selling 5%, 6% of the total volume. So this will continue for even next year also?

Yes. I think we do expect that clinker that whatever we sold in quarter 3, that's kind of a volume to be sold every quarter.

Okay. Okay. So currently, if I look at 9 months, our CC ratio broadly is 1.32 versus normally, we have closer to 1.5. So it is that in the fourth quarter, we will catch up. And on a full year basis, the broadly 1.5 CC ratio that remains...

Yes. I think right now, our clinker ratio is about 67.5%, which is -- I mean, if I convert in the way 67.5%, 1.48. It's coming to be about 1.48 only.

Okay. Okay. Okay. Got it. Okay. And in third quarter, broadly, if we have to look at Northeast versus East for us in terms of profitability, still it will be the East would be INR 500, INR 600. Is that the number which we used to have the similar still is that?

Yes, I think the EBITDA per tonne that we earn in East is about INR 600 to INR 700. And I think with some price betterment, I think it can reach to about INR 800.

Okay. Okay. Okay. Got it. But post the Rajasthan expansion, so if you can direct -- difficult to predict right now, but still directionally till what level are we comfortable, obviously, because Rajasthan, once the volume will start, the EBITDA per tonne definitely will not be as like as Northeast. But roughly, are we looking at kind of INR 800, INR 900, that's the kind of profitability per tonne that we are looking for Rajasthan?

Yes. So I think our modeling in the steady state expects it to be more than INR 1,000, INR 1,000 because it also depends on how you -- where you put up your plants and how efficient your plants are. So our expectation in the long run is about INR 1,000 and stable low. Initially, of course, EBITDA will be low because we'll be ramping up and spending on branding as well, so the EBITDA per tonne in Rajasthan will be lower because of that.

And there also, we will be having incentive in Rajasthan also?

Yes, we will be having an incentive -- a capital subsidy incentive as per the policy of the Rajasthan government.

Which would be roughly on an annual basis or per tonne, any broad idea?

That we are happy to -- it is about 23% of the CapEx as a capital subsidy. So it's not a GST capital subsidy.

We have one last question in queue. It's from Siddharth Mehrotra from Kotak Securities.

Sir, just wanted to sort of get your views on the upcoming capacity expansion in North. So I mean, I was just looking at the numbers, if we add in your 5 MTPA expansion as well, I'm looking at almost a 50, 55 MTPA expansion in just the North region. So I mean, are we sort of going to see a very aggressive supply situation in that geography? And if yes, how are we going to counter the incumbents already who have a legacy system there? So that's sort of -- I just wanted to get your broad thoughts on that, sir.

Yes. So I think the Northern markets, I think, over time, have basically broadly maintained a decent utilization, right? So I understand that there is -- there are 2, 3 companies like JSW, Dalmia and other companies which are entering North now, and that may lead to excess capacity. But I think the tendency of North has been -- North has generally had more decorum than other areas in the mainland India, right? So I think -- and our strategy is quite simple. We're not entering with a very large capacity. Actually, we have an integrated plant of 3 million. And shortly after we commission that, we'll be commissioning our grinding unit in Haryana, right? So the capacity that we enter is not huge. And what we would target to do is to maintain and to create a brand, like how we have created our brand in Northeast, and we sell higher than any other brand in Northeast despite being the highest volume player in Northeast. We would want the same kind of branding and patience in terms of marketing in North as well. So that is how we plan to go about it. And I mean -- yes, and just make sure that we are able to position ourselves through branding and technical services and other things at a good price band compared to our competitors.

Understood, sir. So we definitely will not be compromising our margins just to sell volumes in that geography, if that understanding is correct, right, sir?

Yes. I think more important, like especially if you're entering a new area, it is more important. I mean, it is, of course, tempting to sell more volumes, but it comes at the cost of putting yourself at a lower price band, right? So we'll have to make sure and have the patience and the will power to create a brand in the long run and not -- and discounting and selling and just trying to get done with the volume is not the answer to that.

Got it, sir. And just one last question, if I can squeeze in. Sir, what is the cost of our limestone in the Northern region, sir? Are they legacy mines? Are the newer mines?

So that, I think we have an auction mine. The average premium of the auction mine is about 57%. This is for Nimbol. But we are also looking at legacy mines. So we're confident that we'll probably be able to lock 1 or 2 legacy mines. If we do that, then, of course, our cost for the initial 10 years will be 0% auction, right, because they are legacy mines. So I think that is what we're trying to do. I think by the next call, I'll have better clarity and probably we would have locked the mine, and then I think I can talk more about it.

That was the last question in queue. I would now like to hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital India Private Limited for closing comments.

Tushar, I just had a couple of questions. So first thing, were there any one-offs in the cost apart from the freight in the Q3?

Yes, pardon, what you are saying, Vaibhav?

Sir, were there any one-offs in the cost items in Q3 apart from...

INR 5 crores donation is there, okay, one-off cost is there.

Okay. And this donation is to any political party or like what?

Yes, it's a political donation, yes.

Okay. And apart from that, there's no other one-off, right?

No, no.

No.

Okay. And sir, second thing was I just wanted to know that Tusharji mentioned on the call about INR 1,000 steady-state EBITDA guidance in North operations. So, Tusharji, when I met you, we had discussed that you had kind of highlighted that INR 1,300 to INR 1,500 or sustainable EBITDA even after your expansions. That is your forecast. So this INR 1,000 you are mentioning as on date or you are mentioning once you enter, so slightly confused. So I wanted to clarify that.

So the question that -- am I expecting INR 1,300 or INR 1,000 in the long term? Yes. So I mean, it really depends like I think the question which was asked earlier, if we are operating legacy mines versus auction mines. So I think the answer just really depends on all those things. I think in the next call, we'll be in a better position to answer. I mean, ideally, in the steady state, I think all the cement companies should be earning INR 1,200 given the investment that we make. But I think for our case, depending on the legacy mine, we'll be able to better explain what we are expecting in the next year.

So I just want to clarify, so your earlier guidance, which -- when I interviewed you and which you gave INR 1,300 to INR 1,500 EBITDA per tonne on a sustainable basis for Star Cement as a whole, that holds on, right? That is your expectation as of now. Just wanted to confirm that.

Yes. I mean, if you're talking about Rajasthan or are you talking about Northeast?

Overall, overall, I'm saying Star Cement as a whole. So the question was asked to you was what was the dilution you're expecting profitability once you enter new markets? And that time you answered that INR 1,300 to INR 1,500...

Yes. I think going in the future, I think we do expect like INR 1,300 to INR 1,400 to be the range for Star Cement. Specifically the North, I thought you're asking specifically for North...

No, no, I was asking -- so I was asking after the North. So if you're saying North is INR 1,100 EBITDA per tonne. So broadly, your guidance of INR 1,300 to INR 1,500 holds on or that is kind of different.

[indiscernible] broadly.

That's what my question was. Tushar, and on behalf of PhillipCapital India Private Limited, I'd like to thank the management for the call and also many thanks for participants for joining the call. Thank you very much, sir. You may now conclude the call. Thank you.

Thank you.

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