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Birla Corporation Ltd
Earnings Call Analysis
Q2-2025 Analysis
Birla Corporation Ltd
In the recent earnings call, the management of Birla Corporation expressed a cautious optimism regarding their market position, especially in light of prevailing headwinds. The company's approach remains focused on stability, asserting a strategy of maintaining solid ground rather than seeking aggressive growth through risky maneuvers. The management highlighted the ongoing challenges in the cement industry, emphasizing a measured expectation for volume growth. For the second half of the fiscal year, they are projecting a year-on-year volume increase of 7% to 8%, while the total annual volume growth is anticipated to be around 3% to 4%.
Birla Corporation expects a significant uptick in EBITDA, projecting an increase of INR 150 to INR 170 in the second half compared to the first half, which stands at approximately INR 530. This guidance reflects their continued efforts in cost management and operational efficiency. Specifically, the management indicated that about INR 70 of this increase would stem from cost and efficiency initiatives, while the remaining would be tied to price increases and improved market conditions. Despite these positive indicators, they remain cautious about overly optimistic scenarios.
The company outlined its strategy surrounding market incentives, focusing on their Mukutban operations, where they have booked an incentive of INR 17 crores in Q2. They guided for a total of approximately INR 100 crores in incentives for the full fiscal year. The management also noted the expiration of previous incentives at their Kundangunj facility, which they hope to restore within the upcoming year. The management stressed their commitment to not compromise their brand integrity in favor of increasing volumes, indicating a clear focus on maintaining quality within the trade segment.
The CEO mentioned ongoing issues such as delayed government funding for infrastructure projects, which has affected market demand in key regions such as Uttar Pradesh and Madhya Pradesh, particularly following a period of elections. They cited these delays as impediments to recovery in demand, signaling that both monetary availability and seasonal factors have intertwined to suppress consumption levels historically seen during this period. The management is hopeful that the upcoming harvest seasons in these regions might improve market conditions.
As they look forward, the company remains cautiously optimistic about price stabilization, noting that despite a period of price decline, recent trends suggest a possible recovery. They emphasized that while there may not be significant price improvements expected in the near term, they foresee demand returning post-harvest, which traditionally aligns with an increase in construction activities. The management shared that they are closely monitoring trends in both trade and non-trade pricing, expressing hope that improvements in non-trade segments could positively influence trade prices as well.
To summarize, Birla Corporation's earnings call reflected a cautious yet strategic approach in navigating current market challenges. The company is set on maintaining prudent operational practices while preparing for potential recovery fueled by market stabilization and seasonal demand. They aim to enhance operational efficiencies and profitability, ensuring a focus on their strong brand equities amid competitive pressures. Investors should look for the company’s ability to execute on their projections of volume growth, EBITDA improvement, and the management of external factors affecting operations.
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Ladies and gentlemen, good day, and welcome to the Birla Corporation Q2 FY '25 Earnings Conference Call hosted by HDFC Securities. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Rajesh Ravi. Thank you, and over to you, sir.
Thank you, Sajal. Good afternoon, everyone. On behalf of HDFC Securities, we welcome all of you to the Q2 and H1 FY '25 earnings call of Birla Corporation. From the management side, we have Mr. Sandip Ghose, MD and CEO; and Mr. Aditya Saraogi, Group CFO.
I now hand over the call to the management for the opening remarks, which will be followed by Q&A session. Thank you, and over to you, sir.
Thank you very much, Rajesh. Good afternoon, and welcome to everyone. It's rather heartening to see we have almost 100 or a little over 100 now, gets available despite what should I say, not so encouraging results. So that's a matter of encouragement for us that all of you, therefore, stand by our comments and communication. And we have been in the past tried to be as realistic and as to the best of our judgment, portray what we see the market and our company's prospects are. And that's how we would like to approach this particular call as well in talking to you. Normally, probably when the results are not so good, people say much more to explain, but I wouldn't do that. We have explained our stuff in the -- whatever we have to say in our press release, which most of you would have seen.
All that I'll say is we recognize the market reality, and we saw the headwinds. And our strategy is in that sort of a situation to keep our head down back to the -- play with a straight back, stick to the wicket, hold your ground rather than try to do any or try any kind of trying any helicopter shots or anything of that kind. And that's how we would like to navigate in the days to come as well. Because -- we remain, as we have stated in the press release, cautiously optimistic. Though I have seen many people expecting a huge upturn in the second half of which almost a month is already over. So that leaves 5 months and people have expected -- some have talked of a massive upturn. While we definitely see things improving, on both price as well as on volume and demand front, but we are not painting an extremely bullish scenario.
We have projected our second half in terms of volume increase and about [indiscernible]
Y-on-Y basis, there is H2 volume.
H2 volumes, we have looked at second half about year on Y-on-Y basis, 7% to 8%, and that's how we'll stick. And for our entire year, we are looking at about 4%,thereabout plus or minus, and that's what we think is realistic at the moment to assume.
In terms of EBITDA, we are again looking at between first half to second half. We have projected about -- between INR 150 to INR 170 upswing in the EBITDA format. And that is how we see it translating. We don't see -- again, are going to add some market indications. People have talked about getting only through realization people have talked about getting INR 200 gain by realization alone, we don't see that in such an optimistic scenario. So we have taken our all told, given our cost -- continuing cost efforts to reduce cost, increase our geo-mix and everything else. We have projected about INR 170 as I said. And that is all that we would say by way of guidance at the moment.
And the rest of it, we remain consistent with our strategy in whatever we have been doing. And our approach would be to -- we have had sort of -- in our older plants, our 4 markets, we have had a little slip in terms of capacity utilization, and I'll explain why that has happened. And we would -- what we really look forward to is to be able to take our capacity utilization up in those plants to over 100% as we had been doing or close to 100% in our -- especially in our Central India plant. And Mukutban, where we had achieved a very good ramp up and scaling up, and we hope that the pricing scenario would allow us to, again, get back to the same kind of levels of about 60% -- last year, what does that be
[indiscernible] for the last week.
No. Towards the end, we were almost operating at about 60%. So that is the kind of level we would like to get back to, hopefully, with the demand picking up and if there is a slight upturn in prices. So -- in the West, especially Maharashtra, we have been circumspect because of the elections, which have been announced and that impact will continue for about a month at least. And whichever government comes in by the time they settle in new funds are sanctioned, et cetera. I think we will get into at least January there.
In our core market, we are also factoring in the Maha Kumbh, which is going to happen in Prayagraj, that's once in a 12-year event, as you know, and that entire area, the logistics get impacted. So that will also something which will eat in to the peak season period of January, February, which is usually there. So we are being cautious on that count as well. But the real pain point in the last 2 quarters has been, in our judgment, in our view, has been the non-trade sector.
If there is any impact, one -- everybody talks about consolidation in the industry, if there is any, I think, visible impact of consolidation. We have seen that happening in the non-trade sector, where the prices had crashed, come down very abnormally or unrealistic levels in the last quarter, especially and in the markets where we operate in North and center. We are not -- we were never major players in the non-trade category or OPC category.
As you know, historically, we have tried to keep our non-trade levels to below 20% and our OPC at below 15% of our capacity over there. Now because of the whole market dynamics, the trade sector or the individual homebuilding sector since they were not as buoyant in the last 2 quarters, as all of you would have noted and seen there has been a major market shift towards non-trade. And because of the market shift towards non-trade and also OPC component -- I'm talking this I'm talking about the industry as a whole, not about us. So since the market shifted towards non-trade and also OPC. And overall industry capacity utilization came down by a couple of percentage points by our reckoning or whatever figures which are available from the analyst reports which are coming out, there has been a shift in that direction, and they were price drops very, very significant, which means it unviable for us to be participating in the non-trade and OPC segment in many markets.
Especially in Rajasthan, where things dipped, as I said, to very abnormal levels in the pricing of non-trade and OPC. Similarly, in UP, in Bihar, things and people who are participating. So we deliberately chose to keep our exposure limited there because we certainly didn't want to operate at a variable cost loss or a cash loss to be in those markets. And that has resulted in our slightly lower capacity utilization than what we are capable of and what could have done, and we have not certainly tried to push volumes. Unnecessarily, we should have hurt both us as well as the industry. We try to be prudent in that. But we hope from whatever we are hearing if the non-trade prices if people are -- if there is more, I should say, rational pricing and market things happen in the non-trade and OPC sector, that will have a positive or above in the trade sector as well, and that should benefit everybody, and that is where -- which we see as a silver lining going forward.
Finally, coming back to summarize, as we said, we are looking at second half in a very sort of a positive. But in -- with a great deal of realism pragmatism. And therefore, we are commenting our growth for the entire year, we are talking about, as we said, around 4% in the volume growth. Annually, we are talking at about 8% to 9% or around 8% is the growth. We've talked about the EBITDA increase, which is around INR 170 is what we are guidance, which we are giving just now for second half, the increase between first half to second half.
And with that, I will rest my introductory remarks, open up for questions, and we'll be happy to wherever we can elaborate further or comment and -- or where we can't, we'll be very honest and frank enough to tell you our situation.
The one last one which I missed, which is mentioned in our press release is our progress of our Kundangunj third line is going on satisfactorily and on track. And we hope when that comes in, next year, we will have some of the incentives, which we lost because of Kundangunj incentive getting expired last March will get restored. And between that, and we have already started clocking in incentives from Mukutban. Between these 2 will be kind of back to a level playing field that what we were pre March 2024. So that's how we'll -- the only other major significant change which we see.
Some of our competitors have the advantage today of having incentives, especially in UP, which is enabling them to participate much more aggressively in the non-trade segment or even the OPC segment where they're doing. We are constrained there. Now that, as I said, our intention is not to sell more OPC or more non-trade. We would like to remain in the trade segment where we feel we have very strong brand assets. Our brands are today very well accepted, especially Perfect Plus and Samrat has always been heritage strong brand in UP. Chetak is a heritage strong brand in Rajasthan. And our distribution system, which we have our distribution assets, go-to-market assets there, very strong in our core markets. So as soon as market bounce back, we hope to be back again on the driver's seat as far as the trade and channel sales are concerned. Thank you.
[Operator Instructions] The first question is from the line of Shravan Shah from Dolat Capital.
Sir, just a couple of data points needed. What was the incentive that we book for Mukutban in Q2? And if possible in third and fourth quarter put together, how much are we likely to book the incentive for Mukutban? And also the volume for Q2 if possible?
I let Mr. Saraogi answer that.
So in Q2, we have booked incentive of INR 17 crores for Mukutban, 1-7, Okay? What was the other question?
How much more in the second half we are likely to book and what was the volume of Mukutban?
We had guided for total incentive of about INR [ 100 ] crores for the whole year, we are standing by that guidance. Okay? [indiscernible]
Okay. And what was the volume in 2Q and the lead distance in for second quarter?
The volume was 50,000 tonnes, and -- 5 lakh tonnes and the lead distance was around 340 kilometers.
[indiscernible] Distance for the full entire company.
For Mukutban, it was 425 kilometers, for Mukutban.
You're asking for the entire company or you're asking for Mukutban?
Entire company, sir.
For entire company, it was around 350...
Okay. Okay. And last, sir, just a clarification, this Prayagraj, 1.4 million tonnes, when it is likely to start?
Q1, we are
We are talking about Kundangunj.
Yes, that is that we know. But on the Prayagraj, 1.4 million tonnes when it will start?
No, that we will announce. We have not announced commencement. It is in the pipeline, but we probably starting, we will announce whenever we are ready for it.
Okay. Okay. Lastly, possible the CapEx for full year, INR 800 crores, we said and we have done INR 200-odd crores. So any downward in the CapEx?
CapEx for the whole year, we expect to do about within INR 700 crores.
The next question is from the line of Jyoti Gupta from Nirmal Bang Institutional Equities.
Sorry, before you go on, just one clarification for Dolat Capital. What we are saying is our first unit, which will come on stream is Kundangunj. Prayagraj is in the pipeline, but we have not commenced construction there. So we are not committing the date when it is going to come in. It is also linked to certain other things. So right now, what we are focusing on, what we have visibility and committing is Kundangunj. It should not be read as a Prayagraj is not happening. Prayagraj is very much as part of our plan, like a few other locations of branding on it, which we have announced, but we talk about this specifically only when we have started the project broken ground, and that is where we stand as far as Prayagraj is concern.
So in the second part, you said your EBITDA will improve by 170. Just wanted to have an unifying terms of cost, where do you see the cost? And what kind of cost rational improvement you'll see from project shipper in terms of numbers from Mukutban and MSE and your logistic optimization. What kind of numbers are building in the second half on these 2 projects? In case of...
In the second half, we are expecting efficiency of around INR 70 a tonne. [indiscernible]
Each -- as you taken to rather INR 70?
It included INR 70.
And INR 100 will come basically from raw material and the volumes on the
Volume guarantee is a cumulative effect of realization, cost optimization, efficiency improvement everything.
Okay. And I could see that you are not very positive, quite cautious on the second half, but obviously, first. So how do you think the -- any particular impact apart from the non-trade segment that you see is coming from the consolidation -- impacted like adverse impact from the consolidation in your core markets, apart from non-trade, which has taken a downturn by INR 300 decline [Foreign Language]
So we are not seeing any impact there. As I told you, it's a function of -- we are luckily, Jyoti, given our capacity, as we said, we have been operating at 100% capacity, and we would be very -- we don't see that as a problem. And I talked about in those core markets, touch wood, fingers crossed. We have very strong brand assets. We have got very strong go-to-market assets. Today, we can say with great deal of -- with some degree of, I think, price in terms of our people strength. We believe that the branding of the company has gone up significantly, at least from how we see interest of people, especially in sales and marketing, to come and join us at various levels today.
So I think we are quite well placed to take on the market opportunities as soon as there are some tailwinds of which come in and then the market table improves. I can't -- deliberately talked about the non-trade because that's an area where we don't participate, and that's where an area -- we are limited players participate in a limited way. And certainly, it is not OPC. It's not our preferred product. We don't like to do that. But when those segments come down, there is -- obviously, there is an impact, a spillover impact on the trade segment. So I am taking a hope or encouragement from certain announcements which are here in the market where people are talking about increasing bottom line contribution through realization of INR 200. I expect some of that will come through the non-trade and the OPC segment as well, which should auger well for trade and the blended cement segment, where we are major players.
Okay. Sir, anything that we expect from the Orient -- the acquisition of Orient cement --
We don't operate in that market. We are very small operators in Telengana. We just -- we'll just watch it from the ring side. We are on the other side of the fence, they're sitting in Maharashtra.
The next question is from the line of Prateek Kumar from Jefferies.
A couple of questions. Firstly, on your premium segment, which is like very high overall mix. So when you say that the price of the trade segment like sort of gets impacted by non-trade. Is the premium segment also gets impacted like how is the difference like sort of changes?
See premiums don't exist in isolation. Premium, you are always -- when you're talking about premium, you're talking about a base price. So if the base price drops, obviously, when the delta might remain similar or may delta may marginally grow increase. But overall, in the price table there is going to have only so much of a difference between what's happening in the non-trade and the trade. So our premium, we consider that to be a competitive advantage of this company. As I've said in the past, that we are one of the few or perhaps the only company where I can say with some degree of pride who struggles almost equally between the premium and the popular segment. I don't call it popular. I call it the value segment.
So between the value and the premium, we operate almost on equal footing. So to that extent, we are able to calibrate some of our shift. So therefore, in this quarter, you'll see when part of the realization which we have delivered, why we have been able to keep our realization higher or the drop lower than the market drop is because we have been able to shift volumes towards premium in most of our markets. That's how our premium volumes have increased. But we don't see any absolute virtue in either premium or value segment. We will offer what the customer wants. And so if the value segment again picks up when I'm upping my capacity utilization, not all of it will come from premium, it will come from value as well because that's a very important segment of the market. You cannot -- you don't operate right at the top end. You also the middle matters. And if we would like to be present everywhere.
Sure. One other question on incentives. The guidance for INR 100 crores incentive in FY '25 compares to INR 160 crores or INR 140 crores to INR 160 crores in the past 3 years. Is that right?
Yes. Yes. So obviously, the delta between what we were getting in Kundangunj. And this period, especially '24-'25, you will find that as a gap. Because Kundangunj has stopped from 1st of April. And only Mukutban is what has come in its place. The Mukutban incentive are lower than what we were getting in Kundangunj. So there is, therefore, that is where we are seeing the 160 to 100. That is the kind of gap which you are getting. Hopefully, next year, as we go on commissioning Kundangunj Line 3, that will get restored. So you'll find us back. As I said, it will be a kind of level playing field once more between the 2 places, we will go back to our original levels of incentives in the country.
And the last question on your comment earlier regarding Orient cement, you said you sit on a corner of the other.
We sit on the other side of the fence because we are in Maharashtra. They're mostly in Telangana and the South. We don't operate in that market much, in their core market. Even in Maharashtra, they are much more in the Western and the lower parts of it. We are concentrated in Vidarbha, where they have a very modest presence. And so we'll have to see how it pans out post their -- the acquisition because I've been reading just like you, a lot of analysis because if you were to look at Adani as a combined team. Adani already has a presence in those areas. with their own brands of Ambuja and ACC. So how much it is Orient going to add to their presence, it's not easy having brand integration. What will be their brand strategy. We don't see Orient really affecting us significantly as per their existing operation. In future, I saw that they have got lease in Rajasthan. If that comes up, how that will pan out or recently, they had -- I saw they're tying up on from flyash in Madhya Pradesh, in Betul area. All those -- those are in future. But similarly, they had a grinding on its plant in Maharashtra, which they gave up -- their tie-up with Adani maybe since this was - that has come. So those are futuristic. But as on today, Orient and we don't have much of an overlap.
The next question is from the line of Saket Kapoor from Kapoor & Company.
Sir, as you mentioned about INR 100 crores being the total incentive number that we are factoring in from Mukutban. How much actual cash have we received for the first half out of the INR 17 crores or the entire balance is also pending?
See, INR 100 crores as far as the company is not fairly focused and there is some small incentive in some other others units also. In the first half, we had received around INR 120 crores from
It's not from Mukutban, boss. You don't -- these incentives don't happen hand in hand. [indiscernible] you get -- like today, I believe you are getting income tax response immediately 24 hours. It doesn't happen in subsidy.
It comes with a lag.
Yes, yes. So what is the closing balance, sir, other than whatever we have booked at incentive, how much is still left to be receivable -- in the receivable account?
Excluding West an all, [indiscernible] -- it is about INR 450 crores. And in fact, in West Bengal also there's been a development in the quarter. The state government has filed an appeal against the high court order, which had decided they might not favor. So that matter has also been dispensed prices to So frankly, the stage government does not have any [indiscernible]
Sir, can you come again. INR 450 crores is the figure you mentioned that is still left to be receive --
Total, receive I just say, what is the receivable on account of incentives from various governments as on date is INR 450 crores.
Excluding West Bengal.
Excluding West Bengal, where we have additional amount, which was under -- which was subdued because the government had contested it. And that contest has been disposed of by the Supreme Court. So the ball is back in West Bengal government's court. And they will have to -- when they settle it is a different matter. So excluding that, this INR 450 crores, on which is -- we see the timing issue and not any dispute issue.
Okay. Can you mention that figure also, which is under dispute litigation from the West Bengal government?
Around INR 140 crores.
Around INR 140 crores. And now we have an upper hand because of the disposal by Supreme Court?
Always on an upper hand. We were always on strong grounds. Not a question of any upper hand, lower hand. But nothing under hand.
Sir, it for the capital work in progress, is it closing in a the any
Question, Saket, I told you you're in Calcutta, you can't take advantage of so many questions.
Sir, last question, and then I can come in queue? [Foreign Language]
So you don't monopolize. Go ahead.
Sir, obviously, the closing balance for capital work in progress is INR 558 crores. With Mukutban -- sorry, with Kundangunj, they are getting of a slide by first quarter, what will be [Foreign Language] current year? And for Kundangunj, how much have we spent as of now?
I can give you this figure offline. You can connect Secretary always, please.
Okay. sir. I joined the queue. And also, sir, in the press release, the update for coal mines are not mentioned, sir. So if you could give some color on
We're expecting to cash the vestment of operations from Q1 of FY '26.
And we are still expecting coal [Foreign Language] Currently, one of our coal work is operational, I think so. So we are expecting
Yes, I don't see where we are expecting as per the capacity of the block. This is around 2,50,000 tonnes on an annual basis.
The next question is from the line of Mangesh from Centrum Broking Limited.
Sir, my question is regarding demand in UP and MP. So I just wanted your views in terms of how much there could have been the demand decline in this quarter on a Y-o-Y basis? And was it only because of monsoon and election after And when do you expect the recovery in the same?
Mangesh, we cannot give you exact other estimated figures, those figures of market decline, you will get it from the analyst figures because today, there is no published data in that regard. So we would not like to comment on that. But in terms of causes, it is also money availability because a lot of fund release from the government have got delayed in many places or they've got -- government has other priorities, gone for different schemes in different places. So some of the fund release has been an issue in both these markets. And that is what has probably delayed some of the state level development work or development expenditure, which happens because money has probably got more to welfare schemes and other stuff. There has been no elections, as you know, in MP and UP in the last 6 months. So that is the overall situation.
Okay. Another question was on the pricing front. So we feel that our pricing post August has improved marginally. But what is our current realization compared to the exit of September? Is there any improvement?
I don't think there is any significant improvement Mangesh. This is more or less, it -- One has not really seen any consistent improvement or improvement sticks. And I personally don't expect to see any very significant changes between now and at least till mid-November.
Sir, final question to Saraogi ji. So given that we would have a very weak -- not weak, operating cash flow this year because of a realization. Do we see that increasing any target or guidance on debt levels by the end of this year?
So the right level, we expect to close around INR 3,000. Net debt, we expect to close around INR [ 3,000 ] crores. Like our cash from operations has been less than what we budgeted. And we have also scaled on our CapEx. I think the area we have guided for INR 1,000 that also that also we have got [indiscernible] So we are celebrating our outsource also according to
The next question is from the line of Rajesh Ravi from HDFC Securities.
Two questions. First, the margin guidance for second half INR 170-odd which you're looking up -- looking forward to. First half, we have done close to INR 550. And even if we add up the INR 170. Full year margin would be [indiscernible] INR 26, INR 30. First half, we have done 535 and second half, you're looking at INR 170. So close to 700-odd. So the full year revenue would work out to be INR 620 versus INR 800 we are turning FY '24. Are you not building any price improvement in the second half?
Of course, we are building in, Rajesh. As we said, INR 170 is not going to come purely from cost savings. Our cost and other initiatives as we indicated, will probably give us about INR 70, and this will come partly of price and a few other things as well. But we are not being bullish enough to say that we are going to get INR 200 into the bottom from price alone. We are positioning about -- because price increases are to get INR 100 between now and March end, that's an average.
Correct, sir. How you price it before
So average to get there even if you would -- I don't want to get into showing you back up the envelope calculation, you see how much it can peak. And it's a regional factor. Others -- I'm not questioning other people's projections. They could be having other regions in mind. We don't operate in the South, where they may be having more. I am looking at our specific market, Maharashtra. I told you, I see Maharashtra, I've been cautious in Maharashtra because of elections and the post-election impact because it takes a little time for -- again, government to settle down, monies to come out.
Maharashtra also, there are various sales fields and all committed. So I don't know how soon monies will come and how much impact that will have on the demand and the pricing. Similarly, I'm being cautious. Our core market is East UP. And the peak season where all of us look at are spurt in volumes and prices is usually, as you know, in this industry from second week of January to February middle. That's the real time when you find historically, cement prices go up sharply. But that's the time when we are going to see UP some major dislocation, okay, with the Maha Kumbh and everything else. And that end movement becomes an issue and various things.
So we are being -- perhaps you might say little extra cautious, but we'd rather be conservative than equation come back to you cutting a sorry pace mix when we speak in 3 months' time.
Sure. And on volumes, any thought process, what sort of growth, due to which layers in that
We mentioned that, Rajesh, we are looking at second half about around 8% -- 7% to 8%.
And last question, sir, there is 2 -- large investment sitting on your books Century textile cumulatively felt approximately INR 700-odd crores value. So is there any thought to the management of the promoters have any willingness? Or can this be by sold off? And used to reduce debt or for some of the efficiency programs?
There is no embargo in series investments. We have a mandate by the board. We can sell these investments whenever we want to. These are nonstrategic investments. But this is not sell these to settle or reduce debt. So we feel that we can deploy these proceeds from sale of these investments are into a seductive asset, which can yield that those type of things -- at that point of time, we'll consider.
Okay. So because you do this major expansion also, so this could come handy.
It could come for various things, Rajesh. This is -- we would do at a time of our choosing and in terms of the opportunity. Since you have been associated with the company from a very long time, you know that we were sitting on a fairly large treasury balance for a long time until we made our Reliance acquisition. So we did it when the right opportunity, when we felt it was right in our prudence similarly data call on that. But we don't have any compulsion right now to dilute our debt by selling this. That is certainly a question we can tell you categorically, that's not in terms of our plan.
The next question is from the line of Ray from Yes Securities.
Seeing getting incentive are the additional money makes sense and it is really adding to the profitability. But in terms of core business, so if I see in fourth quarter FY '24, we have done an EBITDA per tonne of around 974, which is pretty good. And significantly, I can see first quarter, second quarter, there is a fuel decline, even in fact, second quarter FY '25, we saw around 50%, 60% of decline from fourth quarter, if I compare. So do -- again, fourth quarter will be a volume-driven quarter. Obviously, volume is higher, then again, your EBITDA return will come down. So my question is that, so what kind of projections we can go ahead for fourth quarter FY '25 EBITDA per tonne? Is this in March, we can see somewhere in between INR 700 crores to INR 800 crores? Because price, again, I do not see much price kind of appreciation in coming near term?
That's your view. You have to take a view, and it's not also a pressure in your view versus our view you have to see the entire thing. We can only give you our point of view. First of all, when you are looking at last year fourth quarter to now, Obviously, you will agree that the drop which you have seen is not isolated for us. Already, you have seen 3, 4 companies results are declared, and we are no exception in that pattern. And in fact, in some ways, from whatever we have seen, you're a better analyst, maybe we have done a time better than other people in terms of the management of the bottom line in terms of the drop. So that being one.
Now if you were to compare -- to answer one question of your, last year -- last year was very interesting. I found a slightly odd in a way in the fourth quarter. Historically, instrument from as long as I have been fourth quarter, the surge you see is both on volumes and prices. Last year, fourth quarter was only volume without prices. Okay. There is no substantial increase in prices. There was a surge in volume.
Now this fourth quarter is a matter of conjecture, when you're talking of volumes were the volumes in isolation. If it's volumes in isolation, not just for us, others who are projecting to INR 100, wherever the INR 200 come from. Obviously, there has to come along with surprises. Now for the INR 200 with me is what other people are projecting. We don't see it coming -- we will not see it. We would not bet our horses to expect it will be that high.
So we have been conservative in this, but we certainly see a price improvement in the last quarter. And where I see the price improvement coming without getting more specific despite some of the other issues which we talked about, the elections in Maharashtra, or Uttar Pradesh, Prayagraj, et cetera. And what I hinted in the beginning, I think the prices today, real abnormal prices are in the non-trade. And if the non-trade prices pick up and people become more -- there is more rational pricing in non-trade and especially in the OPC segment. I see you immediately going to see an positive impact, a positive rub off spillover in the trade segment. And that has happened in the last 2 months also. If you see what are the areas where there has been improvement in prices, when we talk of nationally, you don't see any kind of price changes between August, September, October, but areas where there has been actually a price increase.
Say North has recorded some price increase. The North price increase has essentially come if you go through. It is some because people have corrected the non-trade prices. Before that non-trade was pulling trade hugely down. Once some amount of sanity was restored in the non-trade prices, trade picked up. Similarly, we therefore hope that if that phenomena you see across the geographies, it's not across the country. You will start seeing some impact of that coming. And so at least you will get back to normal levels. Right now, I think the prices are depressed below normal. And that will come. And once that level feel, if we come back to that by November or December end, which is entirely possible. It's just a matter of, as I said, some sanity getting restored. If that happens. Last quarter, you are going to see both volume and price increase. People are talking about pent-up demand. Pent-up demand will come with pent-up demand. Obviously, price will also go. It is not going to be just volume.
Sorry to cut you off. So you mean to say the price level -- in right now. So this is bottom out and there is no further decline in price is like I can just assuming -- or is there any kind of other -- say, there is no further decline in price and there might pay some chance in terms of
Yes, I think that will be a fair assumption. Things can only improve here. I don't see further decline happening because whatever disturbances, those are more or less done. Now Diwali over. Chhat will be over by then your new crops will come in, in a harvesting season. Money will be there in the system. All of that. Labor will return back from the Chhat thing -- harvesting and all that, people will go back. You will see -- I don't see therefore certainty scope for further slide in decline. And I repeat myself again and again, that's the only conjecture I'm making sticking my neck out. Sanitary returns in non-trade prices, which are obviously in the hands of the big players who are big players who participate in non-trade on -- especially our national accounts, et cetera, you're going to see benefits of positive wrap-up of that also on trade.
Fair enough. Sir, my second question is into premium segment. Right now, it is 71 [indiscernible]
71 what?
Sorry, 61.
Yes.
So this has improved a lot. I like it was 51 -- now it is 61.
So I wouldn't call it improvement. It will be wrong on my part to -- as I trying to clarify earlier, this is strategic. If my today, the prices have come down, -- and if I am selling below capacity for whatever reason I can't participate, I would focus, which is giving me the maximum return. So it's a combination of product mix and geo-mix. If I'm selling in markets which are giving me the geo-mix which is the best market because it's close to my operations. And in those areas, if my premium product has a greater pull, I would sell more. I've got nothing against selling anything in the value of the popular segment, okay? But if the value and popular segment, I find there is no [Foreign Language] happening. And here, I have got a thing. I would rather take the INR 20, INR 25 premium, but I don't want to vacate that segment. This is a very unique advantage this company has. I don't know how many people recognize that. We are a company where we have almost equal, we straddle between both the segments almost equally. Okay.
I truly agree with this because we are the highest premium segment sale in the industry change, and that is a good part in our company.
Both sides. Use my favorite expansion, we are a double engine company.
Okay. And lastly, what was the Mukutban utilization rate per quarter?
Rajesh, let's move on to the other one. We have given the figures.
The next question is from the line of Raj from Partners.
Sir, I just wanted to have full year growth guidance.
We have said that, boss, already. We have said
Whatever we have said that --
We repeat that. Full year growth guidance we have said in terms of volumes, you said 3% to 4%. And we have given just now, as you heard, EBITDA also we have given [indiscernible]
Sorry, you were not clear. Can you repeat it again?
I said, volume we have given already. We said that the full year volume will be about 4% -- 3% to 4% is what we have said. At EBITDA also, we have given
But H2, you can take
H2, we have told about INR 170 over H1, which is about INR 530. So you can do your average in the 2 and come to the number. Just like Rajesh did just before your question.
The next question is from the line of Amit from Axis Capital.
So just wanted to check captive coal mining theaters and when would you start the captive coal minings? And also with the pet coke pricing now having come off and [indiscernible] pet coke is now almost 1.5. What kind of cost benefits would still come in from the captive coal mines?
Captive coal mines, as you already, we had informed for Bikram. Already sale leverage in operation for which we do around 2.5 lakh to 3 lakh tonnes per annum. And for Bikram coal mines, we are going to start -- the first coal production going to start from the Q1 FY '26. And pet coke, because our only requirement of the pet coke is only in one plant only, and we have reduced the requirement of the pet coke and more on we are in the indigenous pool. And wherever there is a change in the prices, we take it into the account. And our coal prices, you can see in the last quarter is INR 1.47 per kilo And it will be -- if the changes are there, we are not seeing much of changes, maybe slight change will be depending on the prices of the petro which is going in the market now.
So in terms of the [indiscernible] is expected to be around INR 1.10 per thousand kilo cal. And ongoing way for in the central region is a between 140 and 150. So that is kind of a difference that adjust as per
Thank you very much. I think that brings us to the last question, and it's really heartening to see we are ending the day with 150 people on the call. That's very encouraging. Thank you so much for joining, taking the time out on a busy day. I see today, there were at least 3 con-calls in the cement sector. The one in the morning, one now and one after us. You took time out for us. It's really heartening. Thank you very much.
Thank you. On behalf of HDFC Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.