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Dalmia Bharat Ltd
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Ladies and gentlemen, good day, and welcome to the earnings conference call of Dalmia Bharat Limited for the quarter and half year ended 30th September 2022. [Operator Instructions] This conference call is being recorded, and the transcript for the same may be put up on the website of the company. [Operator Instructions]
Before I hand over the conference to the management, I would like to remind you that certain statements made during the course of this call may not be based on historical information or facts and may be forward-looking statements. The forward-looking statements are based on expectations and projections and may involve a number of risks and uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially from those suggested by such statements.
On the call, we have with us Mr. Puneet Dalmia, MD and CEO, Dalmia Bharat Limited; Mr. Mahendra Singhi, Managing Director and CEO; Dalmia Bharat Limited; Mr. Dharmender Tuteja, CFO, Dalmia Bharat Limited; Mr. Rajiv Bansal, President and Chief Transformation Officer and the other management of the company.
I would now like to hand the conference call over to Ms. Aditi Mittal, Head, Investor Relations. Please go ahead.
Thank you, Yashashri. Good morning, everybody. Wish you a very warm welcome on the Q2 FY '23 and H1 FY '23 earnings call of Dalmia Bharat Limited. Hope you all had a chance to go through the transcript and the results, which has been uploaded on our website, and they can be downloaded from the Investors section on the website.
I will now hand over the call to Mr. Dalmia for his opening remarks. Thank you.
Thank you, Aditi. Good morning, everyone. I hope all of you had a fun and festive Diwali with your family and loved ones. It gives me great pleasure to welcome all of you for the Q2 financial year '23 earnings call of Dalmia Bharat Limited.
Globally, we are in the midst of some very uncertain times with a mixed bag of news flowing in from across the globe. But even in this little bit of unrest my personal faith and optimism on the economic prospects of the Indian economy is very strong. While all the major economies in the world are currently facing a serious set of recession, India's sound macro fundamentals, along with our government's prudent economic policies have thus far led us to be more resilient than rest of the world.
I personally believe that the long-term story of India is intact and the next 2 to 3 decades really belong to our country, given a combination of factors, such as our demographic construct, a very large consumer base, the state of organization in the country and the China plus 1 policy. I strongly believe that for India to take advantage of this opportunity that lies ahead of it and for the government to generate employment opportunities for millions of people who are getting added to the workforce every year. The trust on infrastructure development increased public spending by the government and augmentation of private CapEx is inevitable. And rightly so, the government has recognized this. And over the years, it has increased its allocation towards infrastructure and also created an enabling environment for private investment.
All of this makes me believe that the crucial role that the cement sector is going to play in India's growth story is going to be very important. Despite the lows of last 2 years, whether it was COVID or whether it was channel at supply disruptions or the Russia-Ukraine war, we have bounced back very strongly as a sector. Hence, I'm personally very bullish on the long-term prospects of the sector and we remain committed to our long-term goal of 110 million to 130 million tons by 2031. We had also committed to an interim milestone of 49 million tons by March '24. And I'm happy to say that we are absolutely on track to deliver that on time. This has given us confidence of setting another interim milestone of 70 million to 75 million tons by financial year '27. A lot of work has already started on this, but details regarding the same will be shared in the next couple of quarters.
Over the last 10 years, we have grown at a CAGR of 15% and that too without leverage on the balance sheet and having a net debt-free company. At the same time, we have also grown our sales volumes at a similar rate, which has also led to an improvement in utilization. And even when our company has grown at such a fast pace, we have never taken our focus off from building long-term cost efficiencies, which has consistently led us to be one of the lowest cost producers in the country. Optimizing cost of production and creating a low carbon footprint is a part of our DNA and is deeply embedded in our operating culture.
Considering that the cement sector is likely to grow at 1.1x to 1.2x GDP over the next 10 years and given the likely consideration in the industry, we see the top 4 players increasing their market share substantially over the next 10 years.
Now coming to the quarterly performance. We have again delivered industry-leading sales volume growth of almost 13% on a Y-o-Y basis. During the quarter, we have also seen significant margin compression due to steep energy inflation. And I hope that the worst is behind us and with costs moderating hopefully, the margin recovery can be reasonably meaningful in the upcoming quarters. I also recognize the fact that for a company which is growing at a pace at which we are planning, we need to create a large pool of leaders who could help us navigate from where we are today to our vision.
In every phase of growth, we have made significant investments in our people, and we will continue to do that. Hence, we are undertaking an HR transformation program, which I'm personally sponsoring. Under this, we are looking at our policies, succession planning, streamlining our organization structure, the diversity of our people, learning and development and upscaling initiative, including -- and looking at incentive structures of people, et cetera. I'm personally very happy with the journey that we have achieved so far. And I think this is the time to have conviction in the future and increase our investments in India and our people, and we are going to do exactly that. I think we are -- the best for India and Dalmia is yet to come, and I'm very excited about the journey that we have set ourselves on.
I will now hand over the call to Mr. Singhi to take you through the other details. Thank you. Mr. Singhi, over to you.
I believe the management line is muted. [Operator Instructions] Ladies and gentlemen, we have the management on the call. Please go ahead, Aditi.
Thanks, Puneetji. Happy morning, friends. My apologies for a little delay. Hope all of you had great festive time, and let me, in advance, wish you a very happy new year.
Now let me start with the operating performance. Now you all have known now so far that it was a very tough quarter for the Indian cement industry, but at the same time, our company has been able to deliver a leading volume growth of 13% on a Y-o-Y basis and which has, in turn led our revenue grow by 15%. While August was an extremely weak month, there has been recovery in September, both in volume and a little bit in prices. Like what Puneetji has shared, let me again reiterate that we have been able to make our total cost comparable or one of the best in the industry on account of various cost control measures, various innovative measures our team has taken. And on that account, we are first hopeful for better Q3 also.
Friends, we all have seen the impact of energy prices, both petroleum coke and coal on overall variable costs. But to us, now it looks like that fuel prices further should go up, and there may be opportunity of reduction in power and fuel costs, if prices of pet coke or coal comes down and dollar price remains stable. Our logistic cost continues to remain one of the lowest in the industry on account of various innovations, various measures, which our team has taken with the help of technology also as well as with better sales management also.
Our EBITDA for the quarter stood at INR 379 crores, which translates to INR 656 per ton (sic) [ INR 655 per ton ]. For the rest of the year, we expect, profitability to rebound due to a combined favorable effect of sales volume, prices and then cost. With a sharp management focus, we have remained one of the lowest total cost producers in the industry. Friends, we remain committed to continuously explore levers of long-term cost savings and are implementing suitable measures that will enable us to retain our cost leadership. During the quarter, we have commercialized 4 megawatts of waste heat recovery system power and 20-megawatt of solar power, which takes our total renewable energy capacity to 129 megawatts and which constitutes 24% of our power mix.
Additionally, we have now taken the Board approval to further add 155 megawatts to renewable power. This is beyond 173 megawatts renewable power, which are on track to implement by March '23. With this, our total renewable energy estimation would be expected to reach 328 megawatts by FY '24. Another level, which adds to cost efficiency and sustainability is the enhancement of our blended cement. Our focus of last few years is bringing in better results.
And now we may say, for us, for this quarter, the blended cement percentage has been 82%, and month-by-month it should go up. What has been really encouraging is that in South India, which has traditionally been a ordinary portland cement market, we have increased our blending to 53% as compared to 47% in Q2 last year. This is testament to our effort on the ground in regards to making blended cement acceptable as well as testament to our blended cement quality. With all these measures, we have been able to bring down our carbon footprint to 467 kg per ton of cement, which, in our view, should be one of the lowest in world cement sector.
Friends, like what Puneetji has said, we are on track to achieve our capacity expansion milestone of 49 million tons by March '24. Further, in line with our vision to reach on the 110 million to 130 million ton by 2031, we have set another interim milestone of 75 million tons by FY '27. And surely, we will come out with the details in a few quarters. Over the last 2.5 years, our capacity has increased by 40% from 26.5 million tons to 37 million tons and, our teams remain firm and excited on delivering strong contribution, both on CapEx and operations.
Before handing over the call to our CFO, Mr. Dharmender Tuteja, I may like to share that we are working on in a big way on creating fuel and raw material security, like it has been shared last time also that we have now acquired one coal block and in times to come, that coal block will be able to give us fuel security for our Eastern operations.
In addition to this, we have been also working in a big way on ensuring limestone security for a large number of years, and we are happy to share that in each and every plant, we have big limestone security. Friends, we are expecting that cement industry should be able to perform better in the quarters to come. And we are also expecting better demand in H2, which may also led to better prices and better profitabilities.
Thanks for joining. And now let me request our CFO, Sri Dharmender Tuteja, to share his thoughts. Thank you.
Thank you, Singhi Ji. Good morning, everyone. Hope you all had a great Diwali celebration. On the CapEx front, we are on track for the 49 million tons CapEx by March '24. Of the total CapEx of INR 3,000 crores planned for FY '23, we have so far spent about INR 1,200 crores in H1 and are on track to spend the planned CapEx in H2 as well. With respect to incentives, we have accrued INR 61 crores in Q1 and INR 119 crores in H1.
In terms of collections of incentives, we have collected INR 84 crores during the quarter and INR 128 crores in H1. For the remaining 6 months of the year, we expect to accrue incentives at a similar run rate. The incentives receivable as on 30 September stood at INR 665 crores. On the debt side, our closing gross debt as on 30th of September stands at INR 3,287 crores, which is an increase of INR 147 crores during H1 this year. So net debt to EBITDA as of 30 September is 0.32x.
The Board has declared an interim dividend of INR 4 per share. We also continue to evaluate our investment in IEX, and we'll take appropriate call on divestment at opportune times. In furtherance of our long-term governance journey, to adopt world-class practices, we are benchmarking our accounting policies with the best in class. We'll keep you updated about any changes that get implemented.
With this, I now open the floor for question answers. Thank you.
[Operator Instructions] We have our first question from the line of Indrajit Agarwal from CLSA.
I have a few questions on the expansion pipeline that you have earmarked. So when we look at 70 million tons to 75 million tons, how important would inorganic expansion be? And on that note, are there any particular geographies that we are more keen about or want to avoid? And what is the kind of ROCs or valuations for inorganic expansion that we look for?
I would like to share with you that we always are having specific programs and plans for organic growth. And at the same time, as and when there are opportunities of any inorganic growth, we do evaluate. And we are open for any region. But at the same time that any inorganic expansion needs certain criteria. Otherwise, we are now planning for 70 million tons, 75 million tons for the next 3 years to come.
Sure. But would you think that in East, we will be restricted by CCI and Competition Emission issues, or we still would have scope, if you want to spend in East and South as well inorganically?
Let opportunity and the time come, and then we'll examine that.
All right. Sir, on the Bihar grinding unit, the land acquisition continues to be delayed. So what exactly are the bottlenecks that we are facing now, and what kind of line of sight you have on that expansion right now?
We are hopeful that we'll be able to commission Bihar grinding unit by March '24.
Sure. And my last question is on the limestone mine acquired at a hefty premium at almost 190% odd. So what kind of -- is it more banking on blending it with the existing limestone we have? Or do you think stand-alone that mine, we can be profitable by making cement -- or cleaning current cement of that mine? So what is the thought process on that kind of premium that you or the industry is seeing right now?
You have rightly said there may be a blend of limestone, which may be available. And at the same time, net new deposits come in because we also are aware that now government is quite buoyant on exposing new lines of deposit and go for auction. So wherever we have acquired limestone blocks, where there's an active premium, we are expecting few more blocks to come and that may help. But otherwise also like the cement industry would be growing at good growth. So that would be helpful.
We have our next question from the line of Rajesh Ravi from HDFC Securities.
I have a few questions. First, the housekeeping, can you share the incentives booked, received and outstanding in current quarter?
During the quarter, we have received INR 84 crores. And as of the quarter-end, we are having INR 655 crores of receivable.
INR 84 crores received and INR 655 crores outstanding. And how much was accrued in this quarter numbers?
INR 61 crores.
INR 61 crores. Second question pertains to what is the per kilo cal fuel cost in Q3?
That's INR 2.52.
Okay. And Q1, it was?
FOR Q1, INR 2.47, marginally increased because of the higher pet coke prices.
Okay. And do you see this meaningfully softening in Q3?
That's right.
Okay. So is it fair to assume below INR 2 per kilo cal?
No, not that much, but in line with the pet coke prices fall, maybe we can expect around 10% reduction, at least.
Okay. Okay. And sir, any softening in the -- will it also -- this falling full prices also will reduce your electricity generation costs?
Yes. But we have already taken actions to reduce our generation costs by moving to the grid and other avenues.
So like how much was the average cost, sir, in Q2? And what are you looking in Q3 on the electricity generation cost?
For the current quarter, it will be INR 6.90 blended.
INR 6 blended, okay.
INR 6.90.
INR 6.90, okay. And sir, this restatement of numbers, again, we are seeing that for FY '22 -- March '22 numbers, balance sheet numbers have been restated. Why is it continuing, sir?
No, no. That was done in March. It was totally...
No, no. Post March annual report even...
So that was done in the last quarter when we merged Murli and DCBL because that is retrospectively implemented from 31st March '20.
Okay. Okay. But because the date came in after the 31st March, that is why these numbers are clearing now.
You are correct, sir. And appointed date was -- for the NCLT approved order, appointed date was 31st March '20. So we had to restate the previous year numbers also. And that was done in the last quarter itself.
Okay. In Q1 end only it has been affected, okay. So we don't expect any further restatement of prior numbers hereon?
I don't think we do.
Okay. And lastly, on this 26 million tons relatively we're looking to add over the next 3 years -- or FY '25 to '27, could you give some sense of how much of this is organic -- organically we have planned for?
49 million tons, it is all due to organic and..
Right. So this is done, right?
Yes. For balance, like in fact that we will be sharing details in few quarters to come. But at the same time, it's difficult to identify any inorganic number, and that's why all these numbers are organic.
Right, that is why I am saying, these are all organic, which is on the pipeline, this 26 million tons?
Rajesh, Rajiv Bansal here. See, of all the different things, we want to be a pan India player, and so we keep looking at organic and inorganic opportunities. So that is what basically Puneet has said in the opening remarks. We have taken intermediate milestone of 75 million tons to '27, in case that we've worked out. If we see a good inorganic opportunity, which sees our vision and our strategy, of course, we'll get attracted if we feel certain pressures losing this in terms of price and all the other things. But you know at this point in time we feel how much will be inorganic and organic, it will not be possible. I think as a prudent management, we will continually look at all opportunities forwardly in terms of earnings, but we are committed to deliver 75 million tons by '27.
Okay. Great. So I was just wondering, this current plan is mostly all based on organic, right? Inorganic is opportunistic.
No. As you see, when you look at the -- when we do a strategy planning, we actually that think there could be potential market opportunity. So if it don't come up, what is the backup plan, right? So you cannot really guarantee something like that happening. We cannot say that because it doesn't mean to happen, we couldn't deliver the numbers. So it is obvious to have plan A and plan B.
We have our next question from the line of Amit Murarka from Axis Capital.
I wanted to understand on the balance sheet side, the debt has gone up quite substantially in the first half. In fact, it has gone up by almost INR 2,000 crores. And I see that most of this is actually a reduction in cash and cash equivalents and gross debt is almost stable. So while, of the INR 2,000 crores, INR 1,000 crore, I understand is reduction in value of IEX share. But then there's another INR 1,000 crore reduction in cash and cash equivalents. So could you help understand like why is it so? And I think it doesn't tally up with the cash flow statement. The cash flow statement shows only kind of INR 160 crores, INR 200 crores reduction in cash balances?
Amit, out of the total reduction, about INR 1,190 crores is because of the reduction in the value of the IEX share, and balance reduction is deliberately planned because when the interest rates are rising, eventually your cost of borrowing goes up and the yield on the treasury also drops, you know the pricing yield curve. So we kept the treasury at a moderate level commensurate to our requirements and the servicing obligation. So this was a planned strategy.
Okay. But in the cash flow statement I reached, I can't see a INR 1,000 crore increase in net debt.
It comes at 2, 3 places, cash and cash equivalents as well as financial assets. I'll just clarify on the call. In the, meanwhile we can go to the next question.
We have our next question from the line of Harsh Mittal from ICICI Securities.
Sir, just wanted to know what is the price movement from September exit in your core markets?
I would say to some extent, prices have gone up by INR 20, INR 25 in Kerala, maybe INR 10 to INR 15 in Tamil Nadu and not much in Karnataka and Maharshtra. In these markets, maybe INR 5 here and there, not much.
Okay. And sir, how much is, sir, with regard to the premium segment share sequentially?
It's 20% of trade.
20% for the quarter, and for the past quarter?
That's 19%.
We have our next question from the line of Vivek Ramakrishnan from DSP Mutual Fund.
In the middle of the CapEx plan, I wanted to know what would be our peak debt levels that you are looking at over the next 2 years, looking at '23 and '24? And is there any target metrics in terms of debt to EBITDA, something that you'll keep for your CapEx plan? That's my only question.
Yes, we had already announced in our capital allocation policy that our net debt to EBITDA will not cross to 2 is to 1, unless there is a strategic acquisition, which -- that could be temporarily deflect beyond 2 is to 1.
So if can just add to what Dharmender was saying. So if it is a secular growth in FY '27, we expect our net to EBITDA to be below 2. But as you know, inorganic opportunities don't come in a secular way. So if we get a good inorganic opportunity, for interim period, we will have the net debt to EBITDA go up depending on the opportunity, the size and the valuation. But we are committed to ensure that on all these basis, our net debt to EBITDA always falls below 2.
We have our next question from the line of Shravan Shah from Dolat Capital.
Sir, a couple of data points. First is trade share and lead distance for Q2 FY '23?
The lead distance is 308 kilometers.
And trade, sir?
Yes, trade share is 64%.
Okay. And the fuel mix?
Fuel mix, pet coke is 59%, and the rest is...
Sorry, pet coke 59%. Domestic coal is how much? Because last time, it was at I think 16%, 17%.
It's about 14% this year -- this quarter.
14%, okay. And the third question is, in terms of -- though you mentioned that mostly even if the inorganic opportunity, we will not be able to correct. Then also organically, as we have plan A and B in terms of to reach to 70 million, 75 million tons by FY '27, but in terms of -- broadly in terms of the CapEx for the incremental, from 49 million tons to 75 million tons, will it be fair to assume that close to $100 per ton, that's a fair way to look at in terms of the CapEx for the incremental capacity?
Can you repeat the question, please?
Sir, I'm asking that for incremental capacity addition from 49 million tons to 75 million tons in terms of -- let's assume if we go through the organic way, then the CapEx per ton, is it fair to assume that $100 per ton, that's the fair way to assume.
Difficult to say at the moment. Once we come out with our plan, then definitely, we'll be able to share the number.
Okay. And in terms of the FY '24 and '25 -- FY'24, the CapEx will still remain at INR 3,500 crores?
Yes, it should be about INR 3,500 crores to INR 4,000 crores.
Okay. And even if we assume nothing comes in terms of the inorganic, and though we have a target to reach that, and we will be announcing the detailed plan in the next couple of quarters, but can we see at least 5 million tons to 10 million tons -- 5 million tons to 8 million tons will be added by FY '25?
Yes, yes.
See, what I would add see, when we announced the plan for 49 million tons about 2 years back, I think a lot of people told us that you know it is too aggressive, it may not be possible. But yet we demonstrated that our execution capabilities are the best. And to large extent, whatever we commit, we deliver. Now when we have committed to a 75 million tons by Fy '27, there's a lot of thought gone behind it and a lot of dealing gone. But it's on right way to think about the plan at this stage.
But of course, growth will come every year. So very difficult to put a number of how much will be FY '25 and how much will be FY '26 because we should have to tie up and do things for every single plan that we have. But yes, as you rightly said, we'll announce this in the coming quarters on a moving basis. So -- but given our track record of having delivered good CapEx growth and good capacity growth over the last few years, I think we feel very, very confident and actually be sure of delivering the 75 million tons by FY '27.
Okay. And lastly, sir, in terms of the Murli now, how would be the utilization for this quarter, and we were looking at 60%, 65% for FY '23. So is that remains intact?
I would say it would be around -- between 55% to 60% for the whole year.
[Operator Instructions] We have our next question from the line of Ritesh Shah from Investec.
Sir, my first question was on LC3. Given we have been quite proactive on the ESG side, how do we see calcined clay actually play out over the next few years? Where is it in the process such that to be having approval? That's the first question, sir.
Yes. You know this LC3, still it has to catch up. And at the same time, the deposits for the mines of clay are at few places. So definitely, we have been able to identify at 2 places. At the same time, looking to energy prices because calcined clay also makes a lot of energy, a lot of coal. So at this moment, it may not be viable, but for long run, it may be one of the quality of cement, which would be used. So still, I would say, to make LC3 popular, it will take 4 to 5 years.
Sure, sir. That's helpful. Sir, my second question is specifically on the marketplace. We do hear price increases, but we are also hearing about tweaking of the account structure. Sir, can you provide some thoughts behind why is it happening right now? And how is the company tackling this particular variable in the marketplace?
Yes. Price and discount, they all play a very important role. So as and when we talk of any price increase, in our case, we say net of discount. So that's why when we have said that, yes, in one -- some place, it has gone up by INR 10 or INR 20, it is net of discount.
All right. Sir, I was just trying to understand how should one look at the discount structure? Like I think it's an industry-wide phenomena, wherein the companies are actually going in the right direction. So the idea was to understand why is it happening now? And how should one look at it? So we do appreciate one should look at it on a net basis. I was trying to understand the rational and thought process, sir.
I have not been able to appreciate that to what sort of discount tweak you are talking. But at the same time, what I'm saying is that when a dealer also talks about his net blended cost, then there's a price declared by the companies net of discount. And the same also comes to our books. There may be different strategies of different cement companies to further lure the dealer. So that's the marketing strategy of various companies in different ways.
We have a next question from the line of Jashandeep Chadha from AMBIT Capital.
Am I audible?
Yes, yes.
My question is related to the ongoing capacity expansion. So if I remember correctly, in the last...
Mr. Chadha, sorry, can you speak louder, please?
Yes. Is it better now?
Yes.
So my question is regarding the ongoing capacity expansion. In the last presentation, you have announced around 4 million tons of green field expansion in Tamil Nadu. In the latest presentation, although the search out 2 million tons is still there, but now it is the remaining 2 million ton of greenfield has been divided in 1 million tons each brownfield in Tamil Nadu and AP. So why -- what is the rational behind that? And also the expected capacity spend, the CapEx spend remains same despite the greenfield now being converted to brownfield. So if you can shed some light on that, that would be great.
It's a dynamic world. So considering the dynamics of the area, we had reviewed and then we have finalized that it will be better at the moment to go for one brownfield unit in Ariyalur and one in Cuddapah. And there may be a little bit change of the CapEx, INR 100 crore here and there, not big, because that both would also lead to certain extra additional infrastructure. But the point is that we go on reviewing it, and then now it has been finally concluded.
Okay. Sir, just a follow up on that, whether the reserves of limestone in Tamil Nadu, the scarcity of lime that is there Tamil Nadu, is that also playing a part in the decision to go to AP for brownfield instead of 2 million ton greenfield in Tamil Nadu?
The same limestone would be required, whether you put up grinding unit at the same place or outside the integrated unit or outside the greenfield. So limestone deposit has not played any role here.
Okay. Okay. And my second question is regarding the slag availability. We have been hearing that the availability of slag infused is a little restricted right now. So if you can shed some light on that. And also, you have said that your blending ratio will keep on increasing month-on-month. So will it -- at the currently availability of slag, is it possible to even increase -- further increase your blending ratio? So these are my questions.
So as far as we are concerned, we have set in tie ups for the slag also. Otherwise, also, we have arrangement with the steel companies and that's why, we are not facing any problem in regard to availability of slag. And at the same time, since our blending cement percentage is going up in South, where it is mainly PPC, which is mainly using fly ash, so there also we don't find any challenge.
We have the next question from the line of Sanjay Nandi from Ratnabali Investment Private Limited.
Sir, can you please clarify on the core inventory you're holding as on date or what kind of price thing will be happening in the coming quarter because of that coal thing?
Currently, it's about 70 days of inventory. And like I said -- we explained about $215 was the last quarter average rate. And currently, although fluctuating, but it's around $195. So you can expect pet coke prices will move between $195 to $205 trajectory, so marginally lower.
We have a next question from the line of Aman Agarwal from Equirus Securities.
Sir, you did mention that the -- for Dalmia, we have improved our blending ratio for the South market, which typically used to work on OPC cement. So just want some clarity, does this change or does this shift look sustainable for Dalmia or as a market in the whole?
Again with clarity?
Sir, the change that we have -- or the shift we have witnessed in the Southern market from regular OPC cement to the pozzolana cement, fly ash-based cement, does this shift or increase in blending looks sustainable for the Southern market, sir?
Yes. For us, it's sustainable because our focus on retail sales, our focus on trade sales is yielding these results. So it will go on going up.
And sir, with this change, how does the clinker ratio for the company as a whole stand now or for South market, how does the clinker ratio improve with this change, sir?
You are saying clinker ratio?
How is the clinker ratio improved for the South market or for company as a whole with this increase in blending for South market?
I'll be happy to share the overall company, and it is 1.71.
1.71, which used to be around 1.4, 1.5 at least for the Southern market, sir?
So for Y-o-Y basis, it was 1.59 for the company, and now it's 1.71, thank you.
And just secondly, if I can add another question, sir. With the upcoming renewable capacity we had just planned that 173 megawatts in FY '23 and a further 155 megawatts that you planned, what's the amount of savings that you expect from this upcoming renewal capacity?
So this renewable capacity would give us additional saving from FY '24. And definitely, the delta between the two would be INR 5 to INR 6. But then to some extent, its impact will come on interest part, interest in that.
We have the next question from the line Prateek from Jefferies.
I have just one pending question. On this renewable part, of the -- you mentioned of FY '24 renewable power, what is the WHRS we should have additional post 72 megawatts, which we have talked about for '23?
So the additional RE power, which has been approved, that is mainly in the solar, which is around 107 megawatt and 48 megawatt is wind power.
So now after we commission our WHRS, all our kilns, except one, will have this WHRS power generation capacity.
So this -- we have the 72-megawatt is a peak WHRS largely, which we may have for current operations by '23, correct?
Yes, yes.
And renewable as a percentage of total power mix will be how much for FY '23 and '24?
Currently, it is 24% consumption.
And this will scale up towards somewhere -- the next 2 year's course, this expansion which you're talking about in 2 years?
So it would be around 36%.
We have our next question from the line of Uttam Kumar Srimal from Axis Securities Limited.
Sir, my question relates to EBITDA ton. This quarter, we have reported EBITDA ton of INR 653 -- INR 655. So considering the demand and softening prices and increased revaluation, so what kind of EBITDA ton we were expecting in quarter 1, quarter 3 and quarter 4?
We are expecting better EBITDA, this is what I can share with you.
Sir, any number you can quantify, if you can?
No. As a practice, we are not giving guidance to the quarter. But as Singhiji and Dharmender were seeing, see the base thing is there's a strong demand environment...
I'm sorry, sir, you're not audible.
So what we were saying is that as far our best case, we don't give any guidance on EBITDA number, et cetera. But at the same time, you are aware that the demand is becoming better, price may also go up as well, power fuel cost will not go up. So accordingly, we are saying that we are foreseeing better EBITDA for Q3, Q4.
Okay. And sir, one more question with regard to Andhra cement. You had visits for that. So what is the current position there, sir?
Present, it is complete, this matter.
Okay. Okay. And sir, if it comes to us, so what kind of CapEx we will require for that?
Let it get concluded, then we'll share with you.
We have a next question from the line of Girish Choudhary from Spark Capital.
Firstly, if you can talk a bit on your Northeast...
Mr. Choudhary, can I request you to speak louder, please?
Yes, Mr. Choudhary.
Is this better?
Yes.
Yes. So firstly, if you can talk a bit on your Northeast operations, like how is the capacity utilization, demand and pricing? As a follow-up, you're adding around 1.5 million ton in Northeast, so that's like a 40% increase to your capacity. So how do you see this ramping up?
I would say there is a good growth in Northeast, not only in cement demand, but overall GDP also as well the projects which are lined up, the capacity which are lined up, both of central government and state government. And accordingly, the commitment that Northeast, particularly Assam government is getting from industries for the interest rate difference, and also from the government for better housing. We are expecting good growth, maybe at least for the next 3 years, it can be 14%, 15% growth in Northeast in totality.
But what would be your current utilization, existing capacity?
So current would be around 70%.
Okay. Okay. And then, second question for your greenfield capacities, which are coming up in FY '24 South and also the Bihar plant, so just wondered some sense on where are we in terms of land acquisition and also ordering of the equipment?
So for Bihar, we are almost close to the completion of the land acquisition, and the work should start, as Singhiji already confirmed that by March '24, we get commissioned completely.
And for the South, for the Tamil Nadu and Andhra?
Yes, there work is already on.
So all would be complicated by March '24. So whatever commitment we are making, we will be meeting those commitments.
We have our next question from the line of Girija from Systematix.
Sir, just wanted to check, there is increase in raw material cost. Is this because of fly ash or any other reason?
Yes. You are right, fly ash.
What is the price right now for fly ash?
Not only because of the price of fly ash, but since I shared with you that our blending percentage has gone up. On that account, the overall consumption of fly ash and slag, that has gone up. And that's why you are seeing -- there would be little bit increase in fly ash prices also. But then maybe it is because of higher quantity of available material.
Okay. And now like the festive season has already gone, so can we expect a volume of around 6.5 million tons to 7.5 million tons in this quarter, hence like in Q3?
It is difficult to give the guidance. But then yes, we will be almost 1.5x of the industry growth.
We have a next question from the line of Sumangal Nevatia from Kotak Securities.
Most of the questions are answered, but just a few top-level questions to Mr. Dalmia. First, I mean, on our medium-term expansion plan, our long-term vision is to become a pan-India player. So with this FY '27 plan, do we start moving towards new regions or is it largely consolidation in the existing region? Directionally, if you could guide us?
I think we will be examining all possibilities. And we are developing one of our projects in Central India, where we have a limestone mine in Madhya Pradesh. So I think that project, we have already started to develop. We are also looking at -- it's early stages yet, but I think we are starting to buy land and develop projects. We're also looking at buying some land in Uttar Pradesh. So I think our long-term is pan India, we are looking at organic and inorganic opportunities all across the country. And it's hard to predict what will happen and when. And -- but we will give you more details once we form a plan.
We've lost the connection of Mr. Sumangal. I would now like to hand the conference over to Mr. Dalmia for closing comments. Over to you, sir.
Once again, thank you very much for joining us, and thank you very much for a very engaging session, as always. We thank you for your support. Thank you for your feedback and look forward to continuing to get your guidance and feedback as we build the company. As I said, we are very excited about India's future and Dalmia's future. And while the world is quite volatile and unpredictable, I think we have great conviction in India, and we are doubling down on our debt here. And I also want to say that I have a deep conviction that this decade belongs to India, and the best of India and Dalmia is yet to come. Thank you very much.
Thank you.
Thank you, sir. On behalf of Dalmia Bharat Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.