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J K Cement Ltd
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Ladies and gentlemen, good day, and welcome to the Q1 FY '24 Conference Call of J.K. Cement hosted by PhillipCapital India Private Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital India Private Limited. Thank you. And over to you, Mr. Agarwal.
Yes. Thank you, Michel. Good evening, everyone. On behalf of PhillipCapital India Private Limited, we welcome you to the Q1 FY '24 call of J.K. Cement Limited. On the call, we have with us Mr. Ajay Kumar Saraogi, Deputy Managing Director and CFO; Mr. Sumnesh Khandelwal, Deputy CFO; and Mr. Prashant Seth, President, Business Information and Investor Relations. I would like to mention on behalf of J.K. Cement Limited and its management that certain statements that we made or discussed on this conference call may be forward-looking statements related to future developments and based on current performance. 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. J.K. Cement Limited and the manager of the company assumes no obligation to publicly alter or update these forward-looking statements, whether as a result of new information or future events or otherwise. I will now hand over the floor our global management of J.K. Cement for their opening remarks, which will follow by track Q&A. Thank you, and over to you, Saraogi sir.
Thank you, Vaibhav. Good evening, and welcome to Q1 results. The Board of Directors met on 12th of August to review the performance for the first quarter, that is quarter ended 30th June. And the major highlights during this quarter, the net sale was INR 2,541 crores as against INR 2,613 crores in the previous quarter, a drop of about 3%, though it was higher by 20% against to the quarter last year. The revenue from operations were down by 2% at INR 264 crores as against INR 265 crores and INR 213 crores previous year. The EBITDA during this quarter was INR 402 crores as against INR 364 crores in the previous quarter, which is up by 11%, though marginally lower by 1% as compared to 4.97% in the previous year. The EBITDA margins this quarter was 15.8%, 13.9% in the previous quarter as against 19.2% in the last year first quarter. The profit before tax during this quarter was INR 193 crores as against INR 190 crores, an increase of about 2% as against INR 270 crores in the previous year. This year, in this quarter, we have Jaykaycem Panna, which was being operated as in the subsidiary. The subsidiary has got merged. And accordingly, the figures for this quarter has been regrouped, including the Panna working. And also wish to inform that the Panna working has been quite satisfactory. We commissioned Panna sometime in November, December last year. And within a short span of time, today, the plant is already operating at about 75%. The work on the Ujjain project, where we are putting up a grinding unit of 1.5 million tonnes is at advanced stage. And hopefully, this will get commissioned in the fourth quarter of the current fiscal. As regards to the grinding unit at Prayagraj, now we have received the environment clearance and we have already placed the orders for main plant and equipment. And immediately after the monsoon, the work would start at Prayagraj, and we are hopeful that we should be able to commission in quarter 3 in FY '25. These are the major highlights for this quarter. If you have any questions, we'll be pleased to answer the same. Thank you.
Thank you very much, sir. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Shravan Shah from Dolat Capital, please go ahead.
Hi. Thank you and congratulate on good set of numbers. Sir, first is, last time you talked about a 15% volume growth. So this quarter already in crew have done a 29% volume growth. So for full year on grey cement for sale, can we even see 20%, 25% volume growth for this year?
No, I think we said about 15%. So definitely, our efforts would be there. The demand is good. But if we see the current quarter, the month of July has been affected by rain and so the volumes are lower and looking to the other maintenance schedule and all, we are confident that we should be growing minimum 15%, we will try to see if the demand momentum, which is likely to continue, we may grow by closer to 20% but not beyond that.
Okay. And now for this quarter, last quarter, we had a INR 2 crore EBITDA. So this quarter, broadly, the EBITDA would be. So trying to understand further improvement in the profitability?
So there is an improved improvement in the working of Panna. So as we said, this 75% capacity utilization is already there. And even on the EBITDA terms, it is closer to the average for the company. And now in this quarter, we have commissioned the base recovery plant. And we would be gradually going forward, start using more of AFR. So the benefit of all this would also be reflected in the coming quarters.
Okay. Now sir, broadly, I have more data points needed, but before they're broadly trying to understand in terms of the profitability. So for last 2 quarters, we are seeing that white segment is having a similar EBITDA margin or gross even 15%, 17%. So is it fair to say, if I take like say, 15%, 17%. So this quarter, in terms of the grade broadly, I understand we don't are discussing details. But broadly, the still the EBITDA for timing grades [indiscernible] is INR 800. So can one can see this number in of increased the volume to INR 900-plus number?
Yes, definitely, we are confident that going forward, the EBITDA should improve. So when we are seeing some benefit we will get in the course in terms of lower fuel cost. We have seen the benefit in this quarter. As we said earlier that this year, we expect around INR 250 to INR 300 a tonne overall saving in the fuel cost. So out of this, actually, the first quarter has been quite good in terms of the fuel cost vis-a-vis the previous quarter. But because we had some window to get still more cheaper fuel. But still, having said so, even sequentially, going forward, we should see a INR 60 to INR 75 per tonne saving in the fuel cost itself. In the next 2 quarters, we have to see that whether we get the savings thereafter in the fourth quarter onwards or not, as the petcoke prices have started firming up. So we have to see that whether how the prices remain going forward. It has come down to around $115, and it has again gone up to about $130, $135.
Okay. So now a couple of data points. So what's the power and fuel cost? So last quarter, it was INR 12,000. And in terms of KPL, we say 2.4%. So what was the number for this quarter?
I think actually, last quarter was a stand-alone. Now because we see after a merger of the Central India operations, so with that last quarter was INR 2.50. And in this quarter, the combined is INR 2.20.
Okay, INR 2.20. And in terms of [indiscernible] INR 12,000 become for last quarter, how much and for this quarter?
So there is a slight reduction of around INR 1,000 per tonne.
Okay. Railroad mix, late distance for this quarter? Fuel mix for...
Rail was 14%. [indiscernible] was 426 kilometers.
Okay. That's great, sir. And fuel mix for this quarter?
Fuel mix is broadly 60% petcoke on the heat basis and balance 40% is the other fuel and AFR.
Okay. And then in terms of the CapEx, so we are looking at a CapEx of INR 12 crores to INR 1,400 crores for this year. So how much we have done in the first quarter? And since the number remains the same?
Number remains the same. And we have done the main CapEx of around INR 150 crores in the first quarter.
Okay. And for FY '25 also INR 700 crores, INR 800 crores kind of a CapEx?
Hello?
Yes. For FY '25, INR 700 crores, INR 800 crores kind of a CapEx?
INR 800 crores, yes. So whatever is the indication we have given regarding the CapEx, as of now, it remains the same because there's no change in the plans.
Okay. Got it. And sir, broadly in terms of working capital loans would be the INR 400 crores, which was the case in the March so?
Yes, it is around INR 400 crores.
Okay. And then in terms of the pricing post-June, how are the prices? Is there some marginal decline?
So as far as pricing is concerned, there has been on a rise, there has been some improvement in the prices in the month of July in the Northern region, though the southern region still remains same or under pressure. But in the northern region, there has been some improvement in prices. The centers have been more or less same.
Excuse me, sir, Mr. Shah, may we request you to kindly rejoin the queue as there are other participants who are waiting for their turn.
You're asking all the questions [indiscernible].
Thank you. [Operator Instructions] We'll take the next question from the line of Navin Sahadeo from ICICI Securities, please go ahead.
Good evening, sir and thank you for the opportunity. I have 3 questions. One, sir, the other operating income, basically, the net sales given in the presentation and the difference is what -- and the difference in the net sales given in P&L account. That has come to -- I think for the quarter has shot up to INR 83 crores versus on an average run rate of INR 50 crores, as I see in the past. So what could you attribute this to -- this jump of roughly INR 30 crores?
That is the increase in the subsidy. Navin, the subsidy would be around INR 250 crores for the year. So approximately, we could say around INR 60 crores, INR 65 crores each quarter. Besides that, there is one other income is pertaining to some AFR and other scrap sales and others some could be onetime. But if you talk about a subsidy alone, this would be in the vicinity of about INR 60 crores, INR 65 crores because we have now a subsidy in case of Panna, we have subsidy in case of Hamirpur, Aligarh and Nimbahera.
Understood. So at least, let's say, INR 70 crore, INR 75 crore run rate can continue per quarter for the next couple of years. Is it fair to assume that?
Subsidy would be INR 60 crores, INR 65 crores, but another INR 10 crores, INR 12 crores other income normally there.
Yes, that's what. So INR 75 crores on an average can be a sale.
Absolutely.
Okay. Sir, then my second question was this waste heat recovery plant, which you said has commissioned in the previous quarter of 22 megawatts. So did it commission towards the fag end of the quarter? Or I'm just trying to understand…
That's fag end of the [indiscernible].
So there are no benefits of that.
We will not get a normal operation in this quarter. This quarter would have [indiscernible], I think, maybe 50% utilization in this quarter because, again, monsoon is a very difficult month where rain also disturbs the operation of the kilns. When the kiln operation is not very stable, it affects the waste power generation. So it would be -- this quarter, we will see at least 50% benefit coming out of the waste heat at Panna and from third quarter onwards, yes, optimal generation from captive power would be there.
So on a normalized basis, let's say, from third quarter, compared to Q1, we should be able to see a saving of annualized savings of roughly INR 60 crores, INR 70 crores per year from [indiscernible] AFR.
Yes, INR 50, INR 60 would be there.
Understood. And sir, my last question. We see the debt, I think, sequentially has gone up roughly a little over INR 100 crore net debt I'm talking. And you said we have done some CapEx of just INR 150 crores.
Yes, Navin, yes, the point is that is excluding the CapEx, balance CapEx spillover on the Central India expansion completion. So we have spent this substantial amount on that for the waste recovery commissioning and all that. So that is in addition to INR 150 crores. So the CapEx of INR 150 crores excludes the CapEx done at Penna. So there has been the spillover CapEx at Panna was around INR 300 crores as at the beginning of the year. So during the quarter, another INR 175 crores to INR 200 crores has the spend on the balance work at Panna. So if you look at other -- so the CapEx actually has been INR 300 crores plus during the quarter.
So it will still be part of the INR 1,400 crore guidance that you're giving for the year.
It is part of the INR 1,400 guidance. And the debt increase is that we have drawn out with the -- there's some draw even done in month of close July. So whatever this balance debt, which had to be drawn for the Panna expansion that has been drawn.
No, understood. So just to conclude.
And we have taken some additional volume for the Ujjain project.
No, understood. But just to conclude, net debt, is it safe to assume that it's nearing its peak? We have peaked out largely.
Nearing its peak. It has peaked out in fact, I would say, now because in the first quarter, there were repayments were also not there. So once we have a normal repayment schedule or not. So the net debt has already filled up.
Right. That's helpful. I have one or 2 more questions, but I'll come back in the queue. Thank you so much.
Thank you. [Operator Instructions] We'll take the next question from the line of Ritesh Shah from Investec India, please go ahead.
Hi, thanks for giving opportunity. A couple of questions. Sir, first is on Toshali. Any update on the limestone lease transfer? Any timelines on growth optionality, incremental things that we intend to do over there?
No. As of now, there is no and we are still awaiting the government approval. And unless and until there is an approval by the government on grant of the mining we shall not go ahead with the transaction [indiscernible] precedent in the agreement.
Okay. So sir, has anything gone from our balance sheet? Have we given the...
We have not spent anything.
Okay. Perfect. This is helpful. Sir, second is a more generic question. Sir, can you detail what will be the sizing for the putty and white cement market in India? And whatever market share would stand right now? And in the prior call, you had indicated that the profitability has continuously been under pressure. Sir, how should we understand and read this, sir?
So the market for putty, I would say, should be close to around 4 million. So we don't have that would be the market present market for the putty. And as far as the white cement is concerned, we have about close to 1.4 million, 1.5 million tonne capacity in India. And balance there is some imports which are into India, mainly from UAE, which is [indiscernible] and Jaykaycem Fujairah. So these are the 2 countries from -- major imports are coming from UAE to India. So that is the position. As you said, yes, because of major the putty market has become very, very competitive because of the entry of the paint manufacturers are -- because one, they find this as a very lucrative value-added item or it is part of the paint. This is why we entered the paint business because we were said that we are already there in the paint because our customers, influencers, everybody is common. So for the paint manufacturers now putty again and for them, yes, they have an advantage that they don't have to do much publicity. It is a part of the existing additional product in the bouquet of products which they have. So as we see the paint industry operating at margins of 12% to 18%. So I think going forward, as per the white business would also be operating at the same level of EBITDA margin.
Right. And sir, on market share, how much would that be on putty and on white cement?
So putty should there anything between 22% to 20%. We don't have exact all numbers available, but we have between 20% to 25%. I think the L1 analysis, it was around 22%, 23% is our market share. And white cement, it is mostly 50-50, maybe 48% to 52% between UltraTech and us. So we are more or less equal in the market share for the white cement.
Sure. So this is very helpful. I'll join the back to the queue. Thank you so much.
Thank you. [Operator Instructions] We'll take the next question from the line of Sanjay Nandi from VT Capital, please go ahead.
Yes. Good evening, sir. Thank you for the opportunity. So congrats on a good set of numbers. So just to mention, we have taken some price hike in the northern part of our constraint in this Q2. So can you please quantify the numbers, like what kind of 5x did you get?
So the price hike, and it has been around rupees INR 7 to INR 10 per bag effective price hike.
Okay. And that has been going on. Do you have a cut in the investor?
Pardon?
We haven't taken cut the investor, right?
[Technical Difficulty]
Sir, just to do like we have taken hike price as of INR 7 to INR 20 per bag. So that has been get ready or we have taken any further rolling back of the price?
No. As of now, this is the effective price increase, which has been already passed on in the market. We have to really see how long it's sustained and whether there is any room for further increase in the price.
And sir, what is the utilization in this first 1.5 months of the Q2? Is there any utilization?
So the utilization level in the first quarter for us is around 80%.
And what is the run rate in this like 1.5 month of the next quarter?
Pardon?
So what has been the utilization in this close to 1.5 of this next quarter, sir, Q2?
The Q2 utilization has been slightly lower because the sales was low because of the massive rains and the flat conditions. So what happens? Q2 is always a low during the monsoon. There is -- the demand goes down and the problem in movement of material. And also, we had certain -- I mean, we do plan our planned maintenance was also most of the maintenance has been in this quarter.
Okay, sir. Sir, last question is can you throw some lights on the paint business what kind of stock we are targeting for that?
Yes. So on the paint business, as we are already started opening up more areas and all our existing dealers who have shown interest. Now we have started sending the material to them. So gradually to our network, the business has started, and we are seeing a good response as of now. If we see we plan to achieve an incremental growth of around INR 70 crores or INR 200 crores in this fiscal. Yes, the first quarter has been low, but we are expecting now that the volumes, as we are already starting the dispatches -- started the dispatches. The volume should grow. And then with the upcoming festival, we should be able to get to a reasonable number.
Are you confident that in business, you can maintain the top line growth as far as the industry likely is from the next year onwards, like ‘25 onwards?
Not clear.
Sir, like are we confident that we can maintain the top-line growth in comparison to the peers at the same part?
No. So what we have planned, we feel that we'll be able to achieve like in the previous year with Acro, the top line was about INR 80 crores, INR 90 crores, and we had planned anything between INR 150 to INR 200 crores in this year and INR 300 crores in the next FY '25. We feel that as of now, this should be achievable.
Got it, sir. So thank you for the answers. Thank you so much. I'll come back to the queue, sir.
Thank you. [Operator Instructions] We'll take the next question from the line of [ Dipika Kakwani ] an Individual Investor, please go ahead.
Sir, can you please guide us on the realization for this quarter?
So we should expect the overall realization to maybe it adds things go as it looks now, anything between average around INR 50 to INR 70 or a tonne improvement in realization over the previous quarter.
And if you can tell us what were the realizations for Q1 FY '24?
Q1 realization was -- NSR was close to INR 5,000 per tonne.
Okay, sir. Thank you.
[Operator Instructions] The next question is from the line of Shravan Shah from Dolat Capital, please go ahead.
Thank you, sir. Sir, first is Karnataka, WHRS 16 megawatt when that will get started?
So the work has already started it, I think, by end of December, this should get commissioned.
Okay. That's great. Second, Panna clinker debottlenecking from 8,000 TPA to 10,000 TPA. So that will be by Q3, that will be also done?
Yes.
Okay. And -- but that paint part you mentioned in terms of the revenue but for this year as a whole amount of INR 150 crores, INR 200 crores revenue but on an accounting basis, we should be having some EBITDA level, some EBITDA loss?
Yes. We have already indicated that the EBITDA loss of about INR 20 crores.
Okay. And any update in terms of the next phase, the expansion that we are looking at for the second line at Panna and then we are also thinking of course that maybe the [ Joselito ] to any update of when we are likely to start the work or when we'll announce the second phase of expansion at Panna?
No date has yet been faced. So I think the Board will review some situation sometime maybe early next year or close of next -- the current financial year. So at that point of time, we will review the entire status and then take a call.
But our preference will be to first go for expansion at Panna?
Should be. I cannot comment on that. That let us see what is the decision.
Okay. That's it from my side. Thank you.
Thank you. [Operator Instructions] The next question is from the line of Prateek Kumar from Jefferies, please go ahead.
My first question is on fuel cost. You mentioned we were like looking at INR [indiscernible] per tonne of fuel cost savings and INR 60 to INR 75 spending for next 2 quarters. So that means over INR 200 is realized in the first quarter of what?
About INR 150 odd is already realized. As I also mentioned that this quarter has been exceptionally good because we had an opportunity to where we got certain domestic fuel at a very -- at the cheapest rate. And that's when the international rate at the lowest, we got at that rate. So that is also reflected in this quarter's earnings. But having said [indiscernible], we are expecting another 60 to 75 gain over the first quarter in the second quarter. So we still expect so we should get about INR 300 a tonne saving by end of December.
You said INR 150 was realized in this quarter or INR 300 it was revised in this quarter?
Yes, INR 150.
INR 150. Okay. And at petcoke of like whatever number we are looking at, in terms of savings, what is the [ kilo ] cost versus 2.2%, which we booked for this quarter?
So we should see about 20% reduction. That should be there in the next quarter and maybe another 20. So this is how we expect sequentially the prices to go down.
Okay. So I answer this because some of the other companies have indicated, 1.7, 1.8 as like probably a peak realization of savings. So...
So 1.8 we should be by end of this third quarter, as I said.
Okay. So 1.8 is the lowest cost, which we might be looking at.
I don't know whatever is the presence of stands we have to see that.
Okay. And on Panna unit profitability, you say it is in line with the company. So is it in line with gray operations? Or is it in line with the overall stand-alone operation?
I should agree operations.
Agree operation. Okay. So we have reported 900 per tonne approximately for stand-alone operations. So it would be like obviously lower than [indiscernible] includes with…
Not major impact. A significant difference.
A significant difference, okay. Sure. Thanks. Thanks for giving the opportunity.
Thank you. [Operator Instructions] We'll take the next question from the line of Aman Agarwal from Equirus Securities, please go ahead.
Thanks for the questions taking. Sir, just wanted to understand on the savings, we are expecting out of the green power capacities that are coming in, not only depletion but also the renewable capacities. We have a target of 80 megawatts of WHRS '24. And I guess, 94 megawatt of renewable power.
So presently, our renewal power is around 46 megawatts, and we are planning to increase this up to 100 megawatts maybe by end of next fiscal.
So sir, just wanted to understand on the savings that you're expecting out of these.
So since we are not doing a capital model in most of the things, it is a group captive power. So we expect power savings of around 30% to 40% from the growth rate.
Sure. And just on the sale Toshali acquisition, we see that Northeast market is a pretty small market, and we have already seen quite a few capacity additions on from a [indiscernible] operating in the Eastern region. So just wanted to understand your view on how you view the regional dynamics playing out.
No. See, again, Toshali, when it material as I said, is a natural extension of our market as we are doing when we do the next expansion at Panna. So besides consolidating on the existing markets of Central India, we shall also be entering the Eastern market. So this is -- I mean, as we --that will become our natural market and where when Toshali as an opportunity, we see getting a limestone deposit in an area where in the vicinity of 400 to 500 kilometers, there's no plant. So we get a very good opportunity, and we are planning, if everything goes well and we get all the mining lease and everything, then 2.5 million to 3 million tonnes of capacity can be added and in a region where there is no image competition. So 500 radios or when you get a plant where there is no competition available direct competition material can come from any other regions. So you will have a lot of local advantage in catering to those markets.
Understood, sir. And sir, lastly, on our midterm target of reaching 30 million tonne capacity target, so further additions would be largely brownfield or greenfield in nature? Or is there a poster debottlenecking scope left with the company?
Not major debottleneck is left because we have already done all the modernization at the existing plants. So we see that the next expansion would be by way of brownfield and greenfield only.
I understood, sir. Thank you, sir. This is so much helpful.
Thank you. The next question is from the line of Navin Sahadeo from ICICI Securities, please go ahead.
Thank you for the repeated opportunity. So for Acro Paints against the guidance that we are looking at revenues of INR 120 crores, INR 150 crores, how was the performance in Q1, both in revenue and EBITDA terms?
So for the paint, we did approximately INR 25 crores in Q1. And the overall EBITDA during this quarter was a loss of about INR 2 crores.
Okay. Loss of around INR 2 crores because the Acro Paints as such was...
Acro Paint and including whatever is the new areas through Acro Paint we are, the new markets which we are entering. So that is included in the INR 25 crores top line as well as the loss.
Understood. Second question is in the clinker factor, I was just looking at the annual report. So year-on-year, there is a marginal drop in clinker factor, I think, 65.6% to 65% or so for the quarter. So how much further reduction can this clinker factor see with commissioning of the Ujjain and the Prayagraj grinding units?
So you see grinding unit, it definitely would help in reducing the clinker factor, improvement on the -- so that will definitely help because the production from the grinding unit is all blended cement. So having said so, I think we have to see if we get incremental production of about -- so it's about saving is around 10% more in case of the blending unit in terms of -- on an average when you look at the clinker factor.
So Navin, just to add to Saraogi, like it will impact overall ratio, like once Prayagraj and Ujjain, it might impact by [indiscernible]…
It depends on the weighted average and how the -- there is one more thing in a lot of incremental demand is coming from the non-trade sector because a comment. So again, to be able to grow with the industry or more than the industry, we will have to go in towards for the non-trade also. Otherwise, the overall volume growth will not be there, though we have been growing the trade segment. But overall volume to grow on an overall absolute numbers, you have to grow both in the trade as well as non-trade segment.
Yes. Understood.
So having said so, I can see if there's an improvement in the trade segment, but equal improvement in the non-trade segment, then the clinker factor will not change.
Sure.
And logically, like at grinding unit, we don't supply -- from grinding unit, we don't supply UPC. So as we're increasing like grinding units. So definitely, that impacts the ratio.
Understood. So directionally, at least, we can see some improvement. There is scope of further 200, 300 basis point improvement of reduction in the clinker factor. Is that a safe to assume, right?
So those plants start to flash like when it is running at 70% to 80% of the capacity, then definitely, that should.
Yes, there is a possibility. But again, as I said, a lot will also depend on how the demand supply between trade and nontrade shifts up going forward.
Understood. And on the fuel cost, you said we've achieved roughly INR 150 per tonne this quarter and around INR 75 to INR 50 per tonne per saving.
Yes, that 150 in the next 2 quarters. So as we gave an indication that a saving of around INR 300 a tonne over Q4 which should be there.
Yes. So the only change there is I'm saying petcoke, which has fallen to as low as $105. As you said in your initial comments, it's come to $130-odd and we keep inventory of maybe 2 to 3 months. So we are in August. This increase should impact in Q3 itself or that will come in more like in Q4?
Whatever indication it's again, some shipments will come at a lower cost, some would be at a higher cost. So whatever indication with the fuel planning, which we have at this moment. So we have given an indication of INR 0.20 per 100 GCB saving in each of the next 2 quarters. So let us look at that as an indication. Our fuel cost was about INR 2.20 in Q1. It should be around INR 2 in Q2 and INR 1.83 in Q3.
But directionally, it is safe to assume that Q3 would have bottomed out in terms of your fuel cost savings.
We see further reduction in the petcoke pricing.
Yes. But as of now, there is an increase of $20, $25. So from that point...
Yes. Actually, 105 was very -- I mean it was a very short period.
Understood.
You see, I mean that was -- it had not gone down 2 levels of 105, which is remained between 115 to 122, 123 or 125 was very small window. Everybody, whatever ability, whatever very few plants could get a major shipments during in that price range.
Understood. Sir, my last question, do we have any more revenues? Because operationally, I understand there is scope of further cost reduction with waste, there is a clinker reduction. On the fixed cost front, is there a scope of things to get a little lean now more so if I look at the consultancy charges or anything like that, are there any avenues where we can see some cost reduction in the fixed cost front?
Yes, definitely, we are working out on that. And maybe not immediately, but definitely, fixed cost is a focus for us. And then now as a next -- because again, it is not only variable cost. The fixed cost is equally important. And we are working out on a possible reduction in the fixed cost as what we see a good when we -- yes, year-on-year, the increase is there, the increases on account of inflationary trends, the additional manpower and the other expenses because of an increase in business. But we are still working out on revenues as on the consultancy and other expenses. So wherever we see that there would be a net business gain. We will work on it, and it is definitely a part of our plan. Not for now. Going forward, it will always be there to see how we are able to reduce the fixed cost.
Helpful. Any guidance to give or...
No. Actually, the guidance if you say in the absolute number, no, we have a guidance with our internal budget, which we had prepared for the year, we are trying to see how we first reduce on the budget because incrementals, any increase from absolute numbers is very, very difficult because mainly it is out of control it when you have expansion and other things already in way.
Fair point. Thank you so much and all the very best.
Thank you. The next question is from the line of Raghav Maheshwari from Asian Market Securities.
Sir, my question is primarily for the Ujjain grind even, we have sufficient clinker from existing clinker from Nimbahera or Magrol or we need to improvise or modernize our line one of the Nimbahera [indiscernible] because Nimbahera Line 1 is not working due to the very old operating parameters?
So we have sufficient clinker. In fact, if we see even in the last fiscal, the line 1 and 2 of Nimbahera, we had not operated only for about 2 months in whole year. And even now, so we have a sufficient clinker available for the Ujjain project from Nimbahera and Magrol.
Sir, currently, basically for the Nimbahera line and 1 and 2, so what is the cost difference between the latest operating parameter than the difference between deadline in per term of the clinker costing manufacturing?
Yes. Definitely, if you look at the operating cost from kiln #1 and #2 is higher than the operating cost of the other kilns and the variation is between INR 300 to INR 450 a tonne. But having said so, this is utilizing a spare capacity. We don't need to any invest. We already have certain fixed expenses of that line because we cannot go for a derating of the capacity. So there are many advantages. While we do incur certain additional variable costs. There is an overall saving in the risk cost of about maybe about INR 100 a tonne. And otherwise, if we look at not only the if you only look at the operating profit is different. But if you look at the overall net cost, including interest and depreciation, there is no cost of interest or depreciation when we operate these lands.
Got it, sir. And one last question from my side. Other than after the Prayagraj and the Ujjain expansion when it will get over, do we have any scope to expand only cement capacity and we have the extra clinker? So because I want to understand there is any scope of spinning cement capacity without any clinker expansion. Is it possible?
No, we are seeing what -- our capacity grinding capacity after Prayagraj would be 24 million, 25 million tonnes. And that would be -- I mean, the present clinker capacity would be just sufficient for the entire capacity. So we will not have additional clinker available for more grinding capacity.
In any reason, right?
Yes, yes. Broadly, yes, maybe some -- we do continue to sell some clinker in the southern plant respect even why we have a capacity of 3.5 million tonnes now in this out, we still sell very on an average about 1.5 lakh tonnes of clinker in a year, but that's all. But otherwise, we don't have any clinker available.
Okay. But if we want to operate line 1 and 2 in the future, if there is any demand boost up in the north or the Central India, is it possible to do the cement capacity expansion on the dependency of the Nimbahera line 1, 2?
No, no. What I'm saying that, the present grinding of 24 million tonnes is including the clinker from line 1 and 2.
Okay. Got it, sir. Thank you.
Thank you. We'll take the last question from the line of Ritesh Shah from Investec India.
Hi, sir, thanks for opportunity. Sir, my first question is, we have several new products, which we have launched over time, including WhitemaxX, GypsoMaxX, TileMaxX, Wood Amore. Sir, what is the revenue and the EBITDA run rate over here? If you could please help with that? That is the first question.
So one WhitemaxX is not a new product. It is part we have all the white cement products are part of the MAxX family. This is a part of the branding exercise. WhitemaxX when you say it is the white cement.
White cement, yeah.
So it is not a new product. GypsoMaxX is a gypsum plaster which we introduced about 4, 5 years back and looking to see today to maintain all our dealer network and retailer requirements, you need to have a bouquet of adults, one product because it is not -- when the customer comes, he would like to take all the products from one counter. If you counter only has one product which is there, while we are facing challenge from demand coming in from the market that this is the difficulty being faced by the dealers. So when we started on this journey of introducing value-added apps across the company. So we took this -- we started the journey about 5 years back. And so we have seen one with the introduction of back, we have been able to create a new profit pool, new bucket for us though it is not very substantial. But we say from the raps yourself about 15% -- 12% to 15% of the total wide EBITDA you get from the MaxX.
Sure, sir. Sir, would it be possible for you to quantify what this number was for last year full year?
No, we do not share for the MaxX or we are not sharing for the main products and you are asking for a sharing of the MaxX, which is again our business confidentiality data, we are not sharing the data of MaxX separately.
No, right. I appreciate that. Sir, my second question is, sir, how should we look at the optionality that we have at [indiscernible]? So when you think about it, you look at [indiscernible] Nimbahera yield expiries or you look at [indiscernible] versus Panna brownfield opsonities. Just trying to understand your thought process.
[indiscernible] works out to be a long-term strategy. We'll see, in Rajasthan now, you have no new sites available. And when we see going forward, when the demand increases, one and [indiscernible] has got good limestone deposits, it has challenged -- it has logistic issues in terms of both incoming into away from the market. So there, we are trying to work out what incentives can be given by the state government to partially offset this disadvantage. But otherwise, good quality limestone, we can have good clinker production from there and with the grinding units, have a good business model. So going forward, I mean, if we have to receive, we have to meet out the increased demand. So that has to be -- I mean, the old north market is primary dependent upon these cement coming in from the state of Rajasthan. So Rajasthan is not going to have more limestone deposits, so then we have to go to areas where the limestone availability is there.
So sir, this is not a backup to Nimbahera lease expiries. You're looking for…
This is not back up to Nimbahera lease expiry. For that, we have already got -- in the last year, we took on additional lease in the auction close to Nimbahera. And in any case, I would -- I mean, it is not the platform to discuss, but I'm of the view that mining leases are getting expired, but definitely, there is a provision, and it would -- there would be a much more clarification closer to the day by the government that the write-off [ diffused ] will go to the existing year. Otherwise, it is not a practical option.
And just last follow-up question on Nimbahera. Sir, how do you look at water as a commodity over here? I understand earlier at the government was not giving approvals because of water as an issue over here. So is this something which has been taken care of by putting on pipelines or are we still relying on growing on that?
I do not have any problem in case of water.
[indiscernible]
So yes, [indiscernible] have taken approval for water from the government.
Okay. But...
Various approvals, we have taken approval from the government for the requisite water.
Okay. But are we relying on groundwater, sir?
No, no. We also proposed to get the pipeline, that is part of the project.
Okay. This is very helpful, sir. Thank you so much, sir.
Thank you. Ladies and gentlemen, that was the last question for today. I will now hand the conference over to Mr. Vaibhav Agarwal for closing comments. Over to you.
Thank you. On behalf of PhillipCapital India Private Limited, we would like to thank the management of J.K. Cement for the call, and many thanks to pardon joining the call. Thank you very much, [indiscernible] now come the call. Thank you.
Thank you, Vaibhav. Thank you, everyone, for joining the call.
Thank you, members of the management. Ladies and gentlemen, on behalf of PhillipCapital India Private Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.