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J K Cement Ltd
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Ladies and gentlemen, good day, and welcome to Earnings Call Fourth Quarter and Year Ended 31st March 2024 of J.K. Cement hosted by PhillipCapital India Private Limited. [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, sir.
Thank you, Mitchell. Good evening, everyone. On behalf of PhillipCapital India Private Limited, we welcome you to the Q4 and FY '24 call of J.K. Cement Limited. On the call, we have with us Mr. Ajay Kumar Saraogi, Deputy Managing Director and CFO; and Mr. Prashant Seth, President, Business Information and Investor Relations. I would like to mention on behalf of J.K. Cement Limited and it's management that certain statements that have been made or discussed on today's conference call may be forward-looking statements related to future developments and based on current expectations. These statements are subjected to a number of risks, uncertainties and other important factors, which may cause actual developments and results to differ materially from the statements made. J.K. Cement Limited and the management of the company assumes no obligation to publicly alter or update this forward-looking statements whether as a result of new information or future events or otherwise.
I will now hand over the floor to the management of J.K. Cement for their opening remarks before we open it up to Q&A. Thanks, and over to you, sir.
Thank you, Vaibhav. Good evening. I'll give you a brief. The Board of Directors met on 12 May to review the working of the company for quarter ended 31st March '24 as well as for the whole year. And I'll give you -- though we have already posted the details to you in the investor presentation also. I'll just give you a brief of the working for the quarter and the year. So our net sales during this quarter was higher by 6% at INR 2,856 crores as against INR 2,690 crores. The EBITDA during this quarter was lower as compared to previous quarter by 10% at INR 548 crores as against INR 608 crores. The EBITDA margins were also lower at 19.2% as against 22.6%. The profit after tax was lower at INR 236 crores as against INR 289 crores in the previous quarter. If we see the working for the year, the net sales was higher at 16% by INR 10,563 crores as against INR 9,094 crores. The EBITDA was higher by 52% at INR 2,005 crores as against INR 1,320 crores. The EBITDA margins was 18.9% for the year as against 14.5% and the profit after tax was higher at 65% at INR 831 crore as against INR 503 crores. We see that this year has been an exceptional year for the company. The company has -- volumes have grown by 19%, the gray cement volume.
The Central India expansion achieved a capacity utilization of 83% in its first year of full operations. We commissioned the Ujjain grinding unit of 1.5 million tonnes within 12 months of start of work. We acquired the Toshali Cement to extend footprints in the Eastern markets. Looking to this, the Board of Directors also recommended a dividend of INR 15 and a special dividend of INR 5 as this year, we are going to celebrate 50 years of Gray Cement and 40 years of White Cement. So our -- we started the Gray Cement journey way back in 1974 and White Cement in 1984.
As far as the projects are concerned, we are still -- our expansion is well within the track, the Prayagraj unit of 2 million tonnes is in advanced stage and this is likely to be commissioned in the second quarter of this fiscal. The 6 million tonnes expansion plan, we have already placed orders for the main plant and equipment, the civil and mechanical contractors work has already been released. At the main integrated plant site, the bhoomi pujan has been done and the construction work has started, then about either end of second quarter of FY '26 or third quarter of FY '26.
As regards, we continue our journey of growth and yes, presently, because of elections, the demand is subdued. However, we feel that we will end up the year with at least about 10% growth. And we continue with our journey for cost optimization. And going forward, we see that over -- we should be able to achieve INR 150 to INR 200 of reduction in costs. These are the major highlights. I would be pleased to address any of your queries. Thank you.
[Operator Instructions] The first question is from the line of Navin Sahadeo from ICICI Securities.
Sir, just to confirm, did you mention INR 150 to INR 200 per tonne cost reduction potential in your initial comments?
Yes, INR 150, INR 200 cost reduction potential going forward, not immediately in FY '25, but over the next 2 fiscal.
Okay. So if I may please request some more like elaboration on this as to what will be the broader areas under which you plan to achieve this? And if there are any specific year-wise time lines to this that will really help.
So again, see, as far as time lines are concerned, we will get back maybe. Maybe major areas are one is on the freight. So on the logistic costs, we are working, and this should definitely give us around INR 50 a tonne. We have already achieved a good level of green power, we are already around 50% plus, but we are still working for more green power that will give us certain savings. We are optimizing more usage of AFR. So that would also result in certain savings and other fixed costs and other areas of cost. So on the supply chain and other things we are working on. So that should also result. So that I mean -- exact numbers are being worked out, but we definitely see a potential of this is the value INR 150 to INR 200 a tonne.
Appreciate. sir, my second question then was around the time lines for Panna-2 CAPEX. So in the presentation, you said that the clinker plant would be possibly up and running by July to September '25. But if you could help us understand when will be the grinding units related to this, what are the specific time lines if you can share that?
So see, as far as -- I mean, there has not been any difference in the timelines or there have been delays in any grinding. So as far as the integrated plant is concerned, we feel that within 18 months -- though our internal target is still much lower, so within 18 months, we should be able to commission the integrated sites. So we have already done the pujan early. And now we expect that if we take 18 months, it comes to around by between September, October, we should be starting next year, the entire integrated plant. The grinding unit, we are -- major would be on the grinding at Bihar. We are at advanced stage of the finalization of the land. And once we do it, I think there should not be any delay. We should be able to complete that within 12 months of start work at the site. We have already finalized the order. So we are confident that by end of quarter 2 or beginning of quarter 3 FY '26, we should be able to commission this.
[Operator Instructions] The next question is from the line of Mangesh Bhadang from Centrum Broking.
Sir, a couple of questions. First is on Toshali Cement. So now that the acquisition is complete, what kind of contribution is expected in terms of volumes from that plant or do you think that we need to make certain investments for that plant to basically start contributing to new [ fleet off ].
So see, it's primarily it's about -- we should be able to start the work in full this plant should -- it's a running plant, but we did -- need to modernize it and make some investment and working capital. So another we are going to invest about INR 40 crores in this year on the plant. And we should -- as we modernize the plant, we should be able to get about 4 lakh tonnes -- 3 to 4 lakh tonnes annually from this plant. And in the meantime, we'll also work on the mining lease. And when the mining lease finalizes and order long-term arrangement for the limestone, we will work out for the next phase in due course of time.
So this year we can expect 4 lakh to 5 lakh you said, right?
Not this year. I mean, I think this year will be lower. I think by -- it will -- the normal production should start coming in by the beginning of the third quarter onwards.
The second question is on the market. I just wanted to have your views on what the current pricing is compared to the 4Q average? And you mentioned that demand at least usually because of election is low. So what kind of numbers you're looking for in '25 and that 10% growth you have mentioned is largely will come from the central region?
Yes. So it will -- so see, as far as demand is concerned, I mean, it is low because of the elections across and then even in the second quarter, it will pick up, but the monsoons should be there. So we are really expecting normal demand to be there after the, I mean, post -- from third quarter onwards. By that time, the annual budget would have also come in and government spend -- there would be clear clarity on the government spend also. And as far as the volume is concerned, yes, there would be growth in Central India because we have commissioned -- we would have commissioned Prayagraj. So we'll get extra volume also in the Central India and in the other regions also North and South, we will be growing at par with the industry.
On the pricing trend sir -- current pricing?
So pricing, we -- let us see, I think maybe we will see something. We should see some pricing only from the third quarter onwards. I do not know that any expectation of price may come up immediately. There is some pressure on the pricing, vis-Ă -vis fourth quarter as you see, there has been a marginal dip, but not a substantial dip.
Okay. And sir, finally, the Prayagraj and Ujjain grinding units cumulatively will have 3.5 million tonnes of grinding capacity. So we do have the commensurate clinker for the same, right, at the existing unit?
Yes, that we told you earlier also, we have commensurate clinker.So our present clinker availability means even now, we are not operating all our kilns. Presently, the demand is less, one of the major reasons is that also. So we have commensurate clinker. We can easily -- as we told earlier, I mean we are working at average 85% of capacity utilization. So for 22 million tonnes of production, we have all the clinker.
[Operator Instructions] The next question is from the line of Keshav Vijay Ratan Lahoti from HDFC Securities from HDFC Securities. Sir, the participant has left the queue. We will move on to the next question, which is from the line of Amit Murarka from Axis Capital.
My first question is on the CapEx buildup for '25 and '26. If you could just provide some guidance there.
Yes. Yes, CapEx spend in '25 will be around INR 1,900 crores and in '26 also around INR 1,800 crores.
Sure. And what is the kind of incentive that got booked in Q4?
So Q4, the incentive is around INR 70 crores.
And UP, have you started the bookings? I mean, last call, I think you had said that you're booking only in MP as of now.
No, no, in UP, we've been booking, Aligarh also we have been taking. Only thing is that the incentive available for Aligarh was only available till December, the whole -- the yearly amount was exhausted. So there was no incentive, which we could take for regard in the last quarter. But we are accruing. And in fact, we have already got partial payment of that incentive.
Understood. And also on the Paints business, what was the revenue and EBITDA booked in Q4?
Paint revenue in the Q4 was INR 30 crores and overall revenue for the year was INR 153 crores.
Okay. And EBITDA?
EBITDA, there is an EBITDA loss of INR 20 crores.
For Q4?
For the year. The year as a whole.
And Q4.
Yes, Q4 it was INR 6 crores. .
Okay. Sure. And generally, like you said that pricing you are now expecting only post monsoon. So as of now, then the Q1 realization, I believe you said that it will be down only marginally versus Q4. My understanding was that like there was a big drop in pricing that has happened in March and the exit of Q4 was actually about INR 10 lower than the Q4 average. So if that is the case and then it just means that we are 3%, 4% lower than Q4 realization. So is that understanding correct?
Can you just repeat?
So basically, there was a continuing decline in pricing that has happened in the fourth quarter. At the exit of Q4, our understanding is that was about INR 10 lower or 3% lower, let's say, than average Q4 and given that there's not much hike this quarter. So then is it correct to kind of expect that this quarter will be like 3% to 4% lower than Q1 -- Q4, sorry, Q1 will be 3% to 4% lower than Q4 in realization terms, given that no hike has happened?
Yes. But blended, it could be around the same thing. There is a lot of pressure and even half of Q1 is left. You never know what is -- how the situation would be. But it could also be that things may improve marginally. So we really have to see.
Sure. And also on white putty cement and putty it seems like the realization has dropped there as well. So what's the reason for a drop over there?
So actually, there's continued pressure on the putty. So the pressure from the paint guys, it continues. And even after entry of bill offers in the paint so the -- I think there's a reaction on the putty side by the paint mainly Asian Paints. So there is a pressure on the putty pricing.
[Operator Instructions] The next question is from the line of Keshav Vijay Ratan Lahoti from HDFC Securities.
Just want to confirm on the Central and East expansion. What I can recall the entire expansion was INR 2,850 crores and the central piece was INR 2,200 crores, but we can see now Panna aloan cost is INR 2,300 crores. Is there some bump up in expansion? How much this total expansion will cost?
No. I think the 6 million tonne expansion cost was INR 2,850 crores, which included the figures at the integrated plant site has been shown as INR 235 -- INR 2,302 crores. And the balance, INR 531 crores is for the grinding unit at Bihar and balance is for the increase in the grinding at Hamirpur and Prayagraj. So that was the total expansion cost of 6 million, in central India was INR 2,850 crores. There is no change in the project cost. It is whatever -- what was estimated earlier, it remains the same.
Okay. Understood. Got it. In this quarter also, we have seen sequentially some increase in employee cost, although last quarter, we were expecting some decline.
So as you see in this quarter, one of the reasons for increase in the employee cost is, there has been an incremental variable pay. And when you see year-on-year, it was -- I mean as a company, overall profitability has been much better than what was internally budgeted as a guideline for the variable pay. So there's an incremental variable pay portion, which has come for the full year when we entitlement. So that is one of the reasons for increase and other is that all -- you all the -- when the projects get completed, you have full salary for the other plants, Ujjain full salary has come in, Ujjain has commissioned. The salary of Ujjain is also included.
Got it. Is it possible to quantify what is the incremental variable pay amount?
So variable pay amount is the total additional for the quarter is 15, but total, I mean see even in the previous year -- once you compare with previous year, the variable pay portion was quite less. It was even 50%, it was lower. So compared to year-on-year, the impact of variable pay is around INR 35 crores, INR 40 crores.
Okay. Got it. Understood. One last question from my side. Is the paint guidance remain same for FY '25?
So FY '25, we have a paint guidance remains the same of INR 300 crores plus what we said. So that should remain -- that should be the same.
[Operator Instructions] The next question is from the line of Shravan Shah from Dolat Capital.
Yes. Sir, just continuing so for FY '25 at EBITDA level on paint front, will it be how much loss that will be delivered?
So for the paint -- so the paint loss for FY '25 will be marginally higher as we would be investing more towards the branding and the loss would be around INR 35 crores -- INR 35 crores to INR 40 crores.
Okay. And for FY '26 previously, we were looking at close to INR 500-odd crore kind of revenue. So will it remain the same? And for FY '26 also, can we see the EBITDA loss? Or will it turn EBITDA neutral?
So yes, as far as the top line is concerned, definitely, FY '26, we should see a top line of around INR 500 crores. So there is no change in that. On the EBITDA front, we see that FY '26 maybe there is some loss, but FY '27 onwards should be EBITDA positive.
Okay. Got it. And in terms of the -- just to again clarify in terms of the time line for the expansion so by Q2 FY '26 Panna clinker and one MTPA grinding will start and Bihar 3, Hamirpur 1 and Prayagraj 1, what's the timeline in terms of the start?
See, as far as the time lines are concerned, we see at end of Q3 or beginning of Q4 -- end of Q2 or beginning of Q3 as a time line for Panna completion.
[indiscernible] MTPA, Bihar.
So, Bihar will come at the same time and there is -- I mean we don't foresee that there would be anything on Bihar side.
Okay. And Hamirpur and Prayagraj also come by Q3 FY '26?
See Hamirpur, Prayagraj will come at the same time. There's not much work to be done at those plants, but it is only a marginal upgradation, which will lead to the incremental production. So there is nothing -- not major activities to be carried out for that.
Yes. Sir, a couple of data points are needed. Green, sir, for FY '24, we said 51%. But for Q4, how much it was? Fuel mix for Q4 -- TSR for Q4 FY '24.
See TSR -- the fuel mix is like we have around 60% of pet coke based on the heat conditions. And balance 40% is the imported coal and the alternate fuel. TSR we have around 16%.
16% for Q4 Fy '24?
Yes, it's around 16%.
Yes. And for Green sir, for full year, we said 51%. For Q4, it is how much and in FY '25, how much we will be adding on this in terms of the capacity on where this will increase [Technical Difficulty]
For the -- data for the TSR and the green power is captured on the YTD basis. So there's not much of a change on a quarter-on-quarter basis. So that is why I'm telling you the yearly number of TSR is 16.3%. The Green Power yearly number is 51%.
Okay. And in this green, sir, in this year, how much more capacity are we adding here? Because -- and also made a clarification you mentioned in the presentation some 22-odd megawatt wind agreement was till 31st March '24. So now that capacity is no more with us or...
Yes. So there was a onetime -- it was a short duration opportunity available, which is not there. Having said so, we are entering into long-term new solar agreements. So that would -- I mean, we have just finalized, and I think by end of this quarter, we should be able to finalize some around 40, 50 megawatts of solar power arrangement on the long-term basis.
Okay. Got it. And in terms of the net debt levels, sir, previously, we were talking about INR 5,600 crores kind of a gross debt can be picked out. So that remains the same?
The gross debt as of 31st March is INR 4,592 crores. And what we -- what you are talking about of close to that is including the expansion that is FY '26.
[Operator Instructions] The next question is from the line of Rajesh Kumar Ravi from HDFC Securities.
My first question pertains to your CapEx. So [indiscernible] 1,900 crores which you have mentioned will spending in this financial year. This is only the expansion CapEx or that is inclusive of your maintenance CapEx?
Yes, everything. It includes everything.
Okay. And this Panna expansion, you mentioned close to INR 2,300 crores, right? This being a brownfield expansion, why is the cost suddenly higher because clinker is 3.3 and grinding is just 1 million tonne..
Pardon if you -- see you have to look at the total the Panna expansion on the klin is to support grinding of 6 million tonnes. You have to see the capital cost of INR 2,850 million for 6 million tonnes. Now if you see the capital cost for 6 million tonnes, it is working out to -- what -- is about 500 -- is less than INR 500 crores per million.
Just thinking from that perspective, the clinker unit is a brownfield one. So I believe the cost should have been lower.
Actually brownfield see, you do the saving only in terms of the land. And you have the administrative setup available so that you can do the project -- complete the project earlier. And then also because Panna, we have seen huge mining land, and we have to keep on acquiring. So even in this project cost, we have considered the cost of the mining land, which has to be acquired.
And it is a bigger kiln as compared to Line-1. So again, we have to support the cement grinding line, one was for -- it was 8,000 and then increased to 10,000. So we are starting this with a 10,000-tonne klin with a potential of another -- to another 2,000 tonnes. So with that, it's a larger klin so capital costs and then it takes care of all the escalations in costs. There's a time gap between Line 1 ordering and Line 2 ordering.
And sir, this Bihar grinding unit is a greenfield one, 3 million tonnes, but the pending CapEx beyond this INR 2,300 crores is INR 550 crores. So how much you are spending in Bihar and this seems to be a very small CapEx for the greenfield Bihar unit?
So INR 530 crores is quite a big amount.
[Foreign Language] The remaining...
INR 40 crores, INR 50 crores remaining is for Hamirpur and Prayagraj INR 20 crores, INR 50 crores.
Okay. There you have some balancing equipment which you're only [ checking in ].
Yes. So that's only INR 40 crores, INR 50 crores for Hamirpur and Prayagraj. Tha is not much.
[Operator Instructions] The next question is from the line of Amit Murarka from Axis Capital.
Sorry, I missed the comment on fuel cost. So, can we now expect that the downward sloping curve that we're seeing on fuel cost for last year, it will now be more like a flat curve from here for the next couple of quarters at least for which we have the visibility or is there some further reduction that can be expected?
So there would be some reduction, but not the steep fall as we saw in FY '24. On an average quarter-on-quarter we see, once we compare to previous year, definitely, there would be saving. But quarter-on-quarter, there is still some marginal cost reduction, but not very significant.
Okay. And you said AFR comes from -- the share of AFR was 16.3% in FY '24, right?
Right.
What would be the cost generally that you incur like this kind of AFR sourcing that you do?
Sorry, we will not be sharing the exact details of AFR cost. It is -- and I would -- we will go on average fuel cost net of AFR. We give you the fuel costs, but we will not share the -- what is the AFR cost, it is too common, it is business confidential, we would not like to share that.
Sure. No, that's fine. Are you like -- You mentioned in the opening remarks that you see 10% kind of volume growth in FY'25. So, my first question was like is that your assessment for industry growth as well or you are building in some market share gains in that number?
No. We will grow definitely more than industry growth, should be around 7%.
Okay. And last year, what would have been your clinker production number?
See, we are at around 85% of clinker capacity utilization. So we have like...
Is that at a blended level for both North Central combined.
Yes, combined level. So our clinker data...
All the clinker data, we will send you separately.
[Operator Instructions] The next question is from the line of Girija Rai from Asit C. Mehta.
So, if I go through the presentation, our lead distance has reduced by 6-7 kilometers on quarter-on-quarter basis and also, we see the global fuel cost, energy cost has declined. But we do not see much impact in our freight cost per tonne. And in your opening remark you mentioned we will be having a saving of around Rs.40, Rs. 50 per tonne of savings from the freight cost. So, how we are going to do that?
Again, logistic cost is what we said is we see a potential, not that we will get in a month's time or 2 months' time. Our logistic costs, we have taken on a project to work out on the logistic costs. And there are several levers, which has to be achieved. And we are quite confident maybe that over a period of 1 year, we should definitely get to this number INR 40 to INR 50 a tonne.
The next question is from the line of Ritesh Shah from Investec Capital.
First is, can you please provide some color on th UAE business, the shipments, the volumes that we had for the full year, if at all, there were shipments in from UAE to India? And how are we looking at this asset going forward?
So, yes, as we see, there has been quite an improvement in the UAE performance. The full year volume numbers, there has been about a 34% increase in the volumes numbers during the year from 428,000 tonnes of clinker and cement, it has gone up to 575,000 tonnes. And if we look at the whole year, this is the first time if you look at, I mean from a negative -- marginal negative EBITDA, we have close to INR 70 crores plus EBITDA coming in from the UAE business. So, there has been a substantial improvement in the UAE business.
Definitely we see that we should be able to maintain this volume numbers though it has been supported -- there is a lot of competition in the UAE internationally, but we are working out on different countries, going to Australia. We are working on -- even on going to U.S. We are strengthening our presence in Africa. The India continues to be one factor because as we see that India mostly both Birla and us are mostly fully utilized, so there is a volume which is coming into India. We are doing -- we are covering our southern region from UAE only besides there is some direct sale to UAE to some of the paint and other consumers.
Sure. That's helpful. Sir, second question is, can you provide some details on the market sizing and market share on both white cement as well wall putty? And have we retained our market share? Or is it something which has gone down? How should one understand this?
So I think market share has been maintained. The white cement market share is primarily between UltraTech and us. So it is ranging between -- I mean we have a market share of between 45% to 48%. So in that same vicinity, we maintai the market share of the white cement business.
And sir, wall putty?
The wall putty overall, yes, when we have a market share of around 22%.
Okay. And sir, what would be the market size like will it be upwards of 4 million, 4.5 million tonnes?
Yes, it should be closer to about 4 million tonnes. No separate numbers are given. We arrive at a volume number, see, because putty -- everybody we arrive at putty based on an assumption that whatever is the white consumption, and we assume there's some white consumption going into putty and arrive at the volume numbers. But otherwise, no separate numbers as per se are available.
Okay. And sir, last question on growth. Sir, after what you are doing in Panna, what is the reason that we look at. We have won a couple of leases, one in Rajasthan, one in Karnataka. So if one has to take a 5-year, 7-year view, how should we understand it? Like there's a lot of optionality at Panna, which is there. But will we be looking at other regions?
Yes. Like we have 1 definitely not. Jaisalmer is one, which we have a mining lease and even at Karnataka and a line at Panna and if Toshali we get [indiscernible] So this is what we do have plans and post Panna Line 2, we shall be reviewing and that definitely as the next option, we will strategize and let you know which of the options where we feel we should be going next after Panna Line 2.
Right. But sir, is there any time line, given we have won the leases in the auctions, does it state that within, say, 2 years or 3 years, we need to set up a plant and show value addition?
No. See, there's a continuous growth, as you have seen over the years, we -- at the time, I mean near to completion of Mangrol Line-2, we announced Mangrol Line-3. When we were about to be commissioned Mangrol Line-3, we announced Panna Line-1, and post within 6 months of commissioning of Panna Line-1, we announced Panna Line-2.
Sure. And the last question, for all the incremental growth projects that we have announced, are all of them backed by incentives?
Some of them are and we have to see, definitely, incentives are there. So because of incremental -- so presently, yes, Panna Line-2 also has incentives both I mean for Bihar we have to work out, but definitely for UP and MP there are incentives and Bihar also there are certain incentives, which we will be availing.
[Operator Instructions] The next question is from the line of Siddharth Mehrotra from Kotak Institutional Equities.
Perfect. Sir, just a small query. I see that your other expenses have been elevated. And the reason for that is attributable to increased branding spend. So could you just break down what sort of branding spends are there in this quarter, out of the total around -- total cost -- out of the total other expenses of around INR 468 crores?
So see, one, we are looking -- if you look at -- we have nearly not gone into the ATL. But still, when you see all the competition is going on the TV. Having said so though, we -- our major focus still remains on that non-ATL, but we have done a lot of working and we have done -- we do have a direct connect with all our dealers, we have done substantial in this quarter. What we did was an annual dealer meet conferences, which we had across both -- in both the businesses. So that is one of the reasons for the increase in the shales promotion costs in this quarter. Also, as we -- there has been some incremental spend on the IT automation, we are migrating to S4 HANA, which got implemented in the month of April. On first April, we migrated from the old HANA to S4 HANA. So there has been an incremental IT investments also in this quarter.
Got it, sir. If I were to sort of put a number in terms of a run rate for, say, the next 2 or 3 quarters, for the branding part, sir, can I have some color on that, sir?
So see, again, branding, we are revisiting. There is a lot of requirement from the marketing. So I mean though we would definitely like to optimize, I don't foresee a major saving in the branding costs because as we are expanding, we are entering new regions, so we will continue to see branding part of it, I would call it as a part of investment, and this needs to be done.
The next question is from the line of Navin Sahadeo from ICICI Securities.
Sir, just 2 follow-ups. So in the previous quarter, I think we commissioned the Karnataka waste heat recovery. Is that correct? I'm just comparing Q3 presentation with this?
So we just -- the waste heat gets commissioned in phases. There are 2 or 3 boilers, so you connect one boiler and then the second boiler. So exactly what we would say that waste heat it will get fully commissioned. We started off in the previous quarter with 1 boiler, then again -- so I think by end of this month, if we get fully commissioned. So the real benefits of waste heat would be seen partially in this quarter, some of it but major coming from the second quarter onwards.
Understood. That's helpful. It's a 15-megawatt...
It's 18 megawatts.
18 megawatts. Okay. And sir, my second and last question was about the CC ratio. So with the now addition of more 6 million tonne of grinding capacity against 3.3 million tonne clinker that we are like adding Panna Line-2 I'm referring to. So what could be then improvement in CC ratio we can see? I understand I think last year, we were more like 1.45, I'm talking about FY '23, will help -- will really help if you give CC ratio for FY '24 and how much we can improve on that?
See, CC ratio, actually, we are continuously improving upon because of the increasing in the number of the grinding units. Because the grinding unit production is mainly the blended cement. And we have actually planned the clinker in such a way so that the clinker, whatever the new line that will be sufficient for the 6 million tonnes of the grinding.
So even in this quarter, as you see, there is some dip in the trade, non-trade ratio. But even in non-trade, we are trying to procure and get more of blended cement orders. So which will help us in improving the clinker factor. And so we are still -- we do feel that and we also feel that you know the more grinding unit, so it is a sort of a green cement. So this is our focus area. Having said so, at the same time, we cannot discount in which area the incremental demand comes up. So if the majority of incremental demand is from the government projects and they only take up OPC then it may -- we may have to take up, otherwise, all our trade, wherever we are investing so much on the trade, on our branding, on our customer service and all, so which is helping us in maintaining our market share and improving upon the market share and maintaining the trade ratio, which would also help in maintaining the blended cement ratio.
Understood. I was only asking if this 1.45 could increase to maybe...
We have to see. Yes, definitely, we are working towards it. It should improve.
Sure. I think you mentioned trade, non-trade. What was it in Q4 and for the year?
Q4 trade was slightly lower to 61%.
So blended was higher.
The next question is from the line of Keshav Vijay Ratan Lahoti from HDFC Securities.
I just want to get a sense on the paint business. We can see sequentially, the business is down. Revenue is down by 35%, though we understand some seasonal factor is there, but still there is a sharp dip in the business and when the business is ramping up. So possibly INR 300 crores revenue in FY '25, could be a tall task to achieve?
No, no, I don't think so. From where -- the sequentially, the numbers have reduced.
So quarter 3 paint revenue was INR 146 crores. And this quarter, you said INR 30 crores.
No, no, no. Sorry, this quarter, it is INR 51 crores.
INR 51.
Yes. For the year, if you see, we did INR 153 crores. We took over from Acro, which was around INR 70 crores, INR 80 crores. So vis-Ă -vis Acro INR 70 crores, INR 80 crores, we say that is there. We have just doubled in 1 year from INR 70 crores, INR 80 crores to INR 153 crores. And our -- the target for FY '25 is about close to INR 300 crores -- about INR 295 crores is our target for INR 295 crores, INR 300 crores for FY '25.
Understood. Got it. Do you have any interim TSR target like FY '30, you have given, but interim something like FY '26?
So see, the TSR target as for FY '26, today, we are at 16%.
No, we have actually -- we target for 2030, we have said 25%. And we are gradually increasing it. So hopefully, it should go up by, say, 2% every year.
The next question is from the line of Amit Murarka from Axis Capital.
I just wanted to clarify the paint revenue. You mentioned INR 30 crores of INR 53 crores? I just got a bit confused.
Actually, see the overall revenue for the year is INR 153 crores. And in this quarter, it is INR 50 crores.
INR 50 crores. Okay. And some of it is booked in stand-alone as well, right?
That is the point actually means the sale from the subsidiary is INR 20 crores and INR 30 crores is through the stand-alone. So that's why you are confusing between INR 30 crores and INR 50 crores actually.
Got it. Now I understand. Okay. And the clinker ratio would have been, what, 0.62, 0.63 in FY '24?
No, our clinker ratio is 0.66.
In FY '24?
Yes.
Okay. And based on whatever you see in the market, and I believe you also said that even though the share of trade dropped a bit in Q4, blended actually increased. So in that sense, like is there a number of clinker ratio you're looking at from, let's say, from FY '25 or '26 perspective?
No. See, the overall because -- it is a market situation because if you see the number, the blended cement for the year as a whole, so we are at 67%, right?
So, actually at the grinding units, the clinker factor is around 60% only or less than 60% at all grinding locations.
Ladies and gentlemen, this will be the last question for today, which is from the line of Shravan Shah from Dolat Capital.
Just again, a clarification needed on the paint. So 2, 3 things. First is INR 707 crores white consol revenue for this quarter, does that include the INR 51 crore paint revenue?
Yes, paint and Fujairah.
It includes Fujairah and paint, both.
Okay. So for full year at consol level, we have booked INR 153 crores of paint revenue in the white as we have shown in the presentation of INR 2,750-odd crores.
Yes, yes, INR 2,750 crores includes INR 153 crores of the paint revenue, right.
The participant has left. We will take 1 more question, which is from the line of Ritesh Shah from Investec Capital.
Simple question, sir, you indicated cost-saving number over 2 years. Sir, do you think this is something which is replicable industry-wide. The reason to ask this is 2 largest companies have also given [ stiff ] cost- saving targets. So is it like industry cost curve will actually go down? Or is it something which is more company specific?
See, again, what -- it depends on where, I mean, I've seen, yes, Ultratech and which they have given their numbers. So see, today, everybody is working -- the entire industry is working towards cost reduction. So every company may have different avenues and opportunities for cost reduction, it may depend where they are in terms of green power, where they are in terms of AFR and other things. So that will really see where the -- each position is there. So we -- what we have identified INR 150 crores, INR 200 crores is what we see avenues which are possible in our case.
Okay. Sir, if I have to rephrase a question in a different way. If one had to look at, say, logistic costs, which you indicated, what can be the optimal primary and secondary lead distance that we are looking at?
See, that's a very difficult question to answer what will be the ideal -- again, it depends on -- see, sometimes logistics lead this -- there could be a higher lead distance even if you can -- but your ex-gate realization is higher. You would still -- you will not mind in spending a higher lead distance cost. So everything normally, we try to do it on what is my ex-gate realization.
Okay. Sir, that extends on the secondary lead part. On the primary lead, would there be a thumb rule basis...
No, it's on the primary lease -- it depends on the primary lease also.
Okay. Fair enough. And sir, second question, basically, we are doing a great job on green energy. I understand basically, there is something called peak load, but hypothetically, if I had to assume, sir, we have 1,000 megawatts of power requirement. What is the broad ballpark number that we need to have a minimum of thermal power? What can be the optimized WHRS and wind? Again, I'm just trying to get a sense how much of incremental cost savings can be...
As far as the WHRS is concerned, it's only linked. You can have WHRS only in the kilns. You can't have WHRS anywhere else. So you may have whatever grinding and your split grinding locations, the only green power is at those locations could either be solar or wind. No other type of green power would be at the grinding stations.
Right. Sir, if I rephrase it, if one had to look at the mother unit, there is a hypothetically 1,000 megawatt of requirement. Only where the klin is and assuming that there is a small view over there. Is there a broad ballpark number, a thumb rule that one can look at on optimized metrics?
So on our mother unit, you could have critically very high 75%. And this is what we feel that this is ultimately target what we have given 75% green power. So whatever is the requirement at all locations, we're trying to get 75% green power at all locations.
Ladies and gentlemen, due to time constraints, that was the last question for today. I will now hand the conference over to Mr. Vaibhav Agarwal for closing comments. Over to you, sir.
Yes. 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 the participants for joining the call. Thank you very much, sir. And Michelle, you may now conclude the call.
Thank you everyone for joining.
Thank you, members of the management. Ladies and gentlemen, on behalf of PhillipCapital India Private Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.