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JK Lakshmi Cement Ltd
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Ladies and gentlemen, good day, and welcome to the JK Lakshimi Cement Q1 FY '20 Earnings Conference Call 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 Phillip Capital India Private Limited. Thank you, and over to you, Mr Vaibhav.
Thank you, Melissa. Good evening, everyone. On behalf of PhillipCapital India Private Limited, we welcome you to the Q1 FY '21 call of JK Lakshimi Cement. I need to highlight that JK Lakshimi Cement is also the holding company of [indiscernible] and therefore, this call is also about the performance of [indiscernible]. On the call, we have with us Mr. Arun Kumar Shukla, President and Director and Sudhir Bidkar, CFO of JK Lakshimi Cement. I would like to mention on behalf of JK Lakshimi Cement and its management that certain statements that we made or discuss on this conference call may be forward-looking statements related to future developments based on current expectations. These statements are subject to a number of risks, uncertainties and other important may cause actual developments and results to differ materially from the statements. JK Lakshimi Cement and the management of the company assumes no obligation to publicly update or alter these forward-looking statements whether as a result of new information or future events or otherwise. I will now hand over the floor to the management of JK cement for the opening remarks we follow Q&A. Thank you and over to you, sir.
This is Sudhir Bidkar from JK Lakshimi, along with my colleague, Mr. Arun Kumar Shukla, welcoming you for this Q1 FY '20 call. You would have seen the results, and we don't have any comments ahead other than that. Now the floor will throw the floor open for question and answers so that we can take many questions.
[Operator Instructions]. We have the first question from the line of Shyam Sundar Sriram from Sanken.
Dated in our press release, clinker capacity utilization, almost touching 97% and cement utilization at 85%, with such strong utilization and our geo mix strategy, it appears our operating performance could have been better. The early of improving EBITDA that we have embarked on. What according to you could have been better on the realization cost trend and where scope for EBITDA improvement?
Yes. Yes. Thanks, and good evening to all of you. I'm Arun Shukla from JK Lakshimi. Yes, I think a couple of points. I think you could have done better because if you look at volume, which is order our ESR realization also looks alright, okay, which is in line with what others are doing in. 2, 3 points where I feel would have done better, of course, first, better volume, which I think we do [indiscernible] Okay, 35% capacity utilization of cement. So we could have done better on volume one. And we would have considered operating cost, which is a little bit higher. And third, I think if I'm looking at what others have public till now, employee cost. I think -- these are the three elements I think we have a [indiscernible].
On the -- how about volumes, which regions if you can share some regional perspective between Northeast and West which were some regions from a utilization, how are the utilizations in these regions for us any perspective that you can share and how that has improved sequentially or year-on-year or decline, that would be helpful to understand, sir.
Right. So I think our key players [indiscernible]. And I think it's lower than 90% overall is 95%. I really kind of give you a sense as to where we could have done a better volume. [indiscernible] because as I told you during my last call also that we have for Geomix strategy wherein we plan to sell more in the areas where our realization is better. And if you recall, I suffered a setback on account of iconic in Gujarat during the part of [indiscernible], right? And in the month of April also, March end, there slowly and there are labor unavailability in part of Gujarat because job during the post holy a little higher than other parts of India, right? I think there, we have a better volume than what we do normally, what we have done last quarter. And also, I think to [indiscernible] India because post this side loan, in fact, Rajasthan was also impacted by I think our volume went down. And if you know and on volume is about 25% in North and Western part of India. So I think that is what has impacted our volume.
Whatever information I am having. We have grown better than in the [indiscernible]. So as for my estimation, I think growth is about 16% in eastern part of India, and we have grown more than 16%. But in case of an reenact best if you take in that we are in line with it. But central part of India which is in our case, Ajana western part of Hindi, we are lower than the industry. So that is what impacted because if Northwest volume goes down in overall volume goes down on. And this also impacts our realization because in Northeast part is better there. So I think I would say the regional advantage which impacted our performance in quarter 1 of this year.
So as we look forward, while I understand this is a case we are getting into a seasonally weak quarter with the monsoons setting in. But post that, do we anticipate this situation to get remedied as we get into Q3, Q4?
Yes, yes, for sure. I think this is just more dependent. And being kind of too heavily on North and well, that was natural is. But I'm pretty sure this is the most phenomenal going to just come back to originating?
Understood. Understood. Sir, on the operating costs, other than the employee cost relieve aside the staff costs, where else do we think site lies scope for betterment?
I think we could have done a little better on our two, I think, because we had one breakdown in one of our plants. So with lease recovery products was lower than last. And that is one area that we could have factor. But unfortunately, I think we had one breakdown that impacted our power cost regret. One area I think we need to really work on going forward. Apart from that, I think power and fuel, we have been always in line with industry. In fact, better than some of [indiscernible]. So we are better than them. But the power and fuel, I think, is going to give a further maybe leeway going forward, right? We are tying in that. Power cost per se, we are a little bit higher because of the reason I told you let's say WHR production. So this is what it is, I think some [indiscernible].
Understood, sir. On the capacity expansion, post the UCWL expansion that is underway. Is there an inorganic strategy as well? If so, what are the white spaces from a regional mix that we'd like to address and your thoughts on the upper bound on valuation if you can share on those aspects.
After UCWL expansion, which -- our capacity will be close to about 18 million tonnes. And we have the vision of going up to 30 million tonnes, as we mentioned in our earlier calls also, and that gap is to brownfield and the brain field expansion. [indiscernible] then for the tracing therefore. And we have, as we mentioned in the past call and calls, we have two mines recently been awarded one in Rajasthan and Kacha Gujarat. So those greenfield can take us to 30 million tonnes per se.
Sure, sir. Sir, I was worth trying to understand if there is any thoughts on inorganic acquisitions, which is also part of this? And if so, how would we think on the valuation.
We have plans to reach 30 [indiscernible]. But we always evaluate that always if it comes at the right valuation with evaluate.
Okay. And what would be the upper bound, sir, for such valuations, anything internally that you would think of and you can share?
There's no limit assets. It has to make synergical sense to us. That's all.
I think one thing which we see is active because we are not going to grow. [indiscernible] Under rating that has a sense and what Mr. Said had to really add value and the right value if you [indiscernible] these are the two primary criteria may be okay.
Management, before we move to the next question, we would like to reconnect your line, sir, the audio from a line is breaking. ladies and gentlemen, we have the line for the management reconnected. We will take the next question from the line of Prateek Kumar from Jeffries.
My first question is on your guidance. Last quarter, we discussed targeting around 19% volume growth and INR 1,000 EBITDA per tonne by the end of this year, exit of this year. Where are we in terms of that? And after a very weak first quarter results, would we want to revisit the guidance.
Yes. So I think this is more the target we have taken 19%. Typically, I think to used to be always good, right? But I told you between our geographies, I think we had some [indiscernible] the cyclone and a little bit longer layout post [indiscernible]. So that impacted for this thing. But still, I think we hold on to our volume growth, what we plan at the beginning of the year. There is no revision at.
But we are already operating at a very high utilization, both on clinker and cement. So how the growth could pan out like in following quarters, which will result into such 19, 20 kind of volume growth?
Yes. So the plan is that we'll have incurred limited right?
Sir, your line is still not clear. I think it's a lot of disturbance there.
Am I audible now?
So one moment, let me try this again. One moment. Please go ahead. Participant, could you repeat your question, please?
Yes, I was asking that high utilization, both of cement and clinker. How do we plan to achieve the guided volume growth?
Yes. So UC will be taking out the clinker from October this year, right? I said during the last call also that one, I think we are going to use to link [indiscernible] still we have that another 10% capacity I think headroom. So that is one. Second, we do have some taps with external fees where from we can grind cement. And we do have some tie-ups and even now also, we take a little bit volume out of that, right? So that welding capability will complement with outsourced units which we have already tied up. So second. So these are the two, I would say, levers that we are going to use to rest that level of growth, which we have in resale for this year. our own landing station capability utilization; and second, how source utilization out of the claims at which we are going to produce from that come works.
And what would be the runway of our unit EBITDA from current quarter is INR 2,000 by the end of this year?
So here, I think INR 1,000, this is what I think our plan is and all factors which we have kind of put in place is internal, right? And we are moving, I think, in the right direction. In terms of geo mix, we have kind of moved in the right direction. I think I told you that high realize is an area, 75% volume we are selling now which used to be about 70-30 in favor of Northwest [indiscernible]. Now it is 75%, 25%. So there, we have moved very well. Second, I think within the regions also, we are optimizing our volume. So let's say within North West, the areas where, let's say, Western market, where we get better realization, so sending more volume in that area. And within North wherever I think those markets which are closer to our planned and remunerative, we are going to sell volume. So that, I think, we are doing all right. Second lever, I think I mentioned you on premium products. So we are progressing very well. Now we have reached about 26%, 27% of premium product, which was the last year, we closed at about 22. So there also, we have improved very well. So that is second. Third, a blended, I mentioned you that we want to go to about 75%. We have reached about 66%, 67% now.
And that is because of the higher volume in Western market, which is predominantly OPC market. So that is what the reason is. But still, I think we are working on reaching to 75% of our blended cement volume. And next, I think on lead and other supply chain efficiency, which we had invested. So that we are working on, we are using technology to versal transport management we have deployed it. And that has started giving benefit now. So probably in the coming quarter, I think we'll get benefit from logistics end also. Another thing which I mentioned before was that we are working on alternate fuel capabilities at different plants. Probably, I think I'm sure that by October, we'll be commissioning our AF capability silo. And our plan is to take our PSR from currently 4% to about very quickly once I think that facility is there. So that is another actions which I told all of you before. And of course, lining up with the AR capability at our US Cement Works Limited as well. right? We are putting up some improved capability at our gold plant with a very low CapEx.
So that is also going to give us the benefit in terms of increasing our [indiscernible] so these are the actions which we are taking. Some of the actions I have already, I would say, partially 5 and some of the actions, I think will get realized in coming months. One of the examples is our capabilities, which we are going to commission at Siri in the month of October. Finally, we are also working on renewable energy. I told you that in a captive mode, we are putting a 56-megawatt solar power plant in Doro with a third-party with 26% effective from our end. So that is also going to get commissioned in the month of October. All these things put together, I think I feel that we are on right track and we'll that target, which we have set for ourselves to achieve INR 1,000 EBITDA. When I spoke to you about 6 months back, that time line was 2 years. So still, I think 18 months are there and will reach there.
One more question on your capital enabling resolution for INR 2,000 crores of capital. So by what time period we are looking to utilize with capital? And is there a time lapse for this?
There's no time left once we have taken that enabling resolution, we can do the fundraising within a year.
Okay. Thank you. We would like to remind [Operator Instructions]. We have the next question from the line of Kamlesh Bagmar from Lotus Asset Manager.
Sir, is enabling regulation, 2,500-or-so. So like I know we are in active discussion for Sandi cement acquisitions. So like sir, based on that [indiscernible] acquisition, it suggests that we are looking for around INR 45 or 50 acquisition or on situation, assuming like the INR 2,000 crore debt at an [indiscernible]. So like what's the thought poster? And if we see a positive or if we succeed to get at a particular asset, then what about the organic expansion? Because if you see east market, we are the smallest player there, like the all the players who added capacity at your time when your plant came in Durg, all have almost has grown 3x of their capacity. There, we have not expanded capacity and therefore also looking at the second line. So what programs or what's the thought process there? Because if we go through this particular INR 5,000 or INR 4,500-odd acquisition, we would be some of the capacity of the funds to fund our organic expansion. Any -- if you can share some thoughts for us around that.
You are right to comes that we have not grown -- that does have grown in the Eastern and the reason which we have been saying for quite some time has been that due to the non clarity on the railway siding, we have not been able to expand our capacity. Now the good news we would like to share with all of you is that finally, we have got the approval for setting up the rail realize whatever was the impediment those have all been cleared and the approval is in place. So that gives us an opportunity to expand at a fast pace with the railway siding in place to in the Eastern region and reach out to the markets, which are having high realization markets with movement of clinker to the railway sidings. That should be in place in about 9 to 12 months' time. now that the approval is in place, and the visibility of that coming up in the near future is quite clear now. Yes, that was the reason as to why we have not been able to grow yes, then once we complete this UCWL expansion, then there could be a possibility of another brownfield there that coming in. So you are right to that extent that we have fallen back. We have not been able to grow in the East as fast as others have growth. that now that clarity has come, will be in line with the growth of the other players.
But if this and -- and then how this whole organic expansion will tape out is because entire capital would get blocked there. So how would we grow our expansion -- organic expansion because honestly, like say, INR 45 to INR 100 crores or INR 5,000 crores is spending at this particular inorganic acquisition. Actually, it would be around -- your Gujarat would be around 50% of your capacity. And on top of that, there are no good backup plans in case of Changi for that movement to the Western like the Maharashtra or the Mumbai market, you would have to spend another INR 500 crores, INR 600 crores over there. So how do that? Because first the size of our -- we should only be focusing on the organic expansion.
We are focusing on the organic expansion only. We evaluate the quantity and if it comes at the right player makes synergical sense, we do take into account but our focus has always been in the past also on the organic growth on.
And lastly, on the -- like say, for last 3, 4 quarters, we have been so upbeat or like say, we have been so woken about this geo and geo mix and then optimizing our NFR. But honestly, for the last 3 quarters, it's no way visible. If I compare it with all the peers, the East or the Gujarat market, they are way ahead of us in terms of margin. I sawon the consolidated margins, we have done hardly around INR 615 and our like, say, the gap with all other players now that has expanded to around INR 300 crores, INR 350. So what's happening on that particular part. Because if we are impacted by the old storm or the blur on our -- other players are also impacted. If you see a indecent, their volumes have increased by around 18% year-over-year. while in our case, like we have expanded our growth is hardly around 5% year-over-year.
What [indiscernible] you are saying is absolutely right that we have been talking much on that bridging the gap but barring this quarter, especially this quarter has been pretty bad for us. We were able to bridge, if you see our gap between the peers, we were able to narrow it down from almost to close to about INR 200. This quarter was a setback for us. You are right that the rains and cycles impact everyone. But for us, it was slightly different in the sand that it had two regions which account for almost 70% of our sales, Rajasthan and Gujarat. So that was the reason as to why while others were able to balance it out with the increase in sales from their other regions, for us, there was no backup from the Eastern or the northern side. The impact has been severe for us more than other players because of Rajasthan and Gujarat accounting for almost 70% of our sales. But we are confident that going forward, we'll be able to again bounce back and bit this gap. Your concerns are well-founded that we have been talking big and not have been able to deliver. But barring this bad quarter, unfortunately, was for external results, we are quite confident we'll be able to bounce back and that gap going forward, as Mr. Shukla has explained in detail on various parameters through which we'll be able to narrow that gap. And this debt magic figure of at least four figures of EBITDA in about 12 months time to whatever we have projected.
[Operator Instructions] We have the next question from the line of Shravan Shah from Dolat Capital.
Yes. Thank you. Sir, just to reconfirming when we are seeing a 19% volume growth. So this is on the consol volume that we have done in FY '23 on that 19% growth, still we can achieve.
Yes, yes. over April 22.
Yes. So that means for next 9 months, as it would be a 23% plus kind of growth that we have to do. So just to confirm from at least in June, July, have you seen that kind of a run rate that kind of growth?
That is what we are trying. I think arithmetically, we cannot put on a pro rata basis because [indiscernible]. And I told you that October, we are going to have clinker also in place. right? And from October. I think we'll have a good impetus on volume growth because we'll have clinker. You know that 97% printer utilization we have already done. And branding. So once I think clinker is available and we have winning capability, which is available at different locations, will that maybe I think a growth rate is going to be much more beyond October. July, August, September, typically, I think 2 months. So definitely, we'll do better than us. But I would not say that we are going to kind of run at the rate of.
Okay. Got it. And second aspect in terms of though definitely Mikasa has mentioned in the previous reply, INR 1,000 EBITDA that we are reiterating to reach in next let's say, this year, considering the first quarter broadly. Just trying to understand in terms of the full year FY '24, the last time we said that thing gets to broadly, where one can see on the full year FY '24, we can look at.
So I think I'll let you know. I think we are not ready with that what is the landed kind of right end of I think I'll let you know.
Okay. Sir, I need many data points for this quarter. So just staying with the -- if we can say the consol stand-alone clinker sales than trade share for this quarter distance for this quarter, rail mix for this quarter, gross debt and cash stand-alone and consol as of June.
I will start with the reverse order the debt number, stand-alone, our debt as of June on a stand-alone basis INR 770 crores. And on a consol basis, INR 1,950 as of June, right? and a cash balance of about 900 on a stand-alone 950 on a consol basis. The other question regarding the sales you had asked about the railroad mix and vehicle sale. I think we are very heavy on road [indiscernible] 10% is rail and 90% is growth.
Okay. Trade, sir, for this quarter, sir?
So is the quarter 55%. 55%.
Because we -- for the last 3 quarters, we were saying that we want to reach to 60%. And in last call, we said that in March, we reached 2%. But...
Being bothered about trade nontrade, we are focusing more on the -- as we have been expecting on the geo mix. If certain markets is higher than the trade in the other zones, obviously, we'll sell more in non-trade, right? So that was the reason is a better parameter for us. Anything which adds to the ultimate EBITDA. That is a -- but so we give to GX than to trade, non-trade. Ultimately, yes, with even a particular market that nontrade is higher, our focus will be to focus trade their trade and wanted and then go to the market where retail is lower than the noted of the high price market.
Yes. lead distance, noncement revenue and that then the final leg of volume in parts, [indiscernible].
Sales is about 400 overall.
Overall, 400 kilometers.
430-odd in the northern side and about 300 in the eastern side. And about your clinker sale. We have done a total clinker sale of about two [indiscernible] out of the total in this quarter of INR 2 lakh is a big clinker sale.
Non-cement revenue and RMC revenue for this quarter?
You are doing a very detailed analysis. INR 133 crores is non-cement revenue.
133, Sir?
133. Out of which 63% is the R&D.
Okay. 63 is R&D. And broadly, in terms of the margin for that last quarter, it was 5% for non-cement revenue. So will it be the same? Or has it improved?
Fallen to 4%. On the sale of INR 133 crores out of the total sale of INR 1,633 crores. So about INR 1,500 is the -- our cement sales and 133 is the noncement sale. And on the non-engine operating margin is 4%.
We have the next question from the line of Parth Bhavsar from Investec.
I have a few questions. So the first one is on that you mentioned earlier that we won a few leases in Gujarat and Rajasthan. So wanted to understand like what is the result, like what is the premium paid over there? And by what time do we plan to access this growth optionality?
[indiscernible] .As you can see, I don't have the figure readily available, but it has not been exorbitant premium, which we have paid. It has been almost a year that we have acquired those mines. That is number one. Number two, we are focusing initially on the Nagar mines in Rajasthan. We have started the land acquisition process and cut will be after some time. reserves also will let you know separately. But that is all in public domain. We have that right now with us in the call. But in both the data and the premium at which that those mines are on as well as the reserves available are in public domain. Still, you can send a mail response to that. I don't have preview available here.
Sir, the second one was regarding -- so how should one read into this debt as lease INR 2,500 crores. So what would be -- what dispute will be used for?
Sorry, come again?
So this INR 300 crores that we are planning to raise. This will be used for organic and organic expansion?
Yes, it is an enabling resolution because if we have to grow organically or inorganically, we don't have to rush back either to the shareholders or to the Board for that approval. It's enabling and we have the levy of doing the fundraising in about a year's time. We are not doing it...
Okay. Okay. And sir, there is one question on related party transactions. So if I look at H1 FY '23 numbers, we have shared in that there is a number of INR 300 crores, which is under purchase of cement. So this is pertaining to what exactly? again. There's a number of INR 31 crores, INR 32 crores under a purchase of cements and others. This would be [indiscernible].
Just give me a second. [indiscernible] cement putting trade is there. That is a...
No, no. And related to the donation [indiscernible]. You're talking of which report you are reading, sorry.
Is related party transaction that we've disclosed on H1 FY 20 basis.
Yes. That is basically the normal purchase of clinker and -- or the cement purchases, which we are doing from our subsidiary to cement works.
Sir, can you help me with the clinker and cement volumes like both in value and volume terms related to this transaction? Is it possible?
Yes. This primarily, it is cement, which we are sourcing from the port. It is about 2.5 lakh tons. And I'll explain it. [indiscernible] on a stand-alone basis, have done a total sales of 29.25%, right? You can note down, right? 29.25% is the total sales of JK Lakshimi in this quarter on a stand-alone basis. Right which includes $27.64 of cement and 1.61 of clinker. And you add the 25.15 lakh sales of UC as well. That, again, breakup, you can note down. And out of 5.15, 4.71 is cement and 0.4 is clinker. So the total of JK Lakshimi 29.25 and 5.15 is 34. But in the consolidated, we are reporting 32.5. So the difference between the submission and the console interunit sale of 2.35%, for which that 300-watt figures you are talking to the related party transaction of the internet sale of cement between JKLC, which is nonopen console number. So on a consol basis, it is 3 lakh tons of cement and 2.05 lakh tonnes of clinker making a total of 32.5.
And this would be all cement. It is all cement.
Going forward, as we see the production from the clinker line of UCWL coming -- it started coming in from October. There will be an increase in the clinker sale from Hudak to JK Lakshimi in the third and fourth quarter. So.
Okay. Until the time grinding unit at comes up. SP1 Yes, you're right.
That is 6 to 8 months away from their clinerization line. So until that time, they are grinding when it comes up, we will be using that claims ending at our locations.
Okay. Okay. So sir, would it be possible to share the same numbers for you in FY '23, like I could know it made to you [indiscernible].
The full year, I don't have it readily, but you can mail it and I'll respond to that.
We have the next question from the line of [indiscernible] Capital.
So I just wanted to clarify, the target of INR 1,000 per tonne is including the fuel cost benefit that we're seeing for excluding that.
I think this is excluding right, all internal efficiency because we wanted to reach that gap of about 300 [indiscernible].
So industry, I understand is having or estimating like a INR 300 cost benefit from foreign fuel cost. So then basically, we should expect 1,300? Is that understanding correct?
I think our estimation is a little lower on fuel cost this thing because we are already there at about 2.3 now around. Maybe response is on -- it started going up. I don't think the 300 headroom is there for fuel. This is what my statement.
But the still additional over and above 1,000.
Yes.
And so, earlier, I know you had given a roadmap for reaching 1,000. It's been, I think, almost a year since we had spread out that road map. So how much progress do you think we have made on geo mix and other aspects around cost and all?
That is what I was trying to explain that on geo mix, we have been able to optimize to an extent about 25% of volume in north and west part of our geography.And within North, I think the core areas, so that is one. Second, on premium product, we have improved quite a bit about 37%, okay? So that this is second. Third, I think I told you that logistics using technology, if you can take some advantage and revisiting our distribution meters. So that project is in progress. So probably, I think we'll get this benefit in the coming quarters. And third was on alternate fuel capability, which we are setting up at Sirohi and some kind of improving capability at So this is what I think progress we are making some of these actions, which change you before are working progress. So maybe another time to some of the actions will get uctified. Then we'll start getting benefit -- we are also working a reliable energy. As to how we improve our renewal energy proportion in our total consumption. Right now, we are close to about 30%. Our plan is to go to about 37% to 40%. So for that, we are setting up 56-megawatt under captive mode in East and another 7 megawatts at Curt. So these projects also will get concluded in the next 3 months' time at deal and also. So that will also gain some benefit.
Got it. But would it be possible to have some numbers around it? Because on realization, if I'm not wrong, you had mentioned like 150, 175 will come from realization. So have we got like maybe 50 to 100 out of that already? Like how should we think on number terms on these?
Definitely, I think we have got out of, I think, as I mentioned, about 250-plus around on realization rate. So definitely, we have got about 50 to 75 out of that. And if you look at our realization, I think we are almost think we are reasonably already placed with the leader in the industry.
And also like on the clinker purchase that you would do from [indiscernible] just to understand like how will the cost work on that, like purchase cost? Will the margins be split basically between the potentiation on that.
They will be doing it on a cost-plus basis.
Okay. Okay. Sure. And lastly, any thoughts or clarity around margins in UCWL, like SP1 25 2600, we can expect.
Yes. We are -- we'll be certainly doing it once we graduate in JK Lakshimi to the new regime of 21%. And for us to graduate, we need to first exhaust the mask credit outstanding which earlier used to be INR 200 crores has narrowed down to now INR 140-odd crores. So maybe in a couple of years, we'll exhaust that at grade entitlement and then we can graduate 2% and collapse the structure. So maybe 2 years away still.
We have the next question from the line of Rajesh Ravi from HDFC Securities.
Yes. My question pertains to first, could you share the clinker production at represent alone entity?
production of clinker in the stand-alone entity in this quarter, our clinker production was 16.65 lakh tonnes what it was 3.88 lactone.
What was the fuel cost burn on a console per kilo cal.
Fuel cost in this quarter on KL basis was 23%.
And this was what number?
In sP1 Q4, it was INR 242.
Okay. And how are these trending as we -- in the month of July?
In the coming quarter, we expect it to further go down from 23 to 25 or so.
Okay. But why is this softening you're looking at a very smaller number because [indiscernible] prices and all have come down significantly. So the current spot crises. Then to reflect on your numbers?
Time lag between the cost reduction and its impact on the P&L is ranging between 4 to 6 months depending on which you are carrying. And July will come. based on the inventory levels in the coming quarter, it will be slightly lower at 2015, likely to be.
Okay. And this 40-megawatt solar capacity which you talked about, this is on an installed basis, 40-megawatt, which would have effective 10-megawatt availability or it is some 40 megawatts, which you will be sourcing.
You are right on an installed basis. Based on the PLF about 20%, 25%, you are right affecting availability could be to 10-megawatt only. But the big advantage in that arrangement, especially in the state of [indiscernible] is that they allow the banking of that power generation and can be used in the non generating as. So that is a big advantage.
And what would your first thing would be what just overhead cost?
Costing since we are not making an investment, our debt cost would be about close to INR 5. Read as opposed we are not making any capital investment only a 26% equity stake costing.
And sir, what would be your grade cost currently?
It is most about INR 7.5 in East. So we are getting at INR 5 per unit, there is a INR 2 plus saving.
Given that the solar power plants have such a strong event period, would it not make better businesses to have its captive then go it through. Is there any other cost which gets up like any incentives which, like you said, the banking and which prevents you to having on your own books and just incur the overhead costs?
You have adequate land for a 240-megawatt you have to have huge land bank available? The first four most quarters. But ultimately, yes, it makes sense if you can have that sort of land to do it in a CapEx mode as we are doing in Rajasthan, where they are imposing even on the captive they are putting the cross subsidy and the electricity duty, et cetera. Yes, in Rajasthan, it is not allowed. So we are, in fact, doing the reverse thing in therefore, there's megawatt of power project, which we had started in the captive third-party rule. Now eventually, we have post and ported under the CapEx mode the policy of the Rajasthan moment. Ultimately, it makes better sense to put if you can and have the necessary resources and the like to put it is a captive or the CapEx more. But the policy of the government has to support that.
So then last question on the balance sheet. We are momented to it of 1x and given the market chatter of you bidding for Sangi. While you confirm I agree, I accept that. But could you give us a sense to the minority shareholders, what are your peak net debt targets or liver which you would be following or Nobu area, at least because given that JK LAkshimi repeated balance sheet after long, and this has helped the stock move up. So could you give us a sense what sort of leverage number you're looking at why you're pursuing your growth?
First and foremost, we don't distinguish between the majority shareholders and minority shareholders. We take all the shareholders together. They are part of the shareholders' family. That is number couldn't treat anybody as a minority shareholder. Even if they are not part of the promoter group. We have never hit that bifurcation or distinction. That is number one. Number two, whenever you are doing any expansion for a temporary period, you may sacrifice certain ratios. So long as you have a clear visibility that going forward in the next couple of years, whenever the commensurate EBITDA from the -- either the new plant or the expansion, which you have done comes in or any acquisition, which at like take the case of [indiscernible] they have just completed the rights issue of INR 450 crores. Prior to that, their EBITDA used to be in the range of about INR 150 crores. And they have contracted a debt of INR 1,100 crores for the expansion. Just see -- just before the start of the expansion, the existing debt of INR 500 crores together with the INR 1,500 crores -- INR 1,100 crores of the expansion debt, the debt number looks like INR 16,500 crores on an EBITDA of INR 150 crores, which looks haywire. But movement that expansion, better starts slowing it, that number gets narrowed down and comes within the visible range.
So also, whenever at a control level, you also see either you go for the expansion or any inorganic growth. For a couple of years, 1 or 2 years, it may be haywire. But so long as we have the clear plan that it will be narrowed down to the range of about not the debt-to-EBITDA not more than 3 or 3.5 MAX. That should not be a concern being a temporary phenomenon. So long as the clear visibility is there. On talking on a prudential loan, yes, you're right, 3 to 3.5 is the out-route limit. But can we send.
We have the next question from the line of Sanjay Nandi from VT Capital.
This is for opportunity. So in this guidance on the idea coal you are holding as of now, like kind of 3 months inventory or what has the shipment as of now?
Sorry, come again, please. Can you repeat?
Yes, yes, sure. Can you please guide us on the core inventory on the pet cooking wins which we're holding, like what kind of CMO what is the shipment have been done for this quarter? If you can throw some light on that.
We are holding about 100-odd days.
We have the next question from the line of Mudit Agarwal from Motilal Oswal Financial Services.
Then my question is point again on the [indiscernible] the organic growth opportunities, what valuations we are comfortable to acquire and sector acquisition. What's your thoughts on this?
We have not signed any number for any acquisition value. It depends on what benefit that asset drives to us and whether it makes illogical sense. So it could be a different figure for assets located a different place. ultimately has to be seen in a case-to-case basis. There is no fixed number there, too.
Okay. And just last question on the net debt. What is the current consolidated net number earlier.
No, no issues. I'll read out that. It is -- net debt is of INR 1,000 crores as on date. INR 150 is the gross debt and 950 is the cash.
Ladies and gentlemen, we will take one last question from the line of Stam Kumar Shiva from Axis Securities Limited.
what is our CapEx guidance for FY '24 and FY '25 on the stand-alone level?
We have effect on 2, 3 accounts, which is presently under way. We are working on a wasted recovery, as we mentioned, of about 3.5 megawatt and there's an AFR project going on. We are doing some AC blocks at [indiscernible] plus the solar power also. All in all, about INR 100 crores of CapEx is lined up. And now that the approval, as we mentioned in response to our earlier call, the approval for the railway siding and the conveyor belt having been there could be some CapEx of about INR 100-odd crores, INR 100, 150, maybe around in that range on that. So maybe 300 plus 100 around INR 400 crore in this year.
400 in FY '24?
Yes, out of which we have already done about 50 odd in the first quarter.
Okay. And sir, what has been our fuel mix in this quarter? [indiscernible]
Yes. We have done about 40% coal, 43-odd percent pet coke and the balance is the other biomass and others.
Okay. And sir, you said about the premium cement is the 25 on overall sale or trade sale.
27%. Trade sales. It is always on trade sales.
Ladies and gentlemen, that was the last question for today. I now hand the conference back to Vaibhav Argawal [indiscernible].
Yes. Thank you. On behalf of PhilipCapital India Private Limited, we'd like to thank JK Lakshimi management for the call and many times the partner joining the call. Thank you very much for [indiscernible]. Thank you.
Thank you to all the participants.
Thank you. Ladies and gentlemen, on behalf of PhillipCapital India Private Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.