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JK Lakshmi Cement Ltd
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Ladies and gentlemen, good day, and welcome to the Q3 and 9 months FY '23 Call of JK Lakshmi 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 of PhillipCapital India Private Limited. Thank you, and over to you, sir.
Yes. Thank you, Aman. Good evening, everyone. Personally, apologies for this delay, which was one of the connectivity issues. On behalf of PhillipCapital India Private Limited, we welcome you to the Q3 FY '23 and 9-month FY '23 call of JK Lakshmi Cement. I need to highlight that JK Lakshmi Cement is also the holding company of Udaipur Cement Works Limited and therefore this call is also open for discuss and about the performance of Udaipur Cement Works Limited. On the call, we have with us to Mr. Arun Kumar Shukla Singhania, President and Director and Mr. Sudhir Bidkar, CFO of JK Lakshmi Cement.
I would like to mention on behalf of JK Lakshmi Cement and its management that certain statements that have been made or discussed on this conference call maybe forward-looking statements related to future developments and current performance. These statements are subject to number of risks, uncertainties and other important factors, which may cause the actual development and results to differ materially from statements made. JK Lakshmi Cement Limited and the management of the company uphold no obligation to update or publically alter the forward-looking statemnts, whether as a result of new information or future event or otherwise.
I'll now hand over the floor to the panel of JK Lakshmi Cement for their opening remarks which will be followed by interactive Q&A. Thank you, and over to you sir.
Thank you, Mr. Vaibhav, and good afternoon, ladies and gentlemen, and sorry for this delay, which was due to some technical problem in connectivity. And welcome to this Q3 call for JK Lakshimi. You have -- must have seen the results, which were approved by the Board and published and intimated to stock exchange on Friday. So without any waste of time since we already run out of time, it is -- I'm throwing the floor open for question/answers.
[Operator Instructions] The first question is from the line of Abhimanyu Kasliwal from Choice India Limited.
So to the management, I would like to ask that now South African [ rand ], it is trading at slightly better prices, around INR 2.50, INR 3.00 as opposed to INR 3.50, INR 4.00. Are we seeing impact on the cost side of the equation. Are we going -- can we expect margin improvement going forward because of this factor?
The second question is, sir, that our current capacity and capacity utilization. Just wanted a question that what is the current capacity that the company is operating at? And what is this [indiscernible] quarter spanage.
And related to that is that, are we expecting to see some kind of operating leverages going forward, especially with new capacity?
And one more question, we were setting up high-margin VAP product, currency, ASC wall putting. How is that going, sir? I know there were 3, 4 questions to whether -- so I really appreciate if you can answer those.
Okay. So I take first question. Good afternoon to all of you. I'm Arun Shukla from JK Lakshimi Cement. Just correct me, I think the first question was regarding that margin improvement outlook, right?
Yes. Yes, sir.
Yes. So as you know, I think we are though a demand month, demand is good in the market. The large quarter and the quarter before, I think we have not seen good price increases despite demand being good. But this quarter, we do see some kind of improvement, not a big improvement in prices or margin. But definitely, I think we see some kind of prices going upward and hence, margin also will improve. And margin will improve a little bit better than the price improvement because of the internal drive, which we are taking on the topline and also at the manufacturing end. So I think our outlook is that this quarter is going to be a little better than last quarter in terms of margins. So perhaps, I think, this is the first part of your question.
Second was our capacity utilization. So last quarter, I think our capacity utilization was 77%. And this quarter, we believe that our utilization would be at about 80% to 85%. So that is what we see. So definitely, I think that is also will have a bearing on our margin because of the direction of the fixed cost and other.
Okay, sir. So the current capacity is around 14 million tons. What are we looking at?
Yes. So I think we do have one outsourced unit with us [indiscernible]. If you take that into consideration, then we are at about 15 million tons.
Okay. Wonderful. Sir, what about the additional capacity of high-margin products, which you were planning to work on VAP, RMC, AAC, [indiscernible] Would you like to provide any guidance on that or any outlook on that?
Yes, yes. Very good question. So I think we do have a very good focus on our value-added product, which gives us good access for -- to customer directly. And also, I think entering into some areas, which is a growing area in case of VAP. Just to give you a sense that we are focusing quite a bit on RMC business, expanding it further and also PAT and the [indiscernible] business.
Just to let you know that RMC is business, I think we are progressing very well. We do have some model by which we are expanding our capacity. And last quarter, our sales have improved, and total volume was about INR 1.35 lakh cubic meter, right? And AAC block also, we are doing quite well. AAC, our volume last quarter was, just hold on, [1.36 lakh cubic meter]
[Foreign Language] what is the revenue that we are seeing?
So revenue last quarter, we have achieved a revenue of about INR 116 crore.
Includes [indiscernible] RMC and AAC?
Yes. So this includes POP. This includes RMC. This includes AAC block and a little bit of mortar as well.
Okay. And what is margin to the [indiscernible] you operate on 15%, 20%?
So I'll just to let you know. I think in our case, the high-margin business is AAC block with about 12% margin. And overall, if you take a view of RMC, AAC and POP together then 7% margin.
7% operating margin? 7% net margin, sir?
We are talking of operating margin. And just to let you know, I think AAC block, A is I think I had told you margin is about 12%. We have planned to grow it further. So Aligarh front recently, we have acquired one plant, and we have started production of AAC block, wall putty in Aligarh unit in UP. And we do have some future plans also for AAC Block. And going forward, our focus is going to be AAC and RMC. I think last time around, we had announced that we are going to go up a 50 plants. So that have already is achievement that on breaking ceremony has happened. And probably, I think next 6 to 9 months' time about, we'll have a putty plant at [indiscernible] in Rajasthan. So that is also going to give a good boost to our AAC portfolio going forward.
[Operator Instructions] The next question is from the line of Shravan Shah from Dolat Capital.
Sir, before asking the question, I just wanted to clarify or know. Sir, when did we met the investors in Mumbai, I suppose we met in end of November or the first week of December. Is it right?
Yes, yes, you're right.
Sir, then how come we haven't informed to the exchanges?
Sorry?
We do not inform the exchanges. Normally, that's the process that when corporate meets the investors, they inform to the exchanges that we are meeting our investors on this day, but we haven't informed to the exchanges.
We have a presentation, we had done, we have uploaded on the website of the company. So that meeting investor is an ongoing process that happened that we [indiscernible] together instead [indiscernible] whatever we discussed that is all presented in a presentation, which has been already uploaded and before the meeting -- Investor.
No, that is true. That so that normally is the case with all corporates but if that is the process set by the either SEBI or the exchanges that we should be following. The thing is that -- just wanted to clarify on that aspect. Have we talk about INR 1,000 EBITDA without increase in the realization?
Yes. So, Shravan, I think, yes. We believe that we do have scope or the headroom in improving our topline. But as you know, we are [indiscernible] manufacturing costs. Our effort is definitely to work all those internal efficiency pertaining to the topline but to build that gap up. And if you really look at without taking price into consideration, so the EBITDA gap between JK Lakshmi Cement and the leaders is diminishing [indiscernible]. And that is coming about the fact that we are working internally [indiscernible] have decided that this is going to add value, right?
So yes, I think -- whatever I think EBITDA [indiscernible] in that [indiscernible].
The simple thing -- the simple question right now I have is that is a kind of a selected information to be said with the investors. So that's the -- that's why I'm raising this point because I don't think this is what we have discussed on the conference call last time. So the thing is that the cost for meeting with the investors, the stock has seen a significant earnout and then pull off. So that's the simple point. I am just trying to request you, if anything has to be said, it should be at a common platform and not do the selective investors, so that's the humble request.
My question is now in terms of the needed some couple of data in terms of the trade share, share of premium, blending share, late distance, rail road mix, fuel mix for this quarter?
Yes. So as we speak today, I think we are at about 54% of trade and about 66% of blended cement, right? And our lead distance is 396-kilometer. And last quarter, our lead distance was the 401 kilometer.
401 kilometer for the third quarter. And the blended cement, you said, 67%?
66%.
Okay, okay. So just a related -- and the premium side, you said?
Premium is about, just hold on, is about -- if you take overall volume then is about 11%. And if you take only trade volume, then it is close to about 25%.
Okay, 25%. So related question is that last phone call, we said that we are targeting to increase the trade share to more than 60% in 2 to 3 quarters. So this time, as you mentioned, our trade share is at 54%. Last quarter, also the same number were there. So just trying to understand where are we? Still we are expecting that we will be able to increase this to more than 60%. So now 2 quarter remains if last quarter, if I include in your target of 2 to 3 quarters, so only 2 quarters left. So are we able to do more than 60% trades share in 2 quarters? And the same way the blended share where we said that we want to achieve a 72%, 75% in 2 to 3 quarters. We are at 66%. Last quarter, was 67%. So just wanted to understand how we are planning to -- or are we now increasing our target time maybe by 2, 3 more quarters?
Yes. So I think, good question. Shravan, I think, the last call, I did mention that if you look at our efficiency levers, so first efficiency lever was [ fuel mix ]. Because trade and nontrade is all about margin optimization, right? But we operate in a diverse geography wherein trade, nontrade and even trade different June varied is quite significantly.
Just to elaborate further on this. If you take, let's say, North. North [indiscernible] trade and nontrade is very high. And gap is very high as big as INR 800 to INR 1,000 [indiscernible]. If you go to, let's say, East and West that gap is not that much there. So one way to improve the margin is to optimize the geo mix at the top level. So that means that [indiscernible] where on-trade is better than the trade of other geographies, I think that is what is going to be my preference.
And I think I mentioned last time I remember very clearly, at first level of geo mix, the level of optimization is geo mix, to sell more in the area where we have better margin, one. And the second level thereafter goes is trade and nontrade, right? Just to clarify that one. And I think, yes, I think still, I think [ 50% ], that is what we are going to achieve this next 2 quarters. That is what the endeavor and effort is but first and foremost thing is, of course, geo mix of the value, right?
Blended also, I think we do have a target of taking it to [indiscernible]. We are there at 66%, 67%. And I think we are working -- the way we are progressing, I think I'm quite okay because the first level is geo mix optimization and second comes trade, nontrade and blended, right? But I think that is what our target is, achieving close to 75% of blended and 60% be on trade.
Okay. Got it. Got it. Last, in terms of the fuel mix and the power and fuel consumption cost for this quarter, sir?
Okay. I'll just fuel mix in this was full 37% and [ PAT ] to [ 48% ] [indiscernible] total cost in this in terms of [ 2.57]. I think [ 2.57 ] [indiscernible].
What was in the Q2, sir?
Yes, [indiscernible]?
2.57 kkl cost you said in the Q3. What was the same number in Q2?
Overall group is [ 2.57 ]. Overall group is [ 2.57 ].
Yes. So this is for third quarter. What was the same number in Q2 FY '23?
Yes, [ 2.30 ].
[ 2.30 ]. How do we expect the same in this quarter?
It will be flattish. Same.
Okay. And in terms of the data, date gross pat and cash and -- are there deadline for the Udaipur expansion remains the same, March 24? How much CapEx we have done? And what's the number we are looking for this fourth quarter and the next FY '24?
Deadline remains the same, which is March 24, but it is still over the first quarter of FY '25. That is number one.
And number two, regarding our long-term debt, on a stand-alone basis, we have at about [ 60 to 40, 53, 650 ] and net debt is about INR [200 crore]. On a consol basis, the total debt is INR 1,875 crores and net debt is INR 1,225 crores.
Sorry, net debt is?
INR 1,225 crores on a consolidated basis.
INR 1,225 crores. And in terms of the CapEx, what is left in the fourth quarter and FY '24?
As far as JK Lakshmi is concerned, we are not doing [indiscernible] projects. We are not doing any major [indiscernible].
At consol level, sir, I'm asking.
On a consolidated basis, we have about -- we have already incurred about INR 700 crores out of INR 1,650 up to December in that [indiscernible] and another INR 150 crores to INR 200 crores will go in the current.
I would just like to clarify, when we had met the investor, we did not discuss anything new other than what was already talked in the conference call, which was held immediately after the results. So nothing new which we expect. Whatever presentation was there, that was in a public domain other than that nothing was discussed.
Thanks for the clarification but the thing was initially [indiscernible] mentioned that in terms of the INR 1,000 EBITDA per ton without realization growth. So that is an important aspect. So that's what I was just trying to and request that we should be disclosing in -- at a open forum, like an earnings call and not to the selective investors. So that's the only simple point I wanted to highlight.
But that was also highlighted in the last con call, how we are graduating and bridging the gap and trying to reach INR 1,000. Same was discussed with investors when we met in
[indiscernible]
Next question is from Rajesh Kumar Ravi from HDFC Securities.
Hello, am I audible ? sir.
Yes, sir, audible, sir.
Yes, so first of all, on the housekeeping. You said that the non cement revenues for this quarter is INR 116 crore. Did I get it right?
Yes, you're right. You're right. You got it.
And how much is the RMC revenues for the quarter?
RMC is about INR 56 crore -- INR 40 crores is AAC block,
POP is INR 20 crores.
INR 56 crores is the RMC. Sorry, I couldn't hear after that.
The AAC is INR 40 crores and INR 20 crores is POP.
Okay. And the noncement revenues, they are making around 7% EBITDA margin.
Yes.
Okay. Sir, on the CapEx front, you mentioned on a consol basis, you have incurred around INR 700 crore in the 9 months?
No, no. I said on that project of the INR 1,650 crores, we have incurred up to December, INR 700 crores.
INR 700 crores. So because why I'm asking is the September quarter, half yearly balance sheet suggests that CapEx spend in -- till first half was around INR 330 crore. So we have incurred another INR 400 crore in the third quarter. Is that understanding right?
What was the third quarter, sorry?
No, no. September 1H. 1H till September, the CapEx spend on a consol basis appears to be around INR 330 crores.
It would happen only for the current [indiscernible] number [indiscernible]. INR 700 crores is the figure we have talked up on that project of INR 1,650 crores [indiscernible] which would have been incurred before March '22.
No, no. I mean, the cash flow statement, sir, I'm referring to the half yearly cash flow statement.
That is what you -- you can't link the cumulative figure up to December with a cash flow of 6 months and adding there to the remaining CapEx. Mainly additional CapEx in this quarter was only about INR 250 crores.
Okay. So INR 250 crore is the incremental. And for this fourth quarter, how much incremental CapEx expenditure you're looking at, sir?
Another INR 200 crores will be incurred on that.
INR 200 crore. And so, that would work out to be around INR 700 crore for the full year. And next year, how much you're guiding, sir, cash flow basis?
It would be about INR 700 crores on a consolidated basis, putting the remaining part of the budget. And [indiscernible] JK Lakshmi [indiscernible].
Okay. Right. Right. And sir, I heard your CMC comments also today that you're looking at 12% volume growth for this year, which primarily means your cement volume growth. But if I look at cement plus clinker, you would be doing around 6% to 7% growth on a consol basis.
Yes. I think we have decided that I think clinker [indiscernible] into cement selling business, right? Clinker is [indiscernible] I think we sell a little bit is on again the opportunity which we have where we have a good margin and that makes sense [indiscernible] we are primarily focused on cement and we'll continue so in the future.
Okay. No, I'm asking for next year until your this new project get commissioned, what sort of volume growth on a consol basis one should factor in? And would you -- for your meta -- the only grinding unit, would you need to take clinker from market also or to drive growth?
I think, overall, next year, I think we are looking at anywhere between 12% to 15% growth, right? That is what we are looking at.
Like only on [indiscernible] you're saying, right? No, I'm looking at on the total base, cement plus clinker.
Cement. I think unless [indiscernible] now one considering growth in cement.
Okay. So incrementally, your clinker sale will meaningfully reduce because you will be converting it into your own cement, right?
Right. Right. [indiscernible], we do have clinker with us, as of now because that we can supplement it from our [indiscernible] brands.
So for next year also, you don't require additional clinker from also -- external purchases required or not for this growth of 12% that we are targeting on cement?
12% is all internal without [indiscernible].
Okay. And sir, just sequential increase in your costs. Is it because your cost base was lower in Q2 and that is why Q3, you have seen a 2.3 to 2.5 to what jump in the cost. And so, now from 2.5 to -- how are the cost numbers looking in Q4?
Q4 a little flattish, around the same level. Q4, you're right, lower at 2.3. So it will be flattish. So it has peaked out.
Okay. It is peaked out. But incrementally, in Q1 and all, are you looking these numbers to come down meaningfully closer to INR 2 on current cost trend basis?
INR 2 will not come. INR 2 means a reduction of 20%, that is not [indiscernible] what has happened. Marginally, it will come down in the first [indiscernible]. But [indiscernible] not to that level as [indiscernible].
Okay. Because then the concern, we also see freight cost for all the players, we have shown an increase when we [indiscernible] season starts getting introduced and many players talking. This will now remain a full year phenomena rather than a quarterly 1 or 2 quarters. So for you also the margin levers here on Q4 and all could be restricted because we are not expecting fuel cost savings and realization improvement is also not great so far for all players?
Yes, you're right. [indiscernible] our internal efficiencies will drive the [indiscernible] and not [indiscernible].
And one last -- sorry. Last question on this on this 40 megawatt of the solar power supply. This is on the convention basis? Or this is 40 megawatt capacity which you have tied up, I mean PLS being 20%?
40-megawatt of capacity, which we have tied up [indiscernible] out bottom in which we are investing about 26% equity.
Effective, sir?
Yes. Clear advantage is that in [indiscernible] allowed the banking of the power. You can [indiscernible] power would be produced in a limited period of time and then we can use it.
By when this project would be ready, sir? And how much equity you are introducing for 26%?
For 26%, we're investing about [ INR 22 crore ], and it should be ready by the fourth quarter and [indiscernible].
Sorry, fourth quarter this year itself by end of March?
Yes, yes.
Okay. And what cost you will be sourcing out for from this unit?
We'll be getting effectively landed at about INR
INR 5.50.
Sorry, sir. I misused it. How much?
Sorry.
Hello? Your voice is [indiscernible].
INR 5.50 per unit handed to us. INR 5.50, is that clear? is it Audible?
Yes, yes. I got it, sir.
This is -- I mean, FY '24 quarter -- fourth quarter, '24, I would like to clarify. It will be in March '24, not '23
But '24.
[Operator Instructions] Next question is from Prateek from Jefferies.
The question is on your renewal part mix. So we have talked about in a press release that for Eastern power mix. We're looking at 80% renewable power mix.
Can I request you to please use the handset. You are not audible clearly, sir.
Yes. Is it clear now?
Yes.
So my question is in the press release, you have talked about 80% power mix in Eastern operations as a renewal power. We also have this captive power, right, on the Eastern operation. So what happens to that once we have like the 80% renewal power mix?
Obviously, we'll not be using that because of the [indiscernible] at full cost, and 80% will be drawn from renewable, it may not be required.
Yes. So we'll be selling off that plant? Or that will be like...
We'll take a call at appropriate time. Too early to let the project [indiscernible]. We also have plans to expand there. We will see. It's not that immediately sell off the [indiscernible].
Okay. And just a clarification on the consolidated CapEx of this year and next year, we are looking at around INR 1,000 crores this year and INR 700 crores next year on consolidated basis?
Current year, we have talked of about INR 750 crores. Another INR 750 crores, next.
The INR 750 crores and INR 750 crores, this is including UCW and [indiscernible] operations combined?
Yes, yes.
And FY '25 also has this impact of CapEx of UCW?
Marginal, may be marginal. INR 100 crore to INR 200 crore, depending on what is when exactly we clost that project.
Right. And on pricing, sir, you mentioned that there's no range in pricing of late. So are we, or as an industry, it's looking at like hikes post March, like financial year-end? Or that is also, like looking out the question now?
So I don't know about the industry, but I think demand and supply is going to really decide this. And probably I think prices may go a little bit further up, much is what I see. And we'll try to take price increase, and I'm talking of JK Lakshmi [indiscernible] talking about industry [indiscernible].
Sir, we are losing your audio sir. Sorry, we couldn't hear that.
Is it audible?
Yes, sir.
Prices will inch up a little bit this quarter and in coming quarters, right? And we'll try to attempt price increase, and I'm talking about only JK Lakshmi. I am not talk about industry, what they are going to do. But based on the demand supply situation and our position, we will try to kick in.
Okay. So when we talk about like the INR 1,000 EBITDA per ton for consolidated operations from like, let's say, current net of INR 650. Would it be possible to sort of break it down to like internal efficiencies, including like power and fuel or logistics or geo market positioning or like [indiscernible] that we are looking at?
Yes. Yes. I think INR 1,000 is not going to be achieved just by saying so. We do have all those granular [indiscernible] element of manufacturing for supply chain, for top line. We do have granular details as to where we need to work and how much time is going to take to implement all those additional brands. We do have those details.
Yes. I mean is it possible to discuss them?
Sorry?
Is it possible to discuss on the call?
Yes. So I'll just tell you, if you want to let's keep a gap of INR 300, right? So I think about INR 200-plus is going to come out of this topline levers improvement. About maybe INR 50 or so will come from manufacturing, and INR 50 to INR 75 [indiscernible]. Kind of broader way. I think this is what is the because [indiscernible] but I think you have elemental analysis also in that each broader heads.
[Operator Instructions] Next question is from Ritesh Shah from Investec.
A couple of questions. First is you indicated a sale of INR 115 crore, INR 117 crore for the quarter pertaining to AAC blocks, RMC and thing else. Did I hear the number right, sir?
Yes, yes. Correct.
Right. Sir, can you give the same number for Q2 and Q3 of last year, please, and the corresponding margins?
Yes. So we can give you Q2 as well. So it was incidentally it was same, incidentally, almost [indiscernible]. Overall, [indiscernible] under RMC was INR 52 crore, right? In this quarter, the quarter which has ended [indiscernible]. Margin last quarter was [indiscernible] as against the current quarter.
Sir, I could not hear you, sir, sorry.
INR 116 Is the current non value-added product sales, which was same as in the preceding quarter. Margins have improved from 5% in the second quarter to 7% [indiscernible] a value-added product.
And sir, last year's numbers?
Last year, INR 99 crores in the [indiscernible] quarter and margin of [indiscernible].
Okay. Sir, if we have to look at the cement business, would it be fair to strip down these numbers and then look at it?
That will be the correct way of looking.
Sure. Sir, my second question is the reported numbers, what we give for cement sales and volumes. I think last year, in Q2 or Q3, you had indicated that there was an element of double counting, which we had then basically rectified. So I just wanted to check the reported number that we have for cement and clinker volumes. If you could just help us understand whether it is only for JK Lakshmi or it also includes UCW? And if you could please bifurcate it for cement and clinker for JK Lakshimi and UCW separately. For this year and last year Q3?
Q3, this year, on JK Lakshmi stand-alone basis, we had cement sale of [ 24.22 lack ]and clinker sale of [ 1.82 lakh ]that makes [indiscernible] of [ 26.04 lakh ]. And UCW, they did not sell any clinker [indiscernible]
Sir, your line is breaking. Sorry, I cannot hear you. Sir, hello?
Yes.
Yes, sir. Your voice was breaking. Sorry, I could not get you. You said UCW after that is lost you, sir.
UCW was 4.48 lakh and they did not sell any clinker. So that was their total sales. And on a consolidated basis, eliminating the interunit sales, total cement still is 26.96 lakh. Clinker sales only for JK Lakshimi, 1.82 lakh. So total is on a consol basis, 28.78 lakh.
And sir, same number for last year?
Last year, same number. So JK Lakshimi was 20.96 lakh, cement [ 2.33 lakh ] clinker. Totaled 23.29 lakh. And UCW at 4.47 lakh, cement, 0.37 lakh, clinker, total was [ 4.84 lakh ]. And consolidated basis, excluding the interunit, cement was [ 23.22 ] and clinker [ 2.7 lakh ] total is [ 26. ] On cement, there's -- on a consol basis, there is a [ 15% ] increase and overall 10%.
Sorry, if it's possible, if you could please add this on the press release from the next quarter onwards. It will help us understand and appreciate the numbers better. So that was one request.
And sir, last question, how should one look at the limestone lease expiries. And I understand we have multiple optionalities also on the table. How should we look at that?
For Limestone, I think, except Sirohi, which is due in the year 2030. I think rest everywhere, I think we are secured in terms of limestone binding leases, right? And that is good enough for [indiscernible]. In case of Sirohi, I think that is going to be renewed in the year 2030, and we are hopeful that we'll be able to do that because the entire industry is going to face this issue during that time. Probably, I think that is not going to be a big issue. Rest, all other places, I think we are secured in terms of which we have and in terms of peers we have in our hand.
Right. And sir, is there any risk mitigation strategy, if at all, the Sirohi lease doesn't come to as in 2030 or if other premiums are very high. What is the plan B that's what I want to understand, sir.
Udaipur is nearby, then we do have a limestone there with us right? So that could be one fallback option for us. And probably, I think by that time, Nagore also will be ready in case of extreme eventuality that can also happen. I think -- that is something which is yes as an option but I think we are confident of Sirohi renewed in the year 2030.
Sure. And on the growth optionality, sir, we have a couple of limestone leases where we have recently won in options. Can you please detail how and when will we exercise those optionalities where we already have?
Yes. So currently, we are working on Nagore. That is what the first priority for us is, right, which is situated in North part of Rajasthan, although preliminary activities in terms of mining approval, [indiscernible] plan and things like that is already on the way. That is going to be the topmost priority for us. But before that, [indiscernible] can come because we do not have railway siding. We are trying to have railway siding very quickly maybe in the next [ 1.5 years times ]. If that happens then probably, I think it will come before [ Nagore ].
We have three locations positions with us. Durg in East Nagore in Rajasthan and Kutch in Gujarat. We are at about 15-million ton as of today. 1.5-million ton, we'll be having by March Q4 in terms of cement. Clinker, we are going to have even before at max [8,18]. And these three locations will be putting up another 12 million tons put together. Our plan is to go to 30 million ton by 2030.
So the order and priorities will depend on how we are progressing at Nagore and Durg in terms of railways. Railway siding comes first then Durg is going to be the priority. Nagore progresses very well, and that is going to be ahead of those. So this is what the plan is followed by
Kutch.
This was very helpful. And sir, when are we likely to decide on this incremental capital allocation decisions?
On that capital allocation, this is then would come from there in the next line here and [indiscernible], what tapping into our external exports [indiscernible].
Sure. This is helpful. And sir, if I may squeeze one question. Sir, are we looking to collapse JK Lakshmi and UCW structure, any time lines? I think there was a tax angle, and have you exhausted part?
Not that angle still continues and We have been mentioning that it would take 2 years, but [indiscernible] entitlement of about INR 150 crores [indiscernible].
Sir, your voice is breaking again. Sorry to interrupt.
[indiscernible] doesn't make it -- not a tax-efficient merger, if we do it now. But ultimately, it will happen. And we exhaust that [indiscernible] and that plan is very much dead. But without merger on paper [indiscernible] synergical benefits in any case we are driving today also in some [indiscernible] marketing -- common top management. So apart from a collapsing of the structure and having a common cash flow [indiscernible] size valuation obviously will get accident.
But otherwise, will be synergical [indiscernible].
Sorry, sir, we just lost you in the last minute.
Yes. So I'm saying most of the synergical benefits, in any case are being driven now also without paper merger.
Next question is from Kamlesh Bagmar from [ Lotus Asset Managers ].
So one question on the part of like the last con call, we had told that by the month of, like, say, January, we will be more clear about how much price gap we have narrowed down with the peers. So any update on that part?
Yes. So I think we did the [indiscernible] is our price gap with the [indiscernible]. For instance, I think Western and Eastern part of India, we have reduced this quite significantly. I would say, I think where we wanted to actually position ourself. So that I think progress is there. I would not say that we have accomplished it. But I think there, we have done quite a bit.
In the North, I think, yes, we need to [indiscernible] on that further. But the progress in case of North has not been that great. In the West and East, yes, we have [indiscernible].
Yes. But -- is it more of an issue with regard to the leakage of volumes from non-trade to trade? I think that even if we see today the prices, the gap is massive like INR 30, INR 35 gap with the top player and it's not like say, your gap with the [freeze] or the second run or third run companies [indiscernible] company, it's majorly with the top player and those gaps would remain. So why we are harping so much on the price gap side? And there could be some issues on the cost side because like say, the realization in the case of [say] or any other players are at the similar levels, but they are much more competitive on the cost side. I do appreciate that we have worked a lot on the cost side be it [indiscernible] recovery on the solar or renewable energy. Where is the issue on the margin front, not on the price front, but on the margin front?
I think a lot of -- price is one part and major part, I agree with. And in terms of trade, non-trade, I think we have quite a robust way of checking all those in. So I'm talking of the recent [indiscernible], I think we have really improved a little bit on that intermingling of trade and nontrade. I think I'm reasonably confident that, that is not happening in our, right?
I'm not [indiscernible], they are doing, right? So given [indiscernible] or given June also, there are pockets where you have your brand is more [indiscernible] that also determines the size gap. But we do have a road map as to where we want to reach in terms of the benchmark brand, which we have fixed for us, right? So disciplined part, I think we have already worked. So I think I do not see much of an issue.
More so with the technology in place, I think nothing of that sort can happen. I would not say 100% sure about it. But I'm reasonably confident maybe to the extent of 90% that, that is not happening in case of our case, trade non trade or back unloading and things like that. And more to do with the kind of elevating our brand proposition and the brand value itself, right? It is a long-term way. And when I was discussing with all of you, maybe I have to know last call also, brand positioning, that takes a little bit longer time. So this is not something which is going to give you a benefit right away.
So I think, yes, that is there also we are doing quite a bit in terms of improving our brand salience. But I think our -- much more focus is on those initiatives, which is some kind of low-hanging fruit, right, if you can pluck it right away. So we have prioritized our initiatives and parallel is also, of course, so brand building, brand salience improvement and things like that, right?
Sir, honestly like sir if you take your Gujarat market, it's a purely non-trade market, I really don't understand that how the brand is going to give you such a big push. It may be in the East market, but not in your core market, like the Gujarat, because over the last 2, 3 quarters, see our performance, it has been entirely because of the low-cost cone , which you had the benefit. But as you move as like even in this quarter, the gap with your all the peers which was in the last quarter by around INR 100, INR 125. Now that again like say, widen to roughly around INR 250.
Honestly, that has not really played out. And even if you do the channel check, no improvement has yet been witnessed on the pricing part.
So price sizing positioning part, yes, of course, it's going to take time. And you mentioned about Gujarat or West market, I think industry structure is [indiscernible]. That -- you have major projects out there, right? Non trade even in case of leaders also non-trade percent is high, okay? But if you see trade and nontrade gap in case of Gujarat is the list. And that is what I think I was trying to explain one gentlemen who asked the question of trade, nontrade and like explain that geo mix.
Okay. So I think trade and nontrade gap is not that much, right? And if you go to other markets, non trading gap is very high. So I think we do have priority. I think price positioning is not going to really being done immediately. That is going to take some time. But what we can do is all those levers and metrics, which we can work. And probably, I think our direction is all right.
I think you mentioned about 2, 3 quarters. I think if you look at our gap with the leaders have been the highest. If you look at 9 months EBITDA per ton of the leaders and our. I think drop in case of -- or the gap which we had with them was much higher before. This year, I think we have reduced this quite significantly. I think perhaps I think -- we need to really look at that, I think, as you miss that, you just look at that how much EBITDA they have kind of -- their EBITDA has declined or reduced and our have declined. That will give you a fair bit of idea that, yes, something has happened, that is what is seen as the result.
And lastly, one suggestion which has been the common suggestion that do give volumes about volumes in your press release. Your press release is just statement of the revenue EBITDA and PBT and PAT. There is no statement about the volume. Sir, every company, even, like say, half of your size, it gives the volume in their press release. I really don't understand, like, sir, for the last 10, 12 quarters, which would have been the common position, which has been made on this forum. I believe that is not getting implemented. Every time you have put up the messages or the SMS to get the volumes.
We will see if it is feasible, we will do.
Next question is from Uttam Srimal from Axis Securities.
Sir, my question relates to [indiscernible]. So how that is shutting up and what kind of volume you are expecting in [ FY 2024 ]
So we are averaging close to about between 25,000 tons and 30,000 tons because we commissioned this project during July and August in the monsoon time. Our volume has started picking up. Probably this month onward or maybe this quarter, I think we'll see an average volume of about more than 50,000 tons. In the previous quarter, we have about close to 30,000 tons. So that improvement, we see this.
Sir, 50,000 tons per month?
Yes, per month.
Okay. Okay. Okay. And sir, the other expenses in this quarter has been very high. So what has been the reason for that? And will this run rate will coming in the fourth quarter also?
Yes, the second quarter, we had some lower expenditure on advertisement. So this will be the normal level.
[indiscernible] this will remain in fourth quarter also?
Yes, yes.
Okay. And sir, how has been about rail road mix during this quarter?
Rail is very insignificant. In our case, they are about 10% [indiscernible].
Next question is from Ronald Siyoni from Sharekhan Limited.
Yes, sir. So wanted to repeat the quarter 3 FY '22 numbers. So last year's same quarter, if you can please repeat volume number.
Sorry?
Quarter 3 of FY '22 volume numbers, if you can repeat?
Last quarter -- last year?
Yes, last year.
Last year, we had JK Lakshmi, total volume of 20.96 lakh in cement and clinker [ 2.33 lakh ] total was [23.29 lakh]. UCW was 4.47 lakh cement and [ 0.37 lakh ] clinker. Total was [ 4.84 lakh ]. And on a consol basis [indiscernible] cement was [indiscernible] clinker [indiscernible]
Sir, we lost the audio again. Sorry to interrupt.
Consolidated, 23.44 lakh. Clinker -- that was cement. Clinker 2.7 lakh. Total is [ 26.14 lakh ].
Okay. And you said JKL stand-alone was 20.96 lakh and 0.33 lakh, clinker.
[ 2.33 lack ] clinker [indiscernible] [ 23.2 ].
Okay. And second thing was that the capacity expansion, which you spoke about. So you had said 15 million ton and thereafter, you will be adding around 0.5 or 1.5 until March. So that part, I couldn't get. 30 million ton was by 2030. But in between, what is the expansion plan of the company?
So 2.5 by March. [ 2024 ] that UCW [indiscernible].
March [ '20 ], okay. Okay that part is only included. Okay. And so, the same request on the actually sir if you can put numbers in press release, I haven't recieved actually the e-mail from the company with respect to sales volume.
[Operator Instructions] Next question is from Keshav Lahoti from HDFC Securities.
Sir, you mentioned in the call that premium [indiscernible] 11% overall and 25% of trade. And then are these correct?
Right. Yes, yes.
Because math is not working. You said that trading around 54%. And [ premium ] is total 11% then out of trade, it should be 20% only, which is a consistent trend of 20%, 21%.
I think I just mentioned approximately, and that does not include our trading volume, right? Trading volume does not include trading volume on the outsourced volume wherefrom we are seeing [indiscernible] product, right? We put everything together and I mentioned [indiscernible].
Okay. Got it. Got it. And sir, how was your non cement revenue margin will look like next year?
I think it's going to be about 7%, 8%, kind of.
Okay. Got it. And just 300% internal level, which you're talking about. So by when should we achieve those to be fully achieved?
Again, I think -- can you repeat your question, please?
So the 300% internal over which you're talking about improvement in EBITDA, by when this will be achieved?
18 to 24 months, I think you can take that. 18 to 24 months.
Okay. Got it. One last question from my side. So your sale cost is not expected to fall off in Q4. Is it like you have a very high cost inventory already? What sort of inventory you're carrying?
Yes, you're right. We have this cost in cost inventory. So we'll be having the same field cost in the coming quarters. We will start tapering down from April onwards.
Next question is from Shravan Shah from Dolat Capital.
Sir, just wanted to clarify as your voice was breaking in between a couple of times. INR 300 internal levers, you said. INR 200 -- if you can break it up INR 250, if you repeat what you mentioned?
Yes, INR 250, INR 50 approximately give and take. [indiscernible]
Sorry, sir, INR 200 from topline?
Yes.
Okay. INR 50 from manufacturing and INR 50 from?
Supply chain, logistics -- outbound logistics.
Next question is from Rajesh Kumar Ravi from HDFC Securities.
My question is to be with the [indiscernible] production consolidated for Q3 and 9 months, and second is 30 million ton by '30 which incremental 12 million ton capacity. What is the CapEx number you are factoring in for those 12 million ton?
Consolidated inter production in this quarter was [ 21.86 ]. It includes [ 18.51 ] of [indiscernible] and [3.35] of [indiscernible]
Thank you. Ladies and gentlemen, due to time constraints, that would be our last question for today. I now hand the conference back to Vaibhav Agarwal from PhillipCapital India Private Limited for closing comments. Over to you, sir.
Yes, thank you. On behalf of PhillipCapital India Private Limited, [indiscernible] Lakshmi Cement for the call and then an thank you about the [indiscernible] call. Thank you very much, sir. [indiscernible]. Thank you.
Thank you, thank you, thank you, everyone. Thank you.
Thank you. Ladies and gentlemen, on behalf of PhillipCapital India Private Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.