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JK Lakshmi Cement Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 FY '22 and FY '22 Conference Call of JK Lakshmi Cement Limited 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, Inba. On behalf of PhillipCapital (India) Private Limited, we welcome you to the Q4 FY '22 and FY '22 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, the call is also open for discussion about the performance of Udaipur Cement Works. On the call, we have with us Mr. Sudhir Bidkar, CFO of JK Lakshmi Cement; and Dr. Shailendra Chouksey, Whole-Time Director. He's expected to join the call very shortly.
I would like to mention on behalf of JK Lakshmi Cement and its management that certain statements that may be made or discussed on the conference call may be forward-looking statements related to the future developments and current performance. These statements are subject to a number of risks, uncertainties and other important factors, which may cause the actual developments and results to differ materially from the statements made. JK Lakshmi Cement Limited and the management of the company assumes no obligation to 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 management of JK Lakshmi Cement for the 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, for this Q4 con call for JK Lakshmi. Results you would have all seen. So without any waste of time, let's -- keeping -- leaving the floor open for question and answers.
Inba, I think so Mr. -- can you just try and connect Mr. Chouksey once before we start the Q&A. He's trying to beep the call in.
Yes, sir. Dr. Chouksey is now connected to the call.
Okay. Thank you.
[Operator Instructions] We'll take the first question from the line of Shravan Shah from Dolat Capital Markets.
First of all, congratulations on the robust performance on Q-o-Q level. Sir, first question, so, obviously, the normal question is on the costing front. So we have seen improvement on the power and fuel cost and other expenses. So if you can help me. Because last time when we had a call, we said that in terms of the power and fuel cost for us for Q3 was INR 9,500 per tonne. And we were expecting INR 10,000 for this quarter and INR 80, INR 85 kind of an increase. But actually, it has declined on Q-o-Q front. So if you can help us, what was the cause and why it has declined? And how do you see the first, second quarter in terms of the power and fuel cost?
Yes. Thank you, Shravan. As far as the power and fuel cost is concerned, the first thing is that the full benefit of the Waste Heat Recovery project of 10 megawatt, which was set up and installed in Sirohi. That has come in. That is number one. So that has helped us to reduce the cost as far as power and fuel is concerned. Other than that, obviously, the change in the mix has benefited us basically. And we have started using more of the alternate fuel. Basically it's about 14% now we have been able to use as against 10%. Other than that, the full impact of the increased inventory cost will come in the coming quarter, obviously.
So for -- in terms of the cost level, so for this quarter per tonne power and fuel consumption cost was how much? And what is now and how much increase we are expecting now in this quarter at least?
It will be basically because of the higher cost inventory, which will now get utilized in the current quarter. And the full benefit of the Waste Heat Recovery was already there. Some efficiency improvement in PAT will also help us to offset that. But still there will be -- we expect that to be there.
But -- and any number in terms of how much increase we can expect in the first quarter?
Would be anywhere now that last time we were able to clock it at around INR 9,000. That was the cost -- average cost of the fuel, which was debited that time. It will be at least 7%, 8% higher than that.
Okay. And in terms of the other expenses, is there any one-off or anything that you want to highlight or this run rate, because all other PP bags and all the costs should be higher on Q-o-Q, but our cost has -- that expenses has declined sizably. So if you want to highlight anything.
That is -- you are talking of the decrease in cost on Q-o-Q basis or what?
Q-o-Q, sir. So from INR 168 crore, INR 149 crore, other expenses.
Yes.
On consol basis, sir, I'm talking. On consolidated basis I'm talking from INR 168 crores to INR 149 crores.
We should discuss on this separately for each company rather than on a consolidated basis. Your other expenses -- they have basically come down on account of the lower fixed costs and lower advertisement cost.
Okay. Okay. Sir, now a couple of data points, sir, in terms of the trade mix, trade/non-trade lead distance, road rail mix and fuel mix for this quarter.
Fuel mix we had done -- as I mentioned, we have done about -- in this quarter about 30% of coal, 56% of the pet coke and other biomass, et cetera, about 8%. As far as trade is concerned, we have done 55% in this -- 56% in this quarter, over for 55% and trade percentage is 55% and lead distance 3 95%.
3 95%. And rail road mix?
We don't have any this breakout of railways facility in East as of now. So...
And for North.
North, Rajesh will come back on that.
Okay. And in terms of -- so have we finalized in terms of the right issue for funding the expansion? So I heard Chouksey sir interview on the channel. So I hope nothing changes in terms of the costing front, whatever we mentioned last time, INR 1,650 crores. So just wanted because last time we talked about that we will discuss the right issue.
Yes. Rights issue has been in [Technical Difficulty] and the Board meeting held on 17. And the project was -- came on 16.
We'll take our next question from the line of Pinakin Parekh from JPMorgan.
Sir, my first question relates to realizations in prices. Now there has been a lot of talk about price increases. Sir, can you give us a sense of what is the price today versus the March quarter average in your key markets?
We have seen some increase in the month of April by about INR 25 to INR 30 a bag. That varies from market to market. But on average, you can say about INR 25 to INR 30 is there in our market in the North. As far as the East is concerned, we have seen an increase of about INR 15 to INR 20 a bag..
And sir, this INR 25 to INR 30 in the North taken in the month of April, has it been fully absorbed into May? What is the sense of demand? Because year-on-year demand comparisons may not be valid because of last year's Delta wave. But how is demand trending at this point of time, especially government projects because they work on a fixed price basis?
Normally, April gets slightly reduced demand. I'm answering your second question first. In April, the demand goes down because of the harvesting. This year, the impact continued till almost first week of May because the delayed return of the labor from their native places. And that has impacted the demand to an extent. The demand was also impacted in one of our major markets because of the aggregate supply strike, which now has been called off. So I'm expecting now the demand to pick up, which was delayed by about 15 days in the month of May. Now that should pick up since the aggregate supplies have been zero. And also the high temperatures this year relative to the earlier summer, that also affected some of the markets in Haryana and UP. But gradually, we are hoping that this thing will subside and demand will pick up because we still have 2.5 months to go before the monsoon start impacting the North.
Understood, sir. Understood.
Comparatively, the demand has been good in East, and it will continue to be so, I hope so, by -- till end of June when the rains hit there slightly earlier. On about your first question on the pricing, the price increase did not materialize on 1st of April, but on varying days in different markets in the North. But one can say that from around 7th, 8th of April, we have been able to get that price increase. And they have sustained so far. Well obviously, everybody is under great compulsion to offset the increase in the cost of the inputs.
Understood. And sir, my last question essentially is that if you were to take today's coal prices, today's pet coke prices, basically the prevailing spot prices of various commodities, which, given that we are in May and we will be flow through in the September quarter in your P&L, sir, how much percentage increase would the power and fuel cost on a per tonne basis be versus what you reported in the March quarter?
There would be at least 25% increase will be there.
So around INR 250 a tonne?
Sorry?
Around INR 250 a tonne, sir?
It will -- on a current price -- current prices are almost touching INR 400.
Yes, sir. Yes, sir, which is why.
Yes. That much.
Our next question is from the line of Keshav Lahoti from HDFC Securities.
Sir, few basic numbers about sales volume, standalone, consol and clinker?
Sales volume in this quarter were -- on a standalone basis 31.44 lakh tonnes of total, which includes 29.16 lakh of cement and 2.28 lakh of clinker. And on a consolidated basis, it is 30.8 lakh cement; 2.11 lakh clinker; and 32.91 lakh of cement -- total.
Okay. And sir, what about production?
Production what?
Production number of standalone and consol and UCWL?
Consolidated production is only submission only because production doesn't get offset. So JK Lakshmi production quarter was 26.19 cement; and UCWL production, just a second. UCWL production was at 4.21.
What was the RMC revenue in this quarter [ annual point ] revenue? What is the non-cement revenue in this quarter? Out of that, how much is RMC?
Rajesh, [Foreign Language]
This quarter...
This quarter, the total noncement revenues were INR 103 crores, out of which RMC was INR 48 crores.
And lastly, any change in time line or something on UCWL expansion front? Or it remains as it is, how it was in last call?
Yes. We expect to get it commissioned by March of '24.
And what was the renewable power share in the total renewable power share for FY '22 and this quarter?
Renewable power share is close to about 40% for us in this quarter.
[Operator Instructions] Our next question is from the line of Sanjay Nandi from Ratnabali Investments.
Sir, just correct me if I'm wrong. Like you have already taken a price hike of INR 25 per bag, which means like INR 500 per tonne increase has happened. So is it fine enough to offset the cost that has increased from March quarter, sir?
Not exactly. It will not be good enough. Because besides the fuel cost, there has also been an increase in the cost of the freight, which too has moved up by about 10%. So I think there is a need to compensate that as well. Therefore, we are looking at further increases, but much will depend when the demand really steps in, in a meaningful manner, then only an increase would be possible.
So sir, what kind of incremental like hike is -- you need to take to offset that rise in the freight cost?
A minimum of INR 15 a bag would be necessary for compensating to some extent.
INR 50? Is that 50, 5-0, 50, right?
No, no, INR 15.
1-5, 15. Hello? Hello? Hello?
Yes, we can hear you. Hello.
Okay. Okay, yes. So you mean to say like INR 40 a bag will be like fine enough to cover all the costs, both the power and fuel and as well as the freight cost, right?
One also has to see whether the size by need -- the market's ability to digest that increase because there has been all round increase in the cost of construction. And the increases beyond a point will affect the demand itself. There's a very fine calibration between the -- maintaining the demand as well as getting the minimum remunerative price.
So sir, what kind of EBITDA per tonne can we expect for the full year of FY '23, sir, considering the situation, the price will not get absorbed in a full extent or something like that?
It would be rather premature to do a guesswork at this point of time when there are so many of uncertainties. But one would obviously try and look for bettering your previous figure.
Got it. Got it, sir. Sir, what is the debt figure as in the books, sir, as on this quarter, both for the standalone and the consol basis?
Baggaji, would you like to...
Standalone, we have INR 960 crores of debt. On a consolidated basis, about INR 1,850 crores. Because they have raised -- UCWL has started raising money for the expansion project. So in the March quarter, there is about INR 350 crores of NCD. So that's the reason as to why their debt has gone up. So it is total...
INR 1,850 crores, right, on a consol basis?
Yes.
We'll take our next question from the line of Navin Sahadeo from Edelweiss.
Once again, congratulations on a great set of numbers. My question was more on the valuation front. So of course, performance is great. In general, the balance sheet has seen like a material improvement. Now there is growth visibility. The ROE numbers look fantastic. Wanted to -- and I'm sure investors would also be eager to hear this, that in your assessment, what is the reason for JK Lakshmi trading so cheap -- materially cheap, if I may say, versus other stocks, especially North-based or East also for that matter where there is enough growth?
Basically, we don't see any reason. We -- as management, we perceive we are undervalued. It is for the investors like you to analyze and let the market know that this is a undervalued stock and has a potential for a huge upturn. I don't see any reason why it should be valued at such a low rate because it has huge potential. Only thing, it's a question of -- people keep asking about the question of INR 1,000 EBITDA per tonne. That eventually will come. We have done all the things, right? Whatever efficiency improvements were required to be done, we are already working on that. Other improvement will come in due course, and we'll graduate to that level. I hope that once we do that, that re-rating will happen.
Appreciate it. So can you -- for the sake of repetition, can you please mention what are the immediate efficiency enhancement measures? Like you recently did a Waste Heat Recovery of 10 megawatt. So is there more such efficiency measures, which you would like to highlight at this point in time?
Other than the Waste Heat Recovery, we are also increasing some solar capacity at various plants, and we have adequate land on that. Secondly, a continuous effort to reduce the logistic cost, improve the freight to more of direct dispatches, increase blending levels, all this will help us improve this logistic cost and thereby reducing our freight and the logistic costs. That will further help us to improve because efficiency-wise, in terms of cost of production, we are already one of the least cost producer. So we -- last 2 years we've been working closely on improving our logistic cost. And so those things will start bearing full benefits. We'll start getting full benefits of those efforts, which we have started pursuing over the last couple of years. And that should help us to graduate to this. This year, we would have graduated to obviously INR 1,000, but for this fuel cost increase. But going forward, we definitely hope to do so.
We also believe that there has been some concern on the working at East Chhattisgarh unit. But I hope that too has improved now this year considerably. The price regime at Chhattisgarh has been quite low, and that possibly could have been a reason. But I think that correction has taken place and that should also help. But I think more than that, we would be keen to hear from investors like you, what, in your opinion, needs to be done for correcting the rating.
Appreciate, sir, the response. Just one question, if I may. The expansion that we are currently working on, is that UCWL? Is there a possibility from a -- or rather a feasibility from a limestone availability perspective that we can have these expansions also at the standalone entity level going forward? Or there will be a challenge to that?
We have capabilities in the limestone availability at both Sirohi as well as Durg to go for expansion. So...
So if need be, we can go for another line -- another clinker line there?
Yes, yes. Either at Durg or at Sirohi. Capabilities are there or also the resources are there.
Our next question is from the line of Sandip Bansal from ASK Investment Managers. Sorry, Mr. Bansal, could you switch to a handset mode? We can't hear you clearly.
Is this better now?
Management team, can you hear Mr. Bansal?
Yes. Yes.
Yes. Yes, we can.
Firstly, I wanted to understand on the cost side. There has been a reduction in employee costs also. So is this purely because of volume or there are some other element to it as well?
Sorry, come again? Can you repeat your question?
Sir, the per tonne employee cost has also gone down. So is this only because of higher volumes or there is some other element as well?
It's because of the higher volumes.
That is the only thing? There is nothing else?
Yes. Yes, nothing else.
And sir, on the other expenses, you said that there were lower advertisement costs and efficiencies in fixed cost. Sir, what's the nature of such efficiencies, if you can spell out?
Lower fixed cost was basically, as I mentioned, for 2 reasons. One was the lower advertisement cost, and other fixed cost being the other expenses. Primarily last year, we had done this IPL. This year, we did not do IPL. So that is one cost which has come down. But overall advertisement costs and other costs has come down, overhead costs.
Sir, these changes in overhead costs, are they sustainable in nature? So -- or was it more like onetime?
We believe that those are sustain..
Sure, sure. And sir, just the last question on power and fuel costs. Sorry, I got confused. To one answer, you said that the power and fuel costs would increase by 7% to 8% this quarter. And on another question, you said that it would increase by 25%. So 25% was not factoring in the current coal costs, is it?
Yes, yes. Current coal -- that question was in response to if entire P&L was to be charged with current cost of procurement of coal. And the 7%, 8% was on a sequential basis based on what is likely to be there in the first quarter.
Sure. So sir, in the last quarter, we would have actually benefited from lower cost coal inventory, right?
Right.
Okay. Sir, if you can also maybe just restate the fuel mix for the last quarter?
That was about 30% was coal, 56% was pet coke and 14% was other, alternate fuel, biomass.
And sir, last quarter this pet coke mix would have been far lower?
Pet coke was 60%, biomass was lower. In fact, that's the reason, 10%. It was against 14% this quarter.
Okay. So we would have benefited also because of that?
Yes. You're right.
Our next question is from the line of Uttam Srimal from Axis Securities.
Congratulations on today's good set of numbers. Sir, my question pertains to our capacity utilization. So on a standalone basis, we are already at 90% capacity utilization. So how do you want to grow the volume? So any volume guidance for FY '23, sir?
We can further increase the capacity utilization and improve the blending. That can always go up. So that will help us improve the volume.
Okay. Sir, what has been blending ratio this quarter?
Sorry?
Blending ratio?
Blending, we did about 55% blending.
55%?
Yes.
Okay. And sir, with regard to value-added products, so what kind of traction you see in value-added products? And what could be your guidance for this year?
As far as value-added products are concerned, in this full year, we did about a total value of about INR 373 crores. So we would see some improvement therein, maybe 8% to 10% value growth.
Okay. And now last question, sir, one on premium cement. So how has been the sale of premium cement out of trade mix?
We are doing over 25% of our trade sales in the premium segment.
Okay. So it has increased from last quarter or it has remained the same?
So that always keeps improving only.
Our next question is from the line of Kamlesh Bagmar from Prabhudas Lilladher.
Sir, one question on the part of MAT credits. So how much is the balance left as on FY '21 and FY '22?
For '22, we have a balance of about INR 260 crores left.
Okay. And how much we have consumed in this year, sir?
We would have consumed about INR 44 crores.
Okay. And sir, on the part of this expansion projects, sir. So like is it INR 1,550 crores or INR 1,650 crores? What is the CapEx cost?
INR 1,650 crores, 1-6-5-0, INR 1,650 crores. It has been funded through a debt/equity of 2:1. INR 1,100 crores is the loan; and INR 550 crores is the promoter's contribution, out of which, we will -- they have announced a rights issue, which may be up to INR 450 crores.
Okay. Okay. And sir, like given the cash flows which we are generating like, say, operating cash flow, we would gain around INR 800-odd crores, and this CapEx would be spent over 2, 2.5 years. So like I said, our net debt would have peaked out in this year or it would go further from the current level? I believe we have a net debt of roughly around INR 650 crores, which is around 20-odd percent year-over-year.
We -- that net debt position basically will depend on how much we are borrowing going forward for this expansion and when we are doing that borrowing. So we expect the debt -- net debt, which is presently on a standalone basis, about -- just a second, is about almost negligible is there, net debt. On a consolidated basis, it will increase, obviously, because of this borrowing which we do for the expansion. Maybe maximum about INR 100-odd crores, INR 100 crores, INR 250 crores it will increase.
Okay. And sir, on the -- one question regarding the -- this margins. Like say this quarter, we have done margins upwards of INR 870, and we have took a price increase of at least like INR 250 on net basis. And even if I take 10% quarter-over-quarter increase even in fuel and the freight, you would be easily able to maintain the margin quarter-over-quarter. No doubt, there would be lower volume quarter-over-quarter. But given the numbers we have suggested in the power and fuel cost, we are saying hardly 7% to 8% increase would be there in power and fuel cost quarter-on-quarter. So how -- why we are not seeing the margin getting improved or even getting maintained at these levels?
We don't see any reason why it should not be maintained. We endeavor to maintain it. There's no reason why it should not be. But depends on how much the price increase, which we have taken, sustains through the quarter.
And the volume that no one is able to get was -- as I was mentioning earlier, the demand was impacted in April and May also partly because of that aggregate strike in Gujarat, and Gujarat is a big market for us. Of course, it has now since resumed, but the volumes would probably be impacted for the quarter as a whole.
Okay. And Bidkar sir, lastly, like, can we provide the figures on kilocal basis like, say, this quarter and last quarter? Q3 and Q4, how much was the power and fuel cost per kilocal or 1,000 kilocalorie?
I don't have figures right now. We can separately provide offline.
Our next question is from the line of Rajesh Ravi from HDFC Securities.
My question pertains to, first, again, on the margins. We see this sharp fall sequentially in the absolute employee cost and other expenses. One explanation for other expenses you mentioned is reduction in advertisement cost, but the amount seems to be significantly lower. So were there some big provisions which had been reversed in this quarter? Also, if you look at the other expenses as a percentage of net sales historically, last 7, 8 quarters have ranged between 12% to 13%, whereby this quarter, it has come down to almost 9%-odd or on a consol basis. So how do you read into these numbers?
Actually, what happens when we do the quarterly accounting -- and at the start of the year we make a budget of basic expenses. And all the expenses not get booked on a quarterly basis. So at times, we make a provision in the respective quarter. Otherwise, if all expenses were to be booked in the fourth quarter, then obviously -- then those loading will come in the fourth quarter. At times, it so happens that when we do a pro rate provisioning quarter-wise, in the year we find that actual expenses, in some cases, be lower than the provision which we have made through the years. So that's the reason -- obviously, the total cannot exceed whatever we have actually incurred in the fourth quarter and for the year, the whole. So obviously, that adjustment gets done in the fourth quarter. Otherwise, there is no reason as to why there should be some aberration. But we are working very hard on that -- reducing our overhead costs, reducing our other costs, be it advertisement or other costs. So that we are working very hard on that. So that is the reason at times.
Okay. And secondly, in terms of the fuel cost in Q4 sequentially, what was the impact versus Q3?
Sorry Q3?
Q3 versus Q4, how did your fuel cost -- which is INR 9,000 per tonne in Q4, how did that number move between Q3 and Q4?
Q4, it was INR 9,400. So because of this increase in the -- our Waste Heat Recovery capacity generation and also increase in the other biomass consumption from 10% to 14%, that has helped us to reduce the overall cost.
No. This INR 9,400 was how much in Q3, sir?
INR 9,400 it was for Q3, INR 9,000 in Q4.
Okay. From INR 9,400, it came down to INR 9,000, if I'm not mistaken. Is that right?
Right. Right.
Okay. And sir, a few more questions. In terms of the electricity and greenfield. Greenfield, this biomass, it has increased from 10% to 14%. Is that understanding right?
Right.
And is that a sustainable number for you? Or it can go further from hereon?
This should be sustainable. But at times, in monsoon there may be some issues, second quarter, blips may be there, but otherwise it should be sustainable.
And sir, with per kilocal costing would be much cheaper compared to your normal fuel mix?
Yes. Yes, you are right.
Less than INR 1, is that a fair understanding?
That I don't have. Well, I'll need to check it out and confirm.
Okay. And sir, this blended cement mix at 55%, any thought on increasing this to, say, 70%-odd? And if so by...
Yes, it will happen. In due course, it will happen. The question, which was asked, if the capacity at clinker level is fully utilized, how would you further increase the volume? So that will come through the improvement in blending only. So there is ample of scope for further without clinkerization increasing capacity we can increase the volume, cement volumes. Ample of scope is there.
Okay. Great. And 2 last question, clinker production at both the units, Udaipur and JK Lakshmi. And will the CapEx for the Udaipur will be spread equally between next 2 years?
CapEx, as far as it's concerned, you are right. Broadly it should be around that levels. And maybe INR 1,650 crores, maybe around INR 700 crores in the first year, INR 900 crores in the second year. That could be. And the volume is 26-point -- cement production is 26.19 for JK Lakshmi and 4.21 for UCWL.
And clinker, sir?
Clinker is 17.35 for JK Lakshmi and 3.3 for UCWL.
Okay. And if I can take one last question in terms of your net debt, which is around INR 650 crores currently on a consol basis.
Sorry? Sorry, can you repeat your question?
Sir, consol net debt number, which is at INR 650 crores on a consolidated basis, given that you will be borrowing INR 1,100 crores over next 2 years, what would be the net debt level that you are looking at, peak net debt, at the commission -- end of FY '24 sort of number?
Out of this INR 650 crores -- out of this INR 1,100 crores, we have already done a borrowing of INR 350 crores in UCWL, right? So what we will say about -- the balance about INR 750 crores or so, right? Then in next 2 years, the repayment plus the generation should not see any major dramatic improvement in net debt on a consol basis.
Okay. So you expect the net debt on a consol basis to remain under INR 1,000 crores?
Yes, for sure.
Our next question is from the line of Rushabh Shah from Anubhuti Advisors.
First question. Out of the total CapEx guidance of INR 1,650 crores, what are we targeting for the current financial year?
About INR 700 crores.
That will be at the consol level?
You are talking of INR 1,650 crores. That is an expansion project of UCWL...
UCWL, yes. And for standalone?
In response to that, I'm saying that out of that, about INR 700 crores will get spent in the current financial year. In JK Lakshmi, we are not doing any major CapEx. So only normative CapEx of about INR 70 crores, INR 80 crores would be there.
Okay. So in all, it can be around INR 780 crores to INR 800 crores of number?
Yes, but dependent on the progress of the project, around INR 800 crores should be there.
Understood. And second, with respect to our current cash and borrowing levels. So if I can combine the current investments and cash balance, that roughly comes up to INR 1,200 crores. And versus that, our debt levels are at roughly -- gross debt is at INR 1,850 crores. So...
Yes.
Maintenance will be basically used for this full CapEx purpose?
Sorry?
I just wanted to understand why is the cash levels at so elevated levels in the books. Will this be completely used for the CapEx part?
Cash levels are at elevated level at the year-end for 2 reasons. One, we raised an NCD of INR 350 crores on 16th of March, right? The 16th of March till 31st of March in UCWL, whatever could be utilization. Balance is appearing in their bank balance, almost INR 300 crores plus. Similarly, in JK Lakshmi, we raised an ECB of about 10 million in last week of March, so about -- that amount is about INR 75 crores, INR 80 crores, was there in the cash and bank balance. But it will get utilized in the project for which it has -- the money has been raised. Other than that, the balance -- cash balance is the normative cash balances which the company carries. And in the current year, we -- in JK Lakshmi, we may use in the rights issue for subscribing our share in the rights issue of UCWL. So that will further get used apart from further addition to the yearly cash generation, so in JK Lakshmi.
Our next question is from the line of Indrajit Agarwal from CLSA.
I have 2 questions. First, after the 10-megawatt capacity expansion of WHRS that we have done, how much further scope we have to expand on WHRS? And what is the pipeline we have right now?
Frankly, we don't have much scope now on further addition in the waste heat capacity. We have reached a 33-megawatt waste heat recovery, which is 25 at the mother plant in Sirohi and about 8 in Durg. As of now we don't see any further addition, but some technical improvement can always increase the capacity by 1 or 2 megawatts. There may not be any quantum increase like we have done this time. So there may not be any opportunity therein. Some technical innovation improvement can always help us to increase that 33 capacity to 35, 37, like that.
Yes. But new capacity expansion that we are doing, it will be waste heat recovery...
At Udaipur, obviously -- obviously, at Udaipur, obviously, with the new capacity escalation, new kiln will have a waste heat recovery of about 7, 8 megawatt.
7, 8 megawatts.
So that is in Udaipur.
No, that is helpful. And initially, you talked about demand in April and May and how the material cost across not just cement, other materials is impacting demand. So if you can give some more color on how April demand has been. I know Y-o-Y comparison may not be the best indicator. But to say from 2, 3 years back, say April '19, which would be more cleaner year, do we see a growth in April '22 over April '19 for the industry? And how do you see May panning out so far?
It has been more or less the same level as April '19. And as I was telling you that part of the region could be -- East was better definitely, better about 7% to 8% compared to April '19. But in North and West, it remained more or less at the same level. And Gujarat has actually got impacted because of the strike. So again, an one-off region. And one would expect that growth to now be visible in May and June.
Our next question is from the line of Dharmesh Shah from Emkay Global.
Sir, just I have questions on the sales mix. Is it possible to provide the sales breakup between the North and East region?
No, we don't provide that, sorry.
Okay. Okay. And sorry to further drag you on the cost side. But can we get a sense on the ad spent figure for the Q4 '21 and Q4 '22?
Sorry?
Can we get an idea on the -- how much will be the ad spent figure for the Q4 FY '22 and last year's figure?
Head-wise expenses we don't share in the investors call, please. Sorry.
Sure, sir. And sir, is this the correct understanding that in the Q3, because of the strike, we have built up some inventory and that inventory has also benefited in this quarter?
Yes. Obviously, that was -- there was a strike in the Eastern side, Durg plant, transport strike , which impacted. So that impairment -- the production was also cut down. And the strike was there. It's not only the dispatches. So some benefits are there. Some carryforward inventory was there, clinker stock, so that helped us in the current day last quarter. But the...
Those levels can be sustained. If you are making a question from the point of view, whether this will be sustained or not, this can be sustained for our production capacity.
No, sir, I am just thinking because see, our Q3 EBITDA per tonne has actually impacted more than the industry. And you are [ supporting ] the Q4 better -- normalized for the H2 numbers, then it's in the range of INR 750 per tonne. So I'm just trying to get a sense that how much improvement we can see from the INR 750 or it will be broadly remain in this range?
There will certainly be an improvement over last year based on various efficiency drives, which we have carried out and full impact of which will come in the coming year. Barring these uncertainties regarding the coal pricing, pet coke pricing and we have our ability to pass on the cost increase, but otherwise, other things remaining the same, it should improve.
[Operator Instructions] We'll take our next question from the line of Ronald Siyoni from Sharekhan.
I had one question regarding INR 1,650 crore expansion. Like as you said, INR 350 crores was borrowed -- borrowing done by UCWL. So how much debt we are going to borrow with respect to this expansion? And apart from, say, right issues subscription, what would be advances or funding requirement to be given to UCWL from standalone basis?
As far as UCWL is concerned, this rights -- this total expansion of INR 1,650 crores is being funded through a debt of INR 1,100 crores, out of which INR 350 crores was borrowed in March. Balance will come in the current and next year, the balance INR 750 crores. So that will be INR 350 crores plus INR 750 crores will make it INR 1,100 crores. As regards the promoter's contribution of INR 550 crores, about INR 100 crores to INR 150 crores will come from their internal accruals. And balance, INR 400 crores to INR 450 crores, would be the rights issue. And our subscription will be pro rata in the rights issue, depending on what -- who we hope that people subscribe fully to their share of 25%. So balance will -- up to 75% will come from the parent company, JK Lakshmi. So that will complete the entire funding of UCWL expansion.
Okay. Okay. Great. So additional that INR 750 crores will be raised at UCWL level only?
Yes. Yes, naturally. Because the expansion is there. So obviously, there's no reason why it should be raised in JK Lakshmi. There will not be any additional fundraising for this expansion in JK Lakshmi, not even a penny.
Our next question is from the line of Navin Sahadeo from Edelweiss.
Just one more question. Sir, recently, as in, in the same Board meeting, Arun Shuklaji has been elevated as a Director to the company. So just wanted to understand, does it change any role for him? Does he get more responsibilities in the active day-to-day management? I believe he was looking at sales and marketing. So if you can just throw some light for his role in the day-to-day management.
He was not only looking after sales and marketing. It was -- he was looking after the entire operation as President of the company. So right from the day he joined, the way we have been talking that in the con call earlier also that he is basically the President of the company looking after both the operations as well as the marketing side. So that is number one. And yes, you are right. In the recent meeting, he has been elevated to the level of the President and Director. So obviously, his role will be wider as the President as well as the Director of the company.
Our next question is from the line of Shravan Shah from Dolat Capital Markets.
Sir, just 2 questions. First is the UCWL 1.5 MTPA, which is the next grinding unit. So currently, by October, we will be having a 1 MTPA grinding at Udaipur and 1.5. Where it will come in the Rajasthan?
Yes, good question. This we should have talked earlier also. Now finally, the -- after a lot of consideration, deliberation and due diligence of various places, finally, UCWL has decided to do the entire grinding capacity of 2.5 million at the mother plant itself. So there will not be any split location grinding unit for UCWL. The entire clinkerization of 1.5 million clinker and 2.5 million cement capacity will come [Technical Difficulty].
So while there would be some saving in the project cost on -- emanating from the shifting of the grinding unit from a split location to the mother plant, but that -- based on the recent increase in the commodity prices, we believe that we'll be able to curtail overall project costs within the earlier announced INR 1,650 crores. So while there will be some saving on account of the shifting of this, as I mentioned, split location to the mother plant, but then that will be more than offset by the increase in the prices like steel, aluminum, copper, cement, all that. So we -- in spite of this commodity price increase, we'll not see any cost escalation in the project costs, which continue to -- would remain at INR 1,650 crores.
Okay. So out of this 2.5 MTPA grinding, 1 MTPA will start by -- are we -- we are targeting by -- to start by October '23 and the remaining 1.5 by March '24?
No, we are targeting the entire 2.5 single grinding unit will come up in March '24 itself, both. Clinkerization may take about 3 months earlier, can happen. But March '24, the entire 2.5 million grinding will come on.
Okay. Because previously, we were thinking to start by October. So now maybe the clinker will come by December and the entire grinding by March '24?
Yes. Yes. As of now, that is what we've planned.
And therefore, last question in terms of the trade mix. So I understand we want to increase the blending ratio and increase the trade share. But if I look at the last so many quarters, it is in the same range of 53%, 55%, so this quarter, 56%. So anything specific? And then where we can increase in, let's say, any rough idea in terms of, let's say, from 56% to 60% on a yearly basis? Is it possible by FY '23, particularly is it in the North only? Or it can happen in East?
East, we are already at blending levels. But overall, it will increase by about at least 4%, 5% every year. That is our target, upgrade as well as blending.
Ladies and gentlemen, due to time constraint, we'll be taking our last 2 questions. We'll take the next question from the line of Kamlesh Bagmar from Prabhudas Lilladher.
Sir, would you at least be able to quantify like how much was the IPL and like that particular expense in the base quarter? And were there BCG consultancy charges in the base quarter?
There were some BCG consultancy. But we -- head-wise we don't provide, sorry. These IPL charges, how much are there, how much is BCG, we don't share, sorry.
But sir, on a steady run rate basis, how much could be the other expenses? Because -- like if we see this year, like on an average, it has been roughly around -- like last year, it was INR 500. Prior to that, it was around INR 370. And like for this quarter, it has been much, much lower as compared to what it used to be. And for the year as a whole, like say, it has been roughly around INR 550 per tonne, but this quarter it was INR 400 only. So any run rate...
INR 550 will -- for the year is a right figure. Some escalation on account of the normative inflation will happen, but you can take INR 550 as year and divide by 4 to assess the quarterly number, plus some inflationary factors.
And lastly, sir, on the power and fuel cost, like no doubt, so the comparison is not visible because on a per tonne basis because of the mix change it won't be visible. But like on a kilocalorie basis, going forward, like it's around to 8% increase quarter-on-quarter, is 7% to 8%...
I don't have the figure on kilocalorie basis right now separately.
Yes. Yes. But sir, 7% to 8% looks very small because -- so would we be seeing a larger impact in Q2? Or how it would phase out? Because the way pet coke prices have gone up. And even if we see Q4 year-over-year, we are seeing hardly 40% increase year-over-year. So I wanted some clarity on that part. Because Waste Heat Recovery could have saved you only around INR 50, not more than that.
Waste Heat in rupees, that has helped us considerably apart from the improvement in the efficiency, but the full impact of the cost increase will -- as I mentioned, will come in the coming quarters. Barring improvement in the -- further improvement, if any, possible through the biomass increases or the alternate fuel increases, which is now already at 14%, our endeavor is to further increase, but let's see how much it will happen. That's the reason as to why it could be in the current quarter immediately 7%, 8% only. But if one were to see the full impact on the present procurement cost of the coal, it could be as high as about INR 200 per tonne, plus.
We'll take our next question from the line of Nishant Bagrecha from Incred Capital.
I hope this is the last question because I have another meeting lined up...
This is the last question, sir. Mr. Bagrecha?
Quickly one question. So as you have shared the Q4 sales volume, so can you -- could you share the clinical production number or the sales volume for FY '22 on a consol and standalone basis? This is the only question I had.
Total sales volume were 105.77 lakh tonnes for JKLC, 96 -- almost 96 lakhs cement and 9.78 lakhs clinker. And on consol level, it is 112 lakh tonnes, 101 lakh cement and 11 lakh clinker.
Thank you. I now hand the floor back to Mr. Vaibhav Agarwal for closing comments. Over to you, sir.
Yes. Thank you, Inba. Sir, just one thing, Bidkar sir, if you can also share the consol volume for the full year adjusted for the -- inter-company adjustment, if you can give that number please?
That is adjusted, yes. That full value of 112 is adjusted for the interunit sales.
Okay. Thank you. On behalf of PhillipCapital (India) Private Limited, we'd like to thank the management of JK Lakshmi Cement for the call and many thanks to the participants joining the call. Thank you, sir. Inba, you may now conclude the call. Thank you.
Thank you. Thank you, Mr. Vaibhav, and thank you, everyone.
Thank you. On behalf of PhillipCapital (India) Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.