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Sagar Cements Ltd
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Good morning, ladies and gentlemen. Welcome you all to the 4Q FY '22 and FY '22 results conference call of Sagar Cements Limited. We have with us from the management, Mr. Sreekanth Reddy, Joint Managing Director; Mr. K. Prasad CFO; Mr. Rajesh Singh, Chief Marketing Officer; and Mr. Soundararajan, Company Secretary. We will start the session today by opening remarks from the management and then will be followed by a Q&A session. [Operator Instructions] I would now like to hand over the call to Mr. Gavin Desa of CDR for his opening remarks. Over to you, Gavin.
Thank you, Manish. Manish has just introduced the management on Sagar Cement's Q4 and FY '22 conference call. Welcome to the call. We'd just like to add that some statements made in today's discussions may be forward-looking in nature and a note to this effect was stated in the conference call invite that has been sent to you earlier. We have trust you have had a chance to look at the presentation.
I would now like to invite Mr. Sreekanth Reddy to begin his opening remarks. Over to you, Sreekanth.
Thank you, Gavin. Good morning, everyone, and welcome to Sagar Cements earnings call for the quarter and year ended March 31, 2022. Let me begin the discussions with a brief overview of the market in terms of the demand and pricing, post which, I will move on to Sagar-specific developments.
Overall, volume growth has been fairly resilient during the quarter. We have seen realizations well trending higher compared to the exit price of March quarter, largely owing to higher input prices. Prices across raw materials have seen a sharp surge, be it core freight and the packing material in the recent times. Demand momentum though has remained fairly buoyant which has helped sustain the recent price hikes. While we have started seeing some moderation in raw material prices, it would be a bit premature to comment if things have normalized on that front.
The situation is fairly dynamic with extreme moves in either directions. It is better to observe them before commenting on a definitive time. On a long-term basis, though, we remain positive on the business and believe greater government allocation to infrastructure into low-cost housing projects to provide the requisite flip to demand growth, both urban and rural.
Moving on to Sagar-specific developments. We are pleased with our volume growth during the quarter, which has seen an improvement both sequentially as well as annually. Realizations have further improved compared to the exit price of the quarter, largely necessitated by unrelenting increase in fuel prices. Demand sentiment as well is fairly buoyant, helping sustain the price revision.
Another noteworthy development was the investment by Premji Invest to help meet the organic and inorganic aspirations of the company. We will jointly work with Premji Invest towards setting up a best-in-class governance process in our endeavor to drive the value creation to all our stakeholders. We are also pleased to announce that we have been awarded the Best Management Award by the Government of Telangana for its multiple unit, and our Gudipadu unit was awarded the state level and zonal level, overall second price for the Mine Safety - 2022, in appreciation of the safety and other works pertaining to the mines by the Mines Safety Association of Karnataka under the aegis of Director General of Mine Safety, Government of India.
Our cost rationalization measures and better inventory management helped us partly control the pressures of the input prices. As indicated earlier, we have increased the usage of domestic coal and lowered our consumption of pet coke during the quarter, which has helped us lower on our operational costs.
Going ahead, we believe commissioning of our new units coupled with strong balance sheet following the preferential allotment position us well to deliver this steady and consistent growth.
With that, let me now move on to our quarterly performance. We reported revenues were INR 502 crores during the quarter, driven largely by volumes. Overall contribution from the 2 units commissioned during the year stood at 77,836 tonnes. EBITDA for the quarter stood at INR 61 crores as against INR 104 crores generated during Q4 FY '21, while margins for the current figure stood at 12% as against 25% reported during the corresponding period last year. As mentioned earlier, we also had to operate in the rising input price environment owing to which we registered a margin compression and also due to the start-up costs that have been incurred at both the new capacities.
The overall impact on the profitability that would be even more severe but for our prudent procurement and cost rationalization strategy. We have been working towards increasing the share of domestic coal to better manage the power and fuel expenditure. Higher depreciation and interest expenses result we lost for the quarter of INR 19 crores as against INR 44 crore profit generated during Q4 FY '21. This is also due to the borrowings that we have done for a potential acquisition.
Average fuel cost stood at INR 1,596 per tonne as against INR 870 per tonne during Q4 FY '21. Elevated prices of coal and petcoke resulted in higher per tonne cost of fuel for the quarter. Freight costs for the quarter stood at INR 776 as against INR 742 per tonne during Q4 FY '21.
From an operational standpoint, Mattampally plant operated at 66% utilization level, while Gudipadu, Bayyavaram , Jeerabad and Jajpur plants operated at 83%, 72%, 30% and 9%, respectively, during the quarter. On an annual basis, net revenue for the operations for the year stood at [ INR 1,597 ] crores as against [ INR 1371 ] crores generated during the last year, increased by 16% year-on-year.
EBITDA for the year stood at INR 276 crores as against INR 400 crores, reported during FY '21, declined by almost 31% year-on-year. Profit before tax for the year stood at INR 104 crores as against INR 281 crores reported during FY '21. Profit after tax for the year stood at INR 59 crores as against PAT of INR 186 crores reported during the FY '21.
As far as the key balance sheet items are concerned, the gross debt as of 31st of March 2022 stood at INR 1,503 crores, out of which, INR 1,324 crore as a long-term debt and the remaining construes working capital. Out of this, around INR 500 crores has been borrowed for a potential acquisition.
Net worth of the company on a consolidated basis as of 31st of March 2022, stood at INR 1,309 crores. Debt equity ratio stands at 1.01:1. Cash and bank balances were at INR 163 crores as on 31st of March 2022. The Board of Directors has recommended a dividend of INR 0.70 per equity share of INR 2, which is 35% on 13,07,07,548 equity shares of the company, translating to a dividend payout of INR 9 crores.
That concludes my opening remarks. We will now be glad to take any questions that you may have. Thank you again.
[Operator Instructions] The first question is from Shravan Shah.
Sir, first, coming on the pricing front. So if you can help us in terms of the fourth quarter in the East and South, how much the pricing that we have done and post March in April and May, how much prices we have raised? Because in South, my understanding says the price increase is relatively lower versus the other parts of India. So just wondered your thought on that?
Yes. Good morning, Mr. Shravan. See, our observation in the market, southern markets, especially the Hyderabad market, it has been flat from March to April. May, there is a slight change, but we are still in the every part of May. But from exit price of December to March, there has been an increase of around INR 15 per barrel. From March to April, they more or less remained flat. Bangalore from December, which was at INR 365, to March it actually increased by INR 5. And from March to April, it decreased by INR 10.
Chennai is -- December was at INR 380. It's totally remained flat at INR 380. And more or less, it is flat for the even April month. Our specific markets of East, which includes Berhampur as well as, to a certain extent, Bhubaneswar December -- the March price was around INR 300 in Berhampur and INR 310 for Bhubaneswar. They increased the April month from INR 300 to INR 320 in Berhampur, in Bhubaneswar from INR 310 to INR 330. Indore, we have seen December prices at INR 330, which increased to March by INR 10 to INR 340, and from INR 340 they moved to INR 370 for the March month. This is our reading of the markets.
So any -- are you feeling any pressure? Or what's the main reason do you see in terms of the prices not moving much in South, so any thought on that? And do you see that the remaining months of this quarter, May and June, can we see -- because the cost pressure, everybody knows the cost pressure. So what is stopping in terms of the prices to go up?
See, I think the demand has been okay, but it has been lackluster, sir, it has been highly fluctuating. I think that could be one of the reasons why the price did not follow the input price in terms of the curve, yes, that's what we strongly think. Our internal view, again, it's very specific to our internal view is that it might continue similar. But this quarter, maybe into the next quarter before it actually starts rising to follow the input prices is what we strongly believe.
Okay. Sir, now coming to the question in terms of the demand and the costing. So demand, so if you can once again help us in terms of last time, what we guided in terms of both the new plants' utilization, how we are expecting for full year and broadly in terms of what kind of a volume growth that we are targeting for this year? So that is one aspect. And second, in terms of the costing, I understand it is very difficult and the kind of fluctuation is happening in the coal prices, but whatever is till now inventory we have, how do we see particularly the -- at least this quarter in terms of the costing, how much we can expect it will go further up?
Yes. Now let me address the first question first in terms of our demand outlook. Our demand outlook is to do 5 million for the current year. This is primarily because we are expecting a flat to slightly positive kind of a tick for the existing markets. And with both the new plants reasonably ramping up should be significantly contributing to this 5 million, sir.
Out of 1.4 million incremental demand, we expect sizable volumes to come from both these plants, that is Jeerabad as well as Jajpur and more specifically from Jeerabad and to a lesser extent into Jajpur. As in the first half, we expect Jajpur to slowly ramp up. And only during the second half, we expect Jajpur to fully catch up. All in all, we are expecting a 5 million tonne consolidated kind of a volume outlook is what we have for the current year.
Now going to the input prices, sir, as you rightly mentioned, it is difficult for us to predict anything. But with the current inventories that we have. In the past, we used to maintain a 6-month inventory that got reduced to 4, 4.5 months now. So we do have inventory of well. The only thing that we are not in control at this point of time is both the inward and the outward phase that is exactly what we are not in a situation to predict. Overall, we are expecting the cost to move up anywhere between 2% to 3% from the last quarter to this quarter primarily on account of freight both inward and outward.
Coming to the full landed cost, as I mentioned, we are reasonably secured for this quarter and halfway through the next quarter. So we are not expecting a significant jump. But for the domestic petcoke pricing, which has been in tandem with the imported petcoke, we do lose close to 30% of petcoke that might have some influence. But domestic coal, we are reasonably sure that availability and cost is related, yes, we love to be in control for at least this quarter and halfway through the next quarter.
Sir, my last question is on the finance cost and the debt. So the finance cost this quarter has significantly went up. So it is a INR 47-odd crores. So will this rate continue? Or will it decline? And in terms of the debt, I understand that you mentioned that INR 500 crores is for acquisition. So anything you want to give a highlight of would it be organic, inorganic or anything, have you moved on inorganic part or can be materialize or can we expect some announcement at least in next 1 or 2 quarters? And ultimately, how do we see the dates by end of FY '23?
We did rate that our net debt would not exceed more than INR 800 crores to INR 850 crores. So that remains. But for this INR 500 crore debt, which we have taken for an acquisition. As I mentioned, it's an acquisition. So organic is ruled out. We are definitely looking -- chasing a couple of things, and we are more than hopeful that it would get translated either at the end of Q2 to early part of Q3.
And regarding the finance cost?
See, I think finance cost, as I mentioned to you, sir. I think we are in control of it. The only reason why it searched is because of this incremental INR 500 crore, which has been borrowed for the acquisition that added up to a normal kind of less than INR 800 crores kind of -- this thing we don't expect a major shift in the real debt for the operation. The only debt that we have -- that we are servicing at this point of time incrementally is for the acquisition. Once it gets materialized, I'm sure that also should get moderated to a big extent.
[Operator Instructions] Dhiral, can you please go ahead with your question.
Sir, any reason for expecting a flat growth in the expecting core regions.
Yes, Mr. Dhiral, can you please speak clearly. Sorry I missed on your question.
Sir, any reason for expecting a flat growth in our core regions?
So his question is any reason for expecting a flat growth in your core regions?
Yes, the expectation is that there is some amount of new capacities that are likely to come up. So given that scenario, we believe that whenever the market is very tough, the incremental demand, which we are expecting around AP and Telangana to grow at 5% to be attributed to these 2 capacities rather than we getting it. Same would be the case with the existing markets that we operate, both Tamilnadu, Karnataka, Maharashtra, we do expect whatever is the incremental growth is likely to go to the new capacities rather than to an existing mindset. So we have always been a market player. So we believe that would definitely be taken by the new capacities rather than coming to us.
How much capacity is coming on these that you are talking about?
Mr. Dhiral I'm sorry, your voice is very feeble, sir, can you repeat your question, please?
Sir, how much new capacities are coming up in our core regions, as you talked about, AP and Telangana?
See, I think over the next 1.5 to 2 years, we are expecting the -- somewhere around 9 million in these 2 states. We are expecting 9 million in these 2 states and other close to 10 million in Odisha.
The next question is from Madhu Babu. Please go ahead Madhu.
So just because of the overall inflation and now there is a rate hike also. So do you say that individual home building spend coming down? And second is how is the spend in AP government which is obviously facing some challenges in terms of the overall budget sir?
Yes. See, I think with the inflationary kind of trends, what we are seeing is the major reaction is to slow down. But even in the past, our experience has been that it's only momentary. Once the inflationary price trend gets set into the mindset of most of the people, we believe the trends to come back. So a difference -- a small difference is always a possibility, but that could be for a very, very short period sir.
At this time, the inflation impact is quite sharp. But if you see not only the steel, but all the other building materials, they have literally doubled over the last 3 quarters to 4 quarters. So since the impact is very, very severe, we do expect some amount of slowdown, but it could be momentary once people get adjusted that this inflation is not going to end on anytime soon. We expect the housing construction to recover and recovery to be very sharp once the reconciliation happens or the inflationary pressures come down.
And just on the government spending on the AP side?
The government spend, our experience is that typically, post March, it tends to slow down. but that has not been the case in the current state of affairs. For past 15 days, there were no orders, sir, from the government. But for the last few days, at least close to 20 days that we have seen, there has been a surge of orders from Andhra government.
So we expect Andhra government to be very, very aggressive in their spends because it is part of their election commitment. And even in the past, we have seen whenever any of the governments gear up for the elections, which is 2 years. So I think that crop started now. So we do expect most of the state governments which should be going for election over the next 2 years to accelerate the spend. So that is the trend that we have seen even now.
Thank you, Rajesh, you may please go ahead with your question.
My question pertains to the interest costs on the debt, which is borrowed for the acquisition? And is there any time period, any lock-in period for the same?
Yes, debt, it's borrowed from 3 institutions, sir. Yes, there is a definitive kind of lock-in period, ranging anywhere between 18 months to 2 years, Mr. Rajesh.
And what is the interest?
Yes, the average cost is around 12%.
How much, 12%?
Yes sir.
Okay. Okay. And how about the other borrowings that you have on books?
The average is at around 8%, sir.
Okay. So the blended will be close to 10% for you. And this quarter, in the June quarter, the realizations you are mentioning are broadly flattish versus March quarter, while any of the industry is well aware there is a sharp spike in the cost reserve. So what would -- that would obviously be evident that March quarter has been a weak one in terms of the margins. So are we sharing at further sharp fall in margins for this place, given that the pricing doesn't seem to inch up April has been...
Yes, Mr. Rajesh, this I'll speak for myself. That's easier. So our experience is that March quarter, as you have seen, there was a lot of pressure on the both input as well as the realization. In our case, very specifically, we had an issue because we were starting up 2 new plants. So as you know, the start-up costs usually tend to be higher. And the operating capacity utilization of both the plants were relatively lower. So that did put pressure on our margin. If you exclude that, we would have been a lot better, and we are lot better.
And getting into the Q1, sir, ramp-up from these 2 actually is helping us. In our case, it's too soon, but we have seen that though the realizations moved only to a certain extent, not to cover the major cost but there has been a significant improvement in our EBITDA per tonne kind of numbers, it's purely because the start-up costs and everything has been done. And at the same time, the operational utilizations have also gone up for those 2 plants. With that, we have seen our EBITDA moving up EBITDA per tonne moving up significantly.
Okay. This is heartening to know, sir. But could you quantify how much would have been the impact of the startup cost of the 2 plants in the March quarter numbers?
Yes, both are relatively -- sizes are very different. But all in all, it could be around anywhere between INR 100 to INR 150 per tonne would have impact on a consolidated number.
On total basis okay. So this INR 540 would be close to INR 700 for you?
It should be slightly higher than that. It should be the case.
Okay. So even taking that INR 700 as a base and realization improvement has been more or less flattish and cost for sure would be going up by at least INR 30 on an average project, INR 30 a bag means INR 500 to INR 600 per tonne. So how do you see to counter that? I mean, even factoring that in is your margins expanding or you're referring from your first inventories?
Yes, Rajesh, it is not INR 30 from quarter-to-quarter, sir. I think the overall costs have gone up year-on-year, it is almost around INR 40 to INR 50. But there was a setup in the realization uptick. So what we expect is that realization has only moved up by, say, not even 10% of the cost input price as a percentage basis points but volumes did help us to cover some amount of cost pressures.
The margin compression, we are expecting not as severe as it went by, but unless prices move up, it's likely that we still could be under some pressure as far as margin is concerned going forward unless there is a pass-through of these prices. Quantifying them is too soon, I think, we would be very happy to come back to you by end of this quarter, exactly how the trend lines are. I think it is too soon for us to really quantify the real impacts for the current year.
Thank you. Mangesh you may please go ahead with your question.
Sir, my question is regarding the fuel cost. So in the presentation that you have mentioned the domestic coal now constitutes almost 40% of the total. I just wanted to know where we can see it going forward. How much would that increase to?
And secondly, sir, on the petcoke side. So we have mentioned that the current price of that petcoke is almost double of that of what we have actually realized in 4Q, so when do you expect that to hit our cost structure? Is it in 1Q itself or 2Q?
Sir, we generally do on an average kind of a costing. So there is nothing new that you should expect, except for any further increase that is likely to happen. We have been consistently rating about 60% to 70% to the domestic world. Since the Jeerabad plant also has come up, where we are sourcing the domestic petcoke percentage, there is a small shift.
But for that, we started switching both Mattampally as well as Gudipadu plant. It is almost 60% to 70% domestic coal and 30% to 40% would be the domestic petcoke. And we are using 95% domestic petcoke at Jeerabad. And these are the costs which we have seen, which is on an average basis. So we don't try to keep low cost in terms of booking. Yes, we do it on an average inventory cost level. So it may not alter the equation quite soon. It's a continuous kind of a process. So there is nothing new that is expected on the cost side other than what you have already seen. But for the freight, sir, but for the freight. So whatever is the incremental freight cost that would keep coming, but that would be an addition to the overall kind of a cost.
And sir, another question I had on the markets sir that you operate in. So if you can highlight what kind of demand was there in FY '22? And how much growth do you expect in FY '23, if it is possible?
See, our rating of the market is last year, AP and Telangana grew by almost 7%, sir. So we are also expecting a 5% growth for the current year. Tamilnadu has grown by 25%. These numbers look high because of the earlier year rate was very low. Here we are expecting a 5% to 7% growth in these markets, sir. Karnataka grew by 20% last year. So we are again expecting a 5% growth. Maharashtra grew by 15%. We are expecting a 7% growth. Odisha was flat for last year, but we do expect a 10% growth for the current year. MP grew by 20%. We are expecting a 5% to 10% growth for MP for the current year.
And these numbers take back all the states demand by 2 to 3 years back, sir. So these are not new numbers, with the growth number that I'm trying to project, it's going back to the pre-COVID kind of an events, this is not new. And some of the states slowly start preparing for their election. Some states aggressively spent 2 years before the election. So that also has been considered for this outlook. But the outlook has a small career that the inflationary pressures we believe to remain similar, any upsurge could impact these demand outlook projections, Mr. Mangesh.
We will take the next question from Dipen Sheth.
So I was just wondering if I'm making a mistake in something I might have heard earlier. You're shooting for what kind of volumes in this financial year?
5 million, sir.
And you've done what about -- so that's about 50 lakh tonnes versus the 36-odd that you've done in the FY '22?
Yes, sir. Yes, sir.
Okay. Okay. And you're going to do this at a time when costs are skyrocketed and the demand outlook is lukewarm, it's not red hot?
Yes. Mr. Dipen Sheth see from some 80,000 tonnes that we have done from these 2 ramped up assets for the new assets, we are expecting a 1.4 million tonnes. So we are not trying to squeeze any new volumes into the existing markets. And nor are we trying to disturb any of them. At the best, we will be displacing some of those material which is coming from far off into the markets that we are going to service.
Okay. Okay. So maybe you'll do well there. And the other thing on your balance sheet structure. So you've raised money at 12% for acquisition, INR 300-odd crores?
INR 500 crores.
INR 500-odd crores. And you're sitting on the cash right now?
Yes, sir.
You raised this sometime in November, right?
December sir.
December. Okay. Okay. So this is what shows up as investments on your consolidated balance sheet, about INR 300-odd crores?
Yes sir.
Some of this and the cash and all of that. And you funded this at 12%. And I'm sure you're not getting a 12% yield or whatever investing you're doing right now?
It's an acquisition. So rig now, we obviously would not get the yields proportion to 12%. This is -- yes, right now, the parking is happening at a very, very low kind of yields. This is a very strategic investment. So the yields are not likely to happen. It's more an acquisition that we expect the yields to happen.
We are not doing any treasury management at this point of time.
No, no. I'm okay with that, sir. The question I'm asking is that it's okay that the acquisition might be very lucrative. And for a short while, you will get low yields on your deployment.
Yes, sir. You are correct sir. You are correct.
But in that case, I would hope that the deal is pretty much sealed. I'm not sure I'm not very familiar with the company, but I'm not sure if there is a public announcement to that effect. And even if you haven't made such an announcement, can I take it as a given that it's in the pipe?
It is definitely in pipeline, sir. In fact, we have 2 choices. I would not say if they were to fund up, obviously, would have come back to the market to announce. The possibility of these deals happening is very, very likely, sir.
And again, I don't want to sound nasty here, but to acquire these assets with money borrowed at 12% makes sense to us?
Yes, it makes sense to us, sir. Historically, we have never made wrong judgment on our acquisitions, so...
Okay. And just one bookkeeping question on the balance sheet. On the asset side, on the consolidated balance sheet, the last items for both noncurrent assets and current assets, have increased materially over the year. So if you look at under noncurrent, Item I, other noncurrent assets that are INR 135 crores. And under current assets, Item C, other current assets at INR 217 crores, which is more than doubled. So can you just share some color on what these items might cover?
Yes, 1 minute, sir. Yes, Mr. Dipen can we revert to you with detailed explanation on this offline, if it is okay with you?
Sure. Sure, sure. I'll put my e-mail ID and telephone number in the chatbox.
The next question is from Sanjay Nandi.
So just to mention like there have been a cost escalation of INR 40 to INR 50 buyback on a Y-o-Y basis. Am I right, sir?
Yes, sir.
So can you just quantify like what is the escalation that happened on a Q-o-Q basis, like from the exit of March quarter in terms of cost per bag so that we can just measure it out like what kind of pricing we have taken?
Sanjay, we have not done for the per bag, but we would revert to you, we would be happy to share that number.
Okay. And the second question is like that, sir, we are just thinking of doing some acquisitions. Can you just quantify the number, like what kind of size we are thinking of? Or is there any...
Kindly bear with us. We are not very far. I think by either end of Q2 or early part of Q3. We'll be very happy to share all the details with you.
The next question is from Madhu Babu.
Yes. Sir, just 1 question, sir. The peak season is like passing without a good tailwind for us because price hikes are not up for the month. And again, from maybe June, July, monsoon will start. So how do you see overall pricing sir? Is it still possible to raise pricing even if monsoon comes and or because the first half has not been that good?
Historically, there has never been a correlation between price to demand with the season. But we do think the first half probably still could be a challenging kind of thing for us to do anything. As we are halfway through Q1, which is supposed to be one of the best quarters. So we are halfway through. So price increase happened, but not to a stage and scale that industry was looking for or the pass-through to happen.
So we are still left with another month and half in the current quarter. And probably a month of good listing even into the Q2, I'm hopeful, but still the outlook that we internally have factored is that it could be a flattish kind of half -- first half without any major kind of changes is what we look at. From here on, an increase probably potentially could be passed through, recovery would take some time.
But you're hopeful that even in monsoon price hike can happen, I mean like maybe July?
We have seen that it has no correlation in the past. So there were times when the monsoon season prices actually moved up because the volume was shrinking. So we have seen in the past, so it can be ruled out on that particular front.
And another thing, sir, that acquisition target. So has the valuation expectation moderated for that target entity because of the current repo rate?
It doesn't change in the short term, sir. It doesn't change on the short term. It's too soon. There are 2 our targets that we are looking at it. It helps when the market is under pressure, but it may not significantly alter the valuation. The valuation itself is very far.
Shantanu [ Kundu ], please go ahead with your question. Shantanu you may please unmute your line and go ahead with your question. Your line is not audible, Shantanu. May be request Shravan Shah to go ahead with his question.
Sir, trade, sir, what was the number for fourth quarter?
You're looking at the trade and non-trade shares? Or what is it that you are looking at?
Yes, yes, yes. Trade, non-trade, sir.
See, typically, we have always been around 65% to 70% trade, sir. Nontrade keeps expanding based on the government demand. So Q4, we were close to around 65% trade.
Okay. And then sir, blending, this quarter has come down from 50% to 46-odd percent. So now with both the new plants, so will this...
Our outlook for the current year on the blending is 60% blended and 40% OPC, Sir. I think this is purely possible because of the ramp-up of the new capacities. And these 2 capacities are in the markets where they demand cement, blended cement is in higher demand.
Okay. And just to -- I understand our CapEx definitely would be much, much lower for this year, but just trying to get a number, any number you want to throw?
INR 30 crores is the operational CapEx that we have kept for the current year, sir.
Okay. And sir, we were previously thinking in terms of the WHRS at Gudipadu, but we haven't decided it has...
It takes time. Currently, it is work in progress. So it is definitely not new for the current year. If any changes would happen, we will be very happy to come back to you.
Okay. And sir, currently -- or maybe the fourth quarter and currently in terms of the gap between trade, nontrade price would be how much?
That, I cannot comment for the market. In our case, the gap is very, very small, sir. So we generally don't chase the nontrade orders as aggressively. So for us, the gap between trade and nontrade is very, very limited. It is internally the gap that we have kept is INR 50 a bag, it cannot go beyond in our case.
Okay. And sir, broadly, whatever the diesel price hike which has happened and you were also mentioning that our inward, outward freight. So how do you -- we see the -- it would be inching up on per tonne basis for this quarter? Can it be 5% plus kind of thing? Because...
I wish I could give you an answer in a very straight fashion. We are too late sir because that's one which has been going on forever. Just to give you an update, the diesel price alone moved -- yes, it moved by 30% from whole of last year. Yes, it is -- it has moved only -- moved by almost 10% from March to April. And from April to May, we are yet to track sir. So it's something which is a challenging kind of an input number. We would be very happy to share offline on the impact of diesel on a per bag to what has happened in the past, the influence of diesel on the overall kind of...
But broadly, whatever the price hike which has -- diesel price hike which has happened in the last 1 to 2 months, have entirely been passed on to the...
Shravan, see, cost as I mentioned realization moved up by only 2% to 3% Cost stood at by 28%. So...
Sir, I'm not trying to understand in terms of the realization, I'm trying to understand in terms of the passing on to the freight operator through which we use?
Trade operator would not operate it at loss, sir. It's probably at the best he will take it for a month. But after that, you need to come back and update him. In our case, the service providers definitely -- it's an agreement. So it's a cost plus kind of a function sir. So that gets passed on fairly quickly. They don't take any load on that.
This question is from Mr. Shantanu Kundu . The question is about raw material cost reduction in Q4. What are the reasons for that?
Sir it is very simple. The blending reduced, so the matching raw material costs have come down. But for that there is no other...
[Operator Instructions] Sir a couple of questions from my side. Firstly, on the ramp-up of Satguru, how are things moving there in terms of placement, in terms of -- how are you placed in terms of category over there? And how are the volumes picking up?
We don't believe in category, Manish. So it would be a challenge for us to say that. But from the market leader, the delta is anywhere between INR 10 to INR 15, sir. The positioning is very firm. So we did not digest from the initial addition that we have done. That we will not compromise on volumes but not the realization, that actually helped us position well. The ramp-up right now, it is operating close to around 60%. We are more than hopeful by end of this year.
For the full year, we might be close to 80% as indicated.
And the same for the Odisha plant?
No, Odisha plant has just started. So it's too soon for us to take any call. We will be very happy by end of this quarter, we should be in a better situation to comment on the ramp-up. From a position perspective, we are not new to the market. We have always been a strong D player there. So we remain there. Some of the markets which we are servicing from with a higher lead distance, actually, here we are selling on that.
And my second question was on tie-up of coal. So you mentioned you have 4, 4.5 tonnes of inventory. I mean this is both locked in terms of price and volume?
No, typical [ FSA ] only gets locked in with the quantity sir not with the price okay? So we are locked in for the full requirement of around 6 lakh tonnes from Singareni. So there is no lock-in for the price, sir. There is a commitment for the quantity. The only issue is the next couple of months, it would be a challenge to get material from them.
Obviously, their priority is to go into the point of time. But for that, we would have actually gone back to the 6 months inventory here. So we are good, even though there is -- there could be some delays in the deliveries. But we do have inventory on. But the commitment is literally at 70%. At a consol level, we have the full commitment of the domestic coal.
Got it. So sir, does that mean that with the peak power demand going down starting June, July, we might see those supplies...
Yes, sir. Once the supply restores, sir, we are more than hopeful. And we will be going back to the 6 months kind of an inventory where the control on the coal price can be at least projected at least for 1 to 2 quarters firmly going forward sir. Once the peak season is gone. Because we believe that it should be on the ground for us to have control. So right now, we are only sitting on 4.5 months kind of an inventory. Once this -- this might come down a bit over the next month, 1.5 months. But would go back by the monsoon time for us to go back to the 6 months kind of a market.
[Operator Instructions] Shravan, you may please go ahead.
Yes. Sir, lastly, on the Premji Invest trust that invested in our company, your thought in terms of how they will help us in terms of overall strategically improving our business plan, our business model, performance or anything, whatever you want to highlight?
I think the size and the quality of the management that they have would obviously -- we strongly believe that the processes and all that we are doing will get enhanced with their additional experience and the capabilities that they have. Very specific to business in terms the ability to increase the sale account. It might, but it's too soon for us to take a call on that. But for sure, on the help on the overall kind of business process implement, we strongly think that their contribution from their inputs and everything could be of a phenomenal value for us.
That was the last question. If you have any closing comments?
Yes. Thank you. We would once again like to thank each one of you for joining on the call. I hope you got all the answers you were looking for. Please feel free to connect with our team at Sagar Cements or at CDR, should you need any further information. If you have any further queries, we would be more than happy to discuss them with you. We would be -- we would definitely be sharing all the information which we told that we would be sharing offline. Thank you again and have a good day. Thank you.
Thank you. You may now disconnect.
Thank you, Manish.
Thank you.