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Star Cement Ltd
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Ladies and gentlemen, good day, and welcome to Star Cement Limited Q1 FY '23 Earnings Conference Call hosted by HDFC Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rajesh Kumar Ravi from HDFC Securities. Thank you, and over to you, sir.
Hi, everyone. Good afternoon. On behalf of HDFC Securities, we welcome you all to the earnings conference call of Q1 FY '23 of Star Cement. From the management we have Mr. Tushar Bhajanka; member Promoter Group and [ Deputy ] Director; and Mr. Manoj Agarwal, Chief Financial Officer of the company. I now hand over the call to the management for the opening remarks, after which I will start with Q&A. Over to you, sir.
Good evening all. My name is Tushar Bhajanka. I'm one of the Executive Directors at Star Cement. I would like to welcome you all to the earnings call of quarter 1. I have Mr. Manoj Agarwal who is the CFO of the company. He will take you through the numbers of quarter 1. After that, we'll be able to have a Q&A session and answer the call.
Yes. Hi, friends. Very good evening. On behalf of the Star Cement Limited, welcome you to our quarter call for discussing our number of Q1 FY '23. I'd like to clarify that we are discussing on the historical numbers, and there's no invitation to invest.
Having said that now, I will just take you through the Q1 number. Starting from clinker production. During the quarter ended June '22, we had produced 6.92 lakhs ton of clinker as against 4.30 lakh ton same quarter last year.
So far as cement production is concerned, we have produced 9.90 lakh ton this quarter as against 7.72 lakh ton same quarter last year. Last year, we have taken a shutdown in our main clinker, that is why clinker production was lower.
Now I will take you through sales volume. The quarter we have shown 9.80 lakh ton of cement and negligible quantity of clinker as against 7.60 lakh ton of cement increases around 29%. This is as far as cement and clinker sale is concerned.
As far as geographical distribution of cement is concerned, in Northeast, we have shown around 6.48 lakh ton as against 6.03 lakh ton during the same quarter last year, that is a growth of 8%. And as far as outside of Northeast is concerned, we have sold 3.32 lakh ton of cement this quarter as against 1.58 lakh ton same quarter last year, around -- we have doubled the number.
In terms of brand mix, it is almost 11% of OPC and rest is PPC. These are the qualitative numbers of the quarter.
Now I will take you through the financials. The total revenue figure this quarter is around INR 665 crores as against INR 511 crores same period last year. As far as EBITDA is concerned. This quarter, we have done an EBITDA of around INR 138 crores as against INR 101 crores last year.
That is almost same at the level of INR [ 158 ] crores in this quarter and the corresponding previous quarter. This year, a hold of increased tax expenses due to the concept of tax exemption created in respect of our company's [indiscernible] annually and its subsidiaries of Star Cement Limited. However, the cash outflow will be net only.
On [indiscernible] brand, it is [ 1,400 ] sales during this quarter has again [ 1,330 per ton ] same quarter last year. This is what our quarterly numbers out.
Now I request all of you, I give you -- if you have any queries you can ask the same, and I will request Rajesh to moderate the query where that is required.
[Operator Instructions] The first question is from the line of Shravan Shah from Dolat Capital.
Congratulation on good set of numbers. So first couple of data points in terms of the trades, how much for this quarter?
So trade sale was about 86% of the overall volumes that we did. And you -- and overall, we did about 9.8 lakh tons and 14% was the non-trade sales.
Okay. And what was the lead distance?
Shravan may I request [indiscernible] please.
230.
Sorry?
230. 2-3-0.
2-3-0. Okay. So it has marginally increased from the last quarter of 2018 or 2020. Sir, now in terms of the first coming on volume, so last time, we guided around 4 million ton volume for this year. So we have already done kind of 1 million ton. So that target remains.
;
Yes. So even internally, we are meeting the target that we have set for the first quarter, and we are in line to meet the overall target of $4 million by year-end. Yes.
Okay. Okay. And regarding the Siliguri utilization for this quarter, how much was the utilization for Siliguri?
So the utilization was about 67% for Siliguri.
Okay. So for full year, then we can easily do a 65% kind of a utilization?
So what we have basically seen in Siliguri that quarter 4 of last year should have been better historically than quarter 1. But our volume in Siliguri has remained constant between quarter 4 of last year, quarter 1 because we are really working on a dealer network at the moment. So my expectation would be that, yes, the utilization overall should be about 55% to 70% on a year-round level.
Okay. now, sir, on the pricing front and then I will ask on the costing. So pricing post June, how much price decline have we seen in the month of July and August?
So I mean if we divide it between outside Northeast and Northeast. In Northeast, we haven't seen a very big decline in the prices as such. So the prices are more or less in sales, and that is mainly because of the higher fuel cost as the other players in Northeast are facing that the prices having fallen. And I've said Northeast because of the competitive scenario, the prices have dip by about INR 20 to INR 25 per barrel. So that is broadly the pricing.
So both in Bihar and West Bengal same INR 20 INR 25 kind of decline?
So it's similar in both the state.
.
Yes. And now on the costing front, so it should break that for the entire quarter, we haven't seen any increase in terms of the overall OpEx per ton. So how do we see particularly on the power and fuel also and the entire costing now how do we see? And are we having any action in terms of the coal supply from the Coal India?
Yes. So I mean there are a couple of reasons why cost per ton has in feeding fees. One is that we, of course, diversified our fuel mix. So like we discussed last time, we have gotten into AFRs. We've been using bambo. We have also gotten into -- right now, we're looking at other options like [indiscernible]. We have our FSA agreement.
We are buying right now, coal from Netherlands. So we have actually explored many other areas through which we can -- towards fuel and that is what is helping us limit the extent of increase in our cost. And secondly, we have, of course, also optimized on our plant performance. So we have reduced our clinker factor, optimized into just maintain the same policy.
So I mean, with all those changes, there has been a positive movement towards the cost. And that's probably the reason why the costs are increasing, and we believe that in the next 9 months, the trajectory should be the same. So I do not see the cost increasing by much. Of course, the fuel cost may increase by about 10% which is very unforeseen, so I can't comment about that. But generally, I will not think cost should increase.
So this 10% we mainly expect this quarter, second quarter increase in the fuel?
No, that may be in the third or the fourth, and the second, I do not foresee any significant increase to what we have performed in the quarter 1. But I cannot comment because it's such an uncertain time, especially for fuel that I won't be able to comment about the third and fourth quarter. But in the second quarter, at least right now, I do not see any key difference.
Okay. Lastly, on the, sir, expansion that MTPA clinker and 2 MTPA grinding at Meghalaya and Guwahati. So last time, you said that the construction will start by June. So what's the status? And in terms of the overall CapEx and the date front, what's the status, how much used plant and what's the revised number for the full year? And yes, that's it.
So I mean the thesis in the last call, we had discussed about the environmental clearance and how we're going to receive it. So now we've actually gotten the environment clearence for 50 million tonnes. So -- and we have already started some of the civil work at the site, and we will take up the civil work more aggressively when the rain stops because there's also heavy monsoon in Northeast.
So effectively, we'll be starting full fledge construction by this month. And in terms of the CapEx outlay. Right now, we placed the order for most of the machinery. We have finalized the contractors. We have a start-up procurement securing some of the [indiscernible]. And right now, the cases outlay would not be that much because we are just paying the guarantees to other suppliers right now. But I think in the next month or 2, the CapEx outlay would start.
So last time, you said around INR 1,000-odd crores this year and the next year also INR 1,000-odd crores. So in this quarter, how much we have already spent and how much now we expect.
So I mean until now, we would have [indiscernible] present [indiscernible] because right now, we have just paid the first installment for the machinery suppliers and to the contractors. So -- but in -- our estimate remains the same that in this financial year, we'll be spending about INR 1,000 crores. And in the next financial year, we'll be again spending about INR 1,000 crores.
And this is not only just for the 1 -- 3 million ton clinker plant and 2 million ton grinding units. It also include the second grinding unit at [indiscernible] . So this INR 2,000 crore CapEx is basically for a 3 million ton clinker plant and 2 grinding units of 2 million ton each.
Sorry, I missed the number. How much we spent in the first quarter, sir?
We would have spent more than INR 50 crores in the first quarter because we have just been paying the installment, the first installment for the machinery and to the contractors. But going ahead in the coming quarter and the quarter after that, we'll see a lot of outlet happening. The target remains to be the same as what we had discussed last time that in this year, there'll be an outlay of about INR 1,000 crores.
Okay. And in terms of the COD for the both clinker and the 2 grinding, what's the COD. And what's the net debt now?
So we are aiming to commission the plant by -- so the clinker plant should be coming by December next year and the grinding unit should be coming by about January next year. The grinding unit is -- by January 24 next year, next to next year. So that is our time line for these 2 plants and the blending unit filter should be coming above March of 2024.
Okay. And last one, the net debt. What's the number as of June?
Pardon, which number?
Net debt.
Net debt. That is 0. We do -- no debt.
Sorry, net cash, sorry.
Yes. Net cash is around INR 750 crores.
[Operator Instructions] the next question is from [indiscernible] Centra Advisors.
My question is on fuel mix, what is our fuel mix for the quarter.
So majority of our fuel mix is basically coming from FSA, and that would be about 65%. And then rest about 15% to 20% is coming from Netherland coal which is a new coal that we take from Netherlands. And about 10% to 15% of the AFR.
And what is your inventory days for [indiscernible].
Inventory days for [ fuel ]. Now [indiscernible]. So it is about 20 to 25 days.
[Operator Instructions]
The next question is from the line of Rajesh Kumar Ravi from HDFC Securities.
This quarter, number has been really strong. What we see all the industry really in the cost pressure. Your costs are almost stable on year-on-year on a sequential basis. So could you give some -- in terms of power clinkers, what was the cost you have seen in the June quarter and what -- how it has moved towards the march quarter.
So I think the per kilocal fuel cost that we faced was about 1.75. And if you compare it to past quarter, I think it was about 1.55% to 1.6%. So our fuel cost has increased by about roughly 10%. So that is, of course, been there.
And one of the saving cases for us has been, of course, the FSA contract that we made last year, early last year, so that was at about INR 1.5 or INR 1.45 per GCV and because we made a very major contract then, so that is also something which is hedging us against the increase in the fuel cost for this entire industry.
Okay. And in this quarter, Q2 or the cost is flattish at 1.75 in the current quarter?
Yes. I think there's no reason to expect anything.
And you mentioned that you see onwards, there will be an increase in the costing because most of your FSA volume will be invested.
Actually, we have a 5-year FSA contract. So what I meant to say was not that the Q3 and Q4, the costing will be higher. What I meant to say was that I cannot predict how the coal is going to go because we are still exposed to outside coal, right?
Percentage of ours is still buying from auction and the export options in APL and imported coal, right? So that is cause that still remains. So I can't vouch for how that behaves.
And do you see any positive development on the [indiscernible] sale, which we are supposed to [indiscernible] also.
Yes. So there is actually an auction tomorrow for that and we will be participating. The volume is, of course, very less. It is about 35,000 or 38,000 ton. That, of course, is actually going to participate in the auction to win as much as we can. It can maintain our rates.
Okay. And the 2 grinding unit, one you mentioned is in [ Siliguri ], the second one is in?
So 1 grinding unit is in Guwahati, next to our current vending units. So it's a brownfield expansion and the other one is coming in [indiscernible] and that will be a 1 million tonne branding capacity with the railway side.
And any update on the rest of the [indiscernible] projects?
Yes. So last time when we had spoken, there was -- it is broadly in time, it was supposed to come in december, and we are expecting it about end of October also the demand because the -- in the middle, there was an increase in the steel prices and then some vendors started to re-bargain.
So because of that, there were some delays in rendering and there are also other things. But now I think that's all in the process and we should be commencing the plant in October this year.
Okay, great. And on the new project, what sort of WHR and is this INR 2,000 crores CapEx in that WHR cost?
Yes. So the CapEx cost is actually factored in already. That's factored already in the cost of WHRS. So that's already included. We'll be going for about 12 megawatts WHRS.
Next question is from the line of Uttam Kumar Srimal from Axis Securities.
Sir, my question was the branding unit in [indiscernible]. So have you identified that location for that?
Yes. So we have identified the location for it. We are also in the process of finalizing the land. So I think in this month, we'll be paying the advances for the land and finalizing the registering land. So we are at a very advanced pace in terms of finalizing the location and the land. So that's already going on. It won't be right on my part to flow the exact location because that will be counterproductive for us, but we have already identified.
Okay. And sir, this branding unit will be in operation by January '24, as you said.
No. So the branding unit that I was talking about was the branding unit at Guwahati that should be commencing December to January 2024. The unit in [indiscernible] should be coming about March of 2024 or March to April in '24.
And the utilization Unit?
Utilization should be coming in December next year. December...
'23?
Yes.
Yes. Yes. Okay. And sir, how has been on sale of premium savings, what progress have made in terms of [indiscernible].
So the ARC sales, so I mean, we have 3 products, mainly we have the PPC, OPC and the ARC, which is the -- which is our premium cement. So till April, the sale of ARnC was about 3.5% to 4%, which is very less. But now we actually start working on increasing the sales of ARC.
And the number I can give you is that in June, our sale of ARC was about 8% because we have some of the many schemes and ventures to promote our premium cement. And our target is that by the end of next quarter, we should be targeting at about 10% sales of our premium cement.
Okay. And sir, what is the price difference between normal cement and the premium cement.
The price difference is about -- it's about INR 20 per barrel. So that's about INR 400 per ton. And then the margin that we -- of course, we are right now promoting it. So some of the margin is actually going in promoting the more premium cements, but once it stabilizes, our aim to earn about INR 150 to INR 200 extra on the premium cement.
So this quarter, we have seen EBITDA margin over 18.6%. So can EBITDA margin be tested for the next 3 quarters?
I mean -- I think these margins in the first quarter was higher because the prices were higher, the volumes were good and cement industry where second and third quarter are usually not as good as the first and the fourth quarter.
So you know we may expect some decline in the margins, not because of the cost pressure, but just how the numbers work and how the seasonality affects the business. And in the fourth quarter, I would expect the margin to again pick up. So yes. So because I think the prices drop -- the price is dropping in outside Northeast. So because of that, of course, there's a margin fee which happens.
And sir, any [ sites ] that we have received this quarter to last quarter, we were be [ INR 11.37 crores ]. And any subsidy recieved in this quarter?
We have achieved INR 32 crores of trade subsidiary, which we are outstanding for early invest and also received the GST because we are online because last quarter to last quarter, we have already received. So there is no such outstanding from the -- for our own subsidiary side.
Next question is from the line of Shravan Shah from Dolat Capital.
Yes. Sir, just a clarification. Last time, I think you mentioned that this 5-year of fixed price contracts that we have for coal, is that 1.35 KKL and now you mentioned 1.45 or 1.5. Is it right?
So I mean, it is about one point -- that's the landed price and the landed price is about 1.4 to 1.45 , it really depends on the rigs right now because we're not getting the rigs. There's a rig's availability problem. So the mandnate cost is a bit higher because we have to pay higher for the rig.
But that time, the rig price may have been lower, so the logistics cost was a little cheaper. So I think it just depends that [ INR 0.10 ] is actually a difference in the logistics costs mainly.
Okay. Okay. Second sir, last time, you mentioned that there were truck availability issues. Now has been sorted out? Or is still we are facing some issues?
No. So I think the truck availability issues were primarily because of 2 main reasons. One was that, of course, fourth quarter in terms of volume was the first time you were needing such a large volume because of Siliguri. And the -- and we were not active then. But now, of course, with the experience of dealing that kind of volume of preparedness and our pretrain for handling that kind of volume as in field.
And also the volumes this quarter were lower. So the pressure on logistics was also much lower. So this quarter, we do not face any problems in logistics whatsoever, and we are making our -- so right now, we have a railway siding, which is commissioned in Siliguri. So that will also help us take care of some of the logistic problems in terms of clinker and cement dispatch. So I think going forward, I don't think that we'll be having the clinker same as we did in quarter 4.
Okay. Okay. And the other question is the tax rate, so now this 35%, 36% tax rate for full year is the normal that we will see or for the full year, how do we see the tax rate.
No, the tax rate will be 34%, 35% approximately will be there because the actual cost outflow will be met fully because we have more than INR 30 crore to INR 40 crore of [indiscernible]. So actual CapEx will be only the match. But that's where the betting tax rate for real profile it will 35%.
Okay. Okay. Okay. Got it. Got it. And just to clarify, the ongoing WHRS is 12.3 megawatts that will be started by October and then the new clinker will have another 12 megawatts of WHRS.
Yes. And I just want to, again, emphasize on the point that you mentioned, that, of course, our income tax exemption got over this quarter. So that's why you can see in the books that we are paying about 35% of tax. But that is adjusted for the next few years, it will be adjusted from the cash that has been accumulated in the company.
So from a cash outlook perspective, that is not affecting us, but of course, from an accrual perspective on which we make the books, it is, of course, showing a lower amount.
Okay. Okay. Okay. And in terms of the other expenses it has because a decline on Q-o-Q basis. So this INR 80 crore, INR 90-odd crores quarterly run rate is the approximate number.
Maybe here 1 to 4 here -- because we have certain expenses in March, there are certain other expenses items are there. So it may be 1 to 4, quarter to quarter, per quarter may vary, but between largely a much larger impact.
Yes. So I think it is really when the cement costing would really depend on the volume that we do right now, even in the second quarter, we do seem to be doing good volumes. And if that continues, then yes, the costing will be in control. So I think, yes, you should -- we are also targeting a similar kind of EBITDA year round. So yes, we should be hopeful of meeting -- of maintaining the traffic volume.
Okay. And sir, as you mentioned, we have INR 750-odd crore kind of a cash and INR 2,000 crores kind of a CapEx, you get in 2 years, '22, '24. So how do we see in terms of the -- this net cash coming into the mid date by FY '24?
So we, of course, have to go with adjusting cash ourselves. And in 2 years, the situation would be that we have about INR 1,500-odd crores as cash reserve, which we'll, of course, plow in the CapEx plan.
And we may need a debt of about INR 500-odd crores, which will -- which we will pay a ton as our plants get commissioned. So there'll be no long-term borrowing that we're looking at, which may be looking at a year or 2 borrowing to help us in this security situation.
The next question is from the line of Rati Kumar from Jefferies India.
My first question is on your coal inventory. So you still been like in 1.5 months to inventory. So this has particularly gone down because of fuel price impact or is something which we are looking to have like going forward of 25 days which you mentioned.
So I mean, IB of course, we would -- we have been able to maintain about 2 months, 1.5 to 2 months inventory, and that is why we were able to absorb some of the cost increases in the fuel. But right now, we are having some issues in terms of rig availability because most of the rigs have been diverted to the power plant by the government. So because of that, our inventory is falling short to about 25 days, but we are working with the railways to improve the availability of rig. And with that, I expect you to go back to about 1 month or -- 1 month that is kind of an inventory.
Secondly, can we talk about the volumes of [indiscernible] for the year. We used to have 75%, 25% mix for [indiscernible] only, which has now gone down to 66% in this quarter. But would be this number for like, let's say, FY '23 the 65% is like...
So we are expecting about 65, 35 kind of a ratio for the entire year broadly.
Okay. Right. Okay. Next on net debt, like while you mentioned this in previous response, what's the peak net debt related to this project expansion, we should expect that INR 500 crores.
Yes. INR 500 crores to INR 550 crores range. It should not be going more than that.
Okay. And for the overall cost -- the project cost for, let's say, 3 million tons clinker andd 4 million ton planning plus 10 megawatts for WHR. What is the total project cost which we have? Is it INR 2,000 crores or is it...
It is slightly more than INR 2,000 crores, it's about INR 2,000 crores to INR 2,100 crores. It will range between that. And it just depends on the cost of putting up [indiscernible] . So our estimate is about INR 400 crores for [indiscernible]. But if it exceeds because of the railway siding and because of the spilling of the land, in that case, moving go to about INR 450 crores. So because of that, there may be a variability from INR 2,000 crores to about INR 2,100 crores.
Okay. As because earlier we use to give data for INR 1,000 crores for cement and clinker. So we are adding [ INR 4 million ] for another INR 1,000 crores.
Yes. So I think the clinker with the WHRS. At the moment, it's not going to cost you lower than INR 1,200 crores. So that may be a data point, which may be 4, 5 years or 3, 4 years back. But given the increase in the steel prices, I know it has come down now, but it's still higher than what it was a year or 2 back. So I mean, given the increase in steel prices and just inflation, I don't think anyone will be able to set up a plant below [ 1,200 ] even in our brownfield expansion.
So when we say we have already put in orders for CapEx. So you would have ordered that in March or like after the recent monetization in mix?
Sorry, can you repeat the question?
When you say we have already put in orders for CapEx, et cetera. So would that be like the fixed cost of market cement and other commodities? Or would that be like closer to like last month and [indiscernible] 6 month.
In terms of the external then starting, we order the mill, the pyro and other major equipments for the clinker plant, and we have come in a good time frame. So it hasn't really face the front of the higher steel prices ourselves. But there's also a lot of field for fabrication and for other perfection that we need.
And there we see that our costs have, of course, increased compared to what it could have been a year back or 1.5 years back. From that point of view and also from a civil contracting point of view, the costs have run up in the industry. So that's why I was just saying that I don't think the 3 million-ton plant would be possible in about INR 1,000 crores. It will probably deploy about INR 1,200 crores to put that kind of plant.
And lastly, on selling prices, you said that INR 20 to INR 25 is correct and [ reliable ]. How do they stack up versus March prices?
Sorry, can you repeat the question?
So you said prices have corrected by INR 20 INR 25 in July, August how do prices back up versus March of this year?
So in March, for example, in Bihar, the prices were about 400. And as on date, the prices are about INR 370. So if you compare it to March, then the prices have fallen by about INR 30.
Okay. So basically, a whole of the hike of Q1 is like wiped off and there's another INR 30 outcome there?
Yes. Yes. I mean only in -- no, I mean...
I think you -- so this 400 was in April. I think you were mentioning about the price after the increase which happened. Is it?
Yes, yes. So I think the -- this is from April. And, yes, this is from April. And this is only in Bihar this is not in Northeast. And Northeast, what I can see is that the prices have more or less remained stable. It would actually increase if you compare it to March and the prices I think is at INR 10 for March.
So for Bihar and West Bengal price of March will be similar to prices today. Is that right?
No, the prices of March would be about INR 20 higher than the prices today. The prices are followed in December in Bihar.
The next question is from the line of Mangesh Nirmal Bang.
Congratulations on good set of numbers. Sir, couple of questions from my side. Firstly, I just wanted to understand the competitive intensity in North East. So with Eastern prices coming off any new capacity coming into that region, do you expect more inflows in Northeast given the pricing that is prevailing there, that's the first question.
And the second question is we are adding a very large capacity in Northeast, which is 4 million tons. And we've been present in Northeast for much longer. And still, we are doing close to 2.1 million, 2.2 million tons of volumes there.
So what gives us the confidence that this added capacity, with existing capacity operating, let's say, 60% utilization we would be able to ramp up those plants and penetrate the new market? Because I think for this new capacity, you'll have to gain market share substantially from others. So these 2 questions can answer, please.
Of course. So I mean to answer the first question, within Northeast, most of the players are running full capacity. So there is actually -- and that is the reason why there may be some inflow from outside Northeast. Outside Northeast, I do not expect them to send them to Northeast now because the cost of production for them have increased, so earlier they used to operate on a variable basis. There's a continuation basis.
They have to basically done in Northeast. But now because the cost of production has increased, I don't think it is viable for them to come, and that has also been clearly shown in the data. So if we look at the June arrival from outside, we can see that the sharp decline compared to last year.
So I think that is not a threat. Of course, about the utilization, last year, we did about 2.5 million tons in Northeast. And that is after we have really cut down on the nontrade. Because we are not trying to promote ourselves too much in the nontrade. So once the plan comes, of course, we are going to be aggressive in nontrade and there was a lot of garment infrastructure projects, which require us to which requires a lot of OPC and nontrade.
Right now, our assets are not in nontrade, once the plan comes, we will, of course, get into nontrade because nontrade also has a margin of about INR 800 per ton, which we should not be missing. So from that perspective, the utilization would partially be fulfilled for the new clinker plant and the new branding unit from nontrade.
Okay. And are you confident of running that at 60% utilizing activities within 1 or 2 years?
Yes, yes, yes. We are.
And sir, also wanted to understand on the existing plant in terms of what kind of growth rate that you expect for the next 2 years? If you can specify in Northeast and East. Even if you can mention about the industry growth rate that you expect or what you are targeting, that would be helpful.
Just to give you an idea, let's just talk about this quarter in any the market has grown by only 2%. And there's a lot of reasons because we were hit by a very damaging plus this time. So that is the reason why major markets like Assam have not grown at all and the overall Northeast growth of only 2%.
West Bengal, is the markets that we serve because West Bengal did not see that kind of growth last year and because it was COVID last year, which effected West Bengal and Bihar both, the market as just showing an improvement compared to last year. And it is showing a growth of about 25% for the quarter. And if you and that is also primarily because COVID was hitting the last year in '22.
So -- and yes. And then the same thing with Bihar, Bihar was same in terms of growth rates. I do not expect it to sustain, of course, but I would expect that volume in Bihar would grow about 10% odd this year. And our expectation of what our growth is. So in this quarter, when NE was doing 2% we did 8%.
So we are in line to generating an alpha to whatever the growth rate in the market is. So we do expect about 11%, 12% growth in NE. And similarly, in adjusting one in Bihar, we have grown significantly. So last year, same quarter, we have done about 1.6 lakh ton sale in West Bengal and Bihar. This quarter, we have done about 3.2 lakh ton. So we've actually doubled our sales in outside Northeast in the last 1 year. So I do expect our growth rate to be fast in outside Northeast.
Understood. Understood. So basically, for the full year '23, '24 or high teens growth can be expected over a high double-digit growth eat?
Yes, yes. And also, the growth is not unseen in the sense that in outside Northeast also, we have actually left the markets where it was not very profitable for us to sell.
So not an unseen growth where we do not look at the EBITDA per tonne or coming from those markets. This is a very sustainable growth and markets where we expect to receive decent EBITDA. So that could also help in the improving the bottom line and the margin Q-to-Q.
Understood. Sir, just last question. For the markets we serve in North Bengal, the landed cost of clinker for the other players and you, how much would be the difference?
So that, of course, we'll have to calculate. But my expectation right now is that we'll be cheaper by about INR 500 per ton.
The next question is from the line of Rajesh Kumar Ravi from HDFC Securities.
Yes. My question is, you mentioned that you [indiscernible] Siliguri volume, which is visible. Could you share what was the non-trade volume in Q4 percentage and in FY '22?
Q4, it is 70-30.
Okay. So 30% is now coming on to below 15%, right?
No. Coming from -- sorry, you're talking about -- sorry, you were talking about non-trades space. So 85-15, so it was 15%. So this quarter it has come to 14%. The step of reducing non-trade has just been taken a month back. For the quarter going ahead, you'll see a drastic fall in non-trade and it's coming down to about 8% to 7%.
At the same time, we see a drastic increase in the premium sales of premium products where we earn more margins ARC from about 3.5% to about 10%. So we are basically reducing our sales of nontrade, which is the lower margin product because of more clinker.
It is selling at a good price. And we are increasing the sales of the premium product. So you would see that the market -- the portfolio mix that the non-trade is losing the [indiscernible] sustained.
Agree. And just for full year FY '22, what was the non-trade revenue?
86-14.
86%. Okay. 14%. And coming to Siliguri performance, how is that in terms of EBITDA margin all the Siliguri and Northeast operations now, even we are now north of 60% utilization in the last 2 quarters.
So I mean Northeast is very hard to compare with the profit that we earn outside because Northeast is our main market and also the advantages compared to other players, which are taking from outside. So there is I suppose about INR 700 in Siliguri or INR 800 in Siliguri per ton then our margin would be higher.
So I think that may not be true fair comparison. Of course, we are working on reducing our costing of Siliguri that would add to the margin. And we have gotten the railway siding. We plan to get fly ash, get linkers in peak season and get other raw materials like gypsum through the railway, and that should also play in the improvement of the margin.
But I think comparing it to something like a Guwahati in our project will not be very fruitful because Siliguri will always be a secondary market that we are serving on top of what we currently serve.
So in terms of costing you considering the March revenue railway siding stop performing optimally in terms of on [indiscernible] and fuel sourcing, your costing will fall for Siliguri operation, you will be at par with the industry?
Yes. Yes. So that is what we are aiming at. Of course, costing of serving Siliguri market for any company will be very high. So all of them will be very high. So it's not that we are in a -- so we are anything against what the industry standard is in that sense. If we're probably earning as much as what [indiscernible]. But a number of the earning in these markets. It's just that we are trying to better ourselves and earn some more.
Okay. And 2 last questions. First, as you mentioned the cement prices will grow in Bihar. What would be the price in Assam on markets for you currently and you said that the prices have been normal post June right?
Yes. So I think I'm not like seeing any decrease in the prices in Northeast as of now. That is also a function of a lot of clinker, sorry, volume of cement, which was done from outside Northeast to Northeast is not happening.
So from seeing a decent price in Northeast. Of course, it may fall like it does in the second quarter. But right now, I'm not seeing any signs of that happening. Of course, the prices have fallen in West Bengal and Bihar that has fallen not only in the area that we serve in West Bengal and Bihar but overall as well. So I -- but I do not see much scope of prices falling too much because of the cost pressure.
Even if our cost increase or not increase, we can see other results of other companies and their costs have really increased. So I don't see -- to play around too much with the pricing.
Sure. So one last question. If I look at situation, the volume mix of Northeast for [indiscernible] because there will be around 20% volume decline versus March in Northeast, where the rising rate is higher.
Also domestic is flattish volumes quarter-on-quarter. So could you comment on this still with higher share of lower pricing lower sales in also Northeast our realization has sequentially jumped by 5%. Like-to-like what was the price increase seen in Northwest and also Northeast?
Sorry, could you repeat that again.
So I want to know, how has the prices quarter-on-quarter moved in your Northeast markets also in Northwest in Q1.
Okay. So compared to Q4 and Q1. The prices basically have remained stable probably increase a little probably in Northeast. And outside Northeast, I can see a INR 20 decline in the prices. So in West Bengal and Bihar, the prices have fallen by about suppose 5%. And in Northeast, the prices have increased by about INR 10. So that is about 3%.
No, you're talking about the July month.
I'm talking July...
June quarter.
June. I'm talking about the June quarter.
But how come our realization has a blended realization sequentially has improved by 5% quarter-on-quarter.
Look, you're talking about the Q4 number...
Q4 to Q1.
There is 1 thing that you have, other side thing that I have is also the margin so the price will increase from Jan to March. So if you take your weighted average or what the prices have been in the quarter 4 compared to what the weighted price in quarter 1, the weighted prices will, of course, show an increase.
This is -- so this is not a weighted average price of the quarter that I'm talking about. I'm talking about the price in the month of March compared to the prior in the month of June. So I think that is where the distance is being created. So if I take the raiway side of the entire quarter for quarter 4 and entire quarter of quarter 3 [indiscernible] increase.
Yes, I agree. Okay. I'll take that offline. One last question. Is there any big incentive booked in revenues this quarter? under revenues.
No, there is no cutting edge. I mean, the same kind of incentive what we have booked in the last quarter, the same, nothing new.
Okay. So March quarter and June quarter the inncentive number has not changed materially.
[Operator Instructions] Next question is from the line of [ Keshav ] from HDFC Securities.
Sir, I want to understand whether -- how has been your marketing expense in this month, advertisement in this quarter?
So I mean, like I had mentioned last time as well we are cutting on our planning expenditure which we've done that a lot in the last year. I will just take out the actual numbers -- so there is a decrease of around INR 2 crores in sales promotions and marketing expenses.
And in advertisement basically this quarter. And this number should be going down or the difference should be increasing even further going ahead, because there were some of the contracts that we had to renew this quarter, which the payment will not come in the next quarter. So because of that, you'll see a difference about 3 cr to 4 cr in the next -- in the quarter 2.
So what I remember last quarter you guided it was INR 45 crores for that quarter. And now onwards, you said it won't exceed INR 33 crores. So...
No, it was for the entire year, it was not for the quarter.
Yes, for the year. So...
So I mean -- yes...
Was it only INR 33 crores this year.
Yes. So it should be like this year, like right now in the quarter 1, the advertisement cost was about INR 11 crores. And that is also because we had to make some of the payments, which will help us in quarter 2 as well. So I do not expect the cost of advertisement going above INR 33 crores for the entire year.
Okay. Understood. And as you're now procuring the new store that is Netherland coal. So will it make change up in the upcoming quarter?
I'm sorry, can you repeat that?
With Netherland coal, which is 15% to 20% of the fuel mix, is it expected to increase in upcoming quarter?
No, I think it will broadly remain the same. So that's the amount of coal that we can get coal from Netherlands. So I think that will not fall in Q2 much..
I now hand the conference over to Mr. Rajesh Kumar Ravi for closing remarks.
Thank you everyone for being in the call. Tushar, do you want to make any closing comments?
No, thank you so much for arranging the call, and thank you, everyone, for joining. Is there any doubt outside this call as well, you can, of course, reach to our CFO, and then we are more than happy to answer any doubts or any queries that you may have. So happy to answer any questions outside the call, if there. Thank you.
Thank you very much. On behalf of HDFC Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.