Good afternoon, ladies and gentlemen. Welcome you to the 4Q FY23 and FY23 Results Conference Call of Sagar Cements Limited. We have with us from the management, Mr. Sreekanth Reddy, Joint Managing Director, Mr. K. Prasad, CFO, and Mr. Rajesh Singh, the Chief Marketing Officer. We will start today's session by opening remarks from the management. This will be followed by a Q&A session. I request all the participants to be on a mute only mode during the course of the call. 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, and thank you for the introduction. I would just like to point out 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 sent to you earlier. As always, we will start with Mr. Reddy's opening remarks, following which we will have an interactive Q&A session. I would now like to hand over to Mr. Reddy for his opening remarks. Over to you, Sreekanth. Thank you, Gavin. Give me a minute. Thank you. Thank you, Gavin. Good afternoon, everyone, and welcome to Sagar Cements' earnings call, to the quarter and year ended March 31, 2023. Let me begin the discussions with a brief overview of the markets in terms of demand and pricing, post which I will move on to Sagar specific developments. Overall, we have been, we have seen a good pickup in the volumes, for the sector in general, aided in part by steady demand from infrastructure projects and IHB segment. The volumes would have been even better, but for the unseasonal rain and the labor shortage on account of the festivals during the end of the quarter. Strong volumes have resulted in high operating leverage, which coupled with softening raw material prices, led to some improvement in operating profitability. Prices, though, have remained steady, and we are hopeful that the same would improve with time. On the whole, yeah, we remain optimistic about the sector's prospects, as we believe demand and pricing should improve on the back of government's infrastructure push, coupled with the demand from urban housing. Moving on to Sagar specific development. FY 2023 has been an eventful year for the company. A year wherein we achieved our stated objective of attaining 10 million capacity well before 2025, following the acquisition of Andhra Cements. We believe that this is a good addition to our portfolio, as it not only helps it solidify our presence in our core markets, but also helps in better serve our customers in a timely and cost-effective manner. Contrast that is to our two assets which we acquired earlier. That is Sagar Cements and Jajpur, which helped us in not only diversifying our geographic and product mix, but also facilitated entry into the faster-growing regions. Our efforts over the next few years will be directed towards improving the operational efficiencies and sweating these assets. Let me now move on to our quarterly performance. Our revenue for the quarter stood at INR 622 crores, as against INR 502 crores during the fourth quarter in the previous year, higher by 24% on a YOY basis, largely driven by volume following commission of new capacities. Infrastructure activities, along with the IHB segment I mentioned earlier, drove the demand resulting in higher offtake. Realizations though remained more or less steady. EBITDA for the quarter stood at INR 39 crore, as against INR 61 generated during Q4 FY22. Margin for the current period stood at 6% as against 12% reported during the corresponding period last year. While the margins have compressed on a year-on-year basis, the cooling off in raw material prices over the last few quarters bodes well for the business. Furthermore, we are hopeful that our investments towards strengthening our operational infrastructure in recent times by setting up WHRS railway siding, et cetera, should also help us improve the margin profile and trajectory over the coming years. Average power and fuel costs stood at INR 1,796 per ton, as against INR 1,596 per ton reported during Q4 FY 2023. Freight costs for the quarter stood at INR 834 per ton as against INR 776 per ton during Q4 FY 2022. On a sequential basis, as mentioned earlier, we have seen moderation in fuel and freight costs. Profit after tax for the quarter stood at INR 98 crore, as against loss of INR 19 crore reported during Q4 FY 2022. From an operational point of view, Mattampally plant operated at 73% utilization, while Gudipadu, Bayyavaram, Jeerabad, and Jajpur plants operated at 93%, 66%, 81%, and 14% respectively during the quarter. Overall capacity utilization at a group level is stood at 65%. As far as the key balance sheet items are concerned, the gross debt as on 31st March 2023 stood at INR 1,472 crore, out of which INR 1,277 crore is long-term debt, and the remaining constitutes the working capital. The net worth of the company on a consolidated basis as on 31st March 2023 stood at INR 1,689 crores. Net equity ratio stands at 0.76:1. Cash and bank balances were over INR 210 crores as on 31st March 2023. In summary, we believe that our efforts towards cost stabilization, better product mix, and presence across established, and fast-growing regions position us well to create value for our stakeholders. This concludes my opening remarks. We would now be glad to take any questions that you may have. Thank you. A reminder to all participants, you can ask your question by raise of hand in the participant tab of the Zoom platform. We will wait for a moment for the question queue. Mr. Keshav, you can go ahead please with your question. Hello. Hi sir. Thank you for the opportunity. Just wanted to know about Andhra update. How is it going? Is it as per the plan what you have said last time? Good morning, Mr. Keshav. Andhra, as mentioned in the previous call, we did operationalize the grinding side of Andhra Cements in the month of April itself. We could commission the mills and also start dispatches on 12th of April. The clinker line is due for commissioning in the middle of June, in the current quarter itself and we are more than hopeful that we should be a week before the stated time itself, Mr. Keshav. How has been your trade share in this quarter, and how has been your regional mix for FY 23? Yeah. This quarter I think we more or less remained very similar to how it was in the previous quarter. Though we pushed ourselves slightly away from some of the markets during the fag end of last quarter, because for the first time we have seen Deep South prices much lower than the North or South prices. Having said that, still we had a robust growth during the full year. We could have done something more even during the end of Q4, but for the unseasonal rain and as well as the kind of pricing regime that was existing in the Deep South pushed us to limit our volumes. Having said that, we more or less are at 60/40 kind of a trade/non-trade kind of a mix for the, for the full quarter. I'm assuming that you have asked for the Q4, Mr. Keshav. Yeah. Okay. That is fine. One last question from my side. As we have seen your OpEx have increased quarter-on-quarter by 1% while others have reported 8%-5% decline. The reason was that we are seeing your freight costs have increased and also other expense. Can you please highlight on this aspect? Mr. Keshav, I'm sure you'll appreciate, we are trying to ramp up the volumes into the markets, we definitely had one-offs kind of sales expenditure, especially to do with the sales promotion, because we have huge volume that is about to come up or is already started into the market. At the same time, some of the markets, the ramp-up was not as expected, especially the Jajpur. The spends, I would say these are one-offs that actually went up in the current quarter itself. freight obviously was higher because we had to recalibrate the product presence, as you would have seen the realization for us, there was no drop in spite of a sharp reduction in the prices in the markets that we service, Mr. Keshav. At the same time, in part of some of the other expenditure, the acquisition and the legal related expenses, which are again one-off, also were reflecting in the current quarter, Mr. Keshav. Okay. Just to follow up on freight, as we are seeing your lead distance have also decreased quarter-on-quarter. What exactly have you done? Whether rail or, rail and road mix have changed, or what exactly have changed for you? No, no. We more or less remain the same, sir. There are certain markets where we had to go through the godown, so incrementally there was an additional handling cost that we had to incur, which is part of the freight, Mr. Keshav. Okay. Thank you. That's it from my side. Thank you. Thank you. The next question is from Pritesh Chheda. Pritesh, please go ahead. Yeah. Hi, am I audible? Yes. Please go ahead. Yes, sir. Yeah. I have 3 questions. One on the pricing scenario. Usually every 4 year we have seen price increases coming in southern market, which is FY 13, 16, and FY 20, and some of it have coincided a year before the some election year, either it is a state election or or the national election. Do you see some of it happening possibly this year? That's the first question. My second question is, with the Andhra Cements acquisition, what is the peak debt that we might see for you resurfacing or coming in FY 24 or FY 25? That's my second question. My last question is on the power and fuel cost versus the exit of quarter four, what kind of reduction do we see happening? For that reduction, what is the improvement in EBITDA per ton that we see versus the FY 23 number if the realizations are segment? Yeah. Thank you, Mr. Pritesh. Let me address the same sequence as you have asked the question. This is regarding the pricing. Yeah, in fact, the years that you mentioned are the years when we actually suffered the most because the margin compression typically has happened during those years, sir. I cannot say that it is the trend lines in cement sector has always been very, very similar. But this time around, we were very surprised that the prices did not ramp up in line with the input prices that the price inflation that we have seen. We don't know what to blame, but one of the facts remain that, you know, there has been a huge ramp up on some of the supplies that did come in the regions that we operate. Rather, across India, we have seen most of the supplies picking up during this time. The demand though has been extremely strong. Of course, the demand ramp up typically coincides with the 1-2 years pre-election kind of years. That we have seen. Yeah, if you have seen south, we have seen almost close to 20+% growth year-on-year number. We are more than hopeful that the momentum to continue into the coming year. Though probably it may not be as strong as it has been the current year from a number perspective because all the elections are not bunched up. They are actually sequenced, six months with a six months gap. Karnataka just went for an election. Telangana is due by December, and Andhra and some of the states that we service are due for election somewhere around June, July of next year. With this spacing, we believe it may not be as sharp as it has been in the current year at 20%, but we do believe it should be anywhere between 8%-10% growth for the markets that we service for the current year. Coming back to the pricing, we are happy on one tone that in a normal case, the price would have deteriorated much, much more than what it has. Realization was very flat in the markets that we service for most part of the year. For the second half of last quarter, the south, deep south prices, which usually are strong, actually tanked quite a bit. Bangalore and Hyderabad markets remain reasonably steady to with a positive bias. Though a lot of effort was put in between for price increases, they were very, very short-lived. Right now from the exit of April, South Tamil Nadu prices still are under pressure. Bangalore remains steady. In Hyderabad we have seen INR 10-15 per bag kind of an increase in the current months that went by post-exit of April. Few days that we have seen, or middle of April to now, we have seen an INR 10-15 kind of an increase in Hyderabad and the surrounding markets, especially the Andhra markets, Mr. Pritesh. Going back to the next question on the debt. What we are currently is at peak of the debt because we completed the transaction. We should be somewhere around INR 1,200-INR 1,250 crores of net debt at its peak, which we are in the current year. From here on, we should see reduction happening quite sharply into next two few years. The third is regarding the power and fuel cost. In our case, our inventory position is fairly strong, but of course, we moved on from the earlier 6 month kind of an inventory to a quarter of inventory. For us, the transition to the low-cost pricing should start. The impact of it is going to be marginal for the current quarter, that is the Q1, but we would see a significant kind of saving getting into the Q2. If we have to quantify, we expect a INR 50 kind of a drop on a power and fuel for the current quarter and a close to INR 100 kind of a drop for the Q2 onwards, Mr. Pritesh. Thank you very much, sir, and all the best. Thank you. Thank you. The next question is from Shravan. Please go ahead, Shravan. Hi, sir. Sir, first, just coming on the volume front. Now, if you can just help us in terms of the volume that we are looking at, 6.5 million ton. How much are we expecting from the Andhra, from the Jeerabad and the original plants? That is the first question. Yeah. Mr. Shravan, we are expecting an incremental 1 million from Andhra Cements for the current year. The rest everything would come from the assets that we have. Yeah, we are not expecting a huge jump in Jeerabad for the current year because we have been extremely cautious about the volumes to be done from there. Obviously because of the pricing reasons. We are not facing a challenge of sale, but we have been extremely cautious on at what margin that we should do. We try to limit our volumes in Jeerabad. We expect a slight ramp up there, but we are expecting a good ramp up at Satguru Cement. Where we have seen almost close to 70 odd% capacity utilization to ramp up to 80-85% for the full year for the current year. Rest of the other assets we expect more or less very, very similar performance like how it has been last year, Mr. Shravan. Broadly around for the full year, we can do 6.5 million ton plus kind of a volume? Yes, sir. That is the target that we have done for the or put for the current year, which is at 6.5 million, Mr. Shravan. Okay. Secondly, in terms of the we have mentioned in terms of the power and fuel cost of decline. Also you mentioned there were some extra one-off expenses in other... if you can help us. Just trying to understand because relatively, if you look at our EBITDA per ton is much lower. Q1 decline. Just trying to understand on a full year basis how one can look at in terms of overall profitability if the way we are looking at INR 5,000 power and fuel cost decline. Mr. Shravan, you are asking for the forward year, right? That is for the current-. Yeah. -FY. Yeah, yeah. Yeah. Yeah. Our budgeted number is INR 625 per ton. That includes, you know, the ramp-up costs and everything inclusive. On a conservative estimate, we are expecting around INR 625 per ton, Mr. Shravan. Now in terms of the expansions, to increase the capacity for the Andhra from 2 million-3 million tons, and the CapEx. How it will be, CapEx for this year, next year and any change in timeline in terms of the start of the expansion at the Andhra? Sir, As indicated, it's a 15-18 month process. We would like to start the CapEx pertaining to this only during the second half of the current year. From then on, it should take 18 months, sir. That should help us save on the fuel. Of course, there is a marginal upgrade, but given the market, we don't expect all the upgraded supply to come into the market in a short period of time. The very idea of going for that, I would not say is just increasing the volumes, but also updating on the cost-related issues. That we should initiate during the second half of the current year because we are due for commissioning in the middle of June, so we would like to spend a quarter before we would initiate on the further investments into Andhra. On a timeline front, yeah, it should take 15 to 18 months from the second half of the current year, sir. By end of FY 25, Q4 FY 25, we should. Yes, sir. Yes, sir. You are absolutely correct. By end of FY 2025, we should be ready with the 3 million ton, with a much, much more efficient preheater system at Andhra Cement, Dachepalli unit. Okay. In terms of the for this year and next year, broadly, the combined consolidated CapEx would be how much? Sir, it is INR 30 crores for the maintenance CapEx for all the other assets, as indicated earlier. The only CapEx that we intend to do is at Andhra, which is spread over 15-18 months, would be somewhere around INR 275 crores-INR 350 odd crores, sir. We would like to fine-tune by end of Q2, we would be happy to come back because it again depends on how the ramp up has been from a technical side. We have earlier indicated close to INR 400 crores, but we feel that around INR 275 crores-INR 325 crores should be good enough for us to do the expansion CapEx, which should be spread over 15-18 months at Andhra level, sir. Thank you, sir, and all the best. Thank you. Yeah. Hi, sir. Thank you for the opportunity. Sir, first question is a clarification. In your presentation, there is this slide on power and fuel cost where we give, you know, the spot prices also of the cost for the current quarter. The thermal prices, if you see the first chart, it has, you know, declined quarter-on-quarter. Our cost, it has gone up. What is... Which is the right, you know, chart that we should see. Yeah. One is the general market, sir, and the other is for specifically for us. Okay. Rupees per kcal would be the right thing to look out for in this. Again, this is, this cannot be generalized. I can only write rupees per kcal on a landed basis for ourselves, sir. I cannot write for the company itself. In our case, there is a slight increase because it's averaged out kind of a number for us, coming from few quarters back, and we do have an inventory. We have reasonably good inventory position even now as we speak into the, going into the next quarter. We have always strongly used the domestic petcoke as well as the domestic coal. There has been a significant drop on the spot value over last 15 days to 20 days, especially on the imported petcoke. The last shipment that we got was at $160, which is due for receiving end of this month. I think going forward into Q2, we should have a significant saving as the current spot prices are at $130. Okay. Okay. Sir, one thing that, since, you know, Jajpur, once it, you know, starts ramping up, now, we are, you know, supplying clinker from Mattampally, which also increase our lead distance. Is there any plans to set up a clinker unit around, you know, Jajpur and, yeah? Sir, I wish, I wish we had that flexibility, sir. The limestone availability in Odisha State is very, very limited. The advantage that we have is Mattampalli still happens to be one of the lowest cost producer of clinker. Though it is 150-200 kilometers longer than Chhattisgarh market. On a landed basis, still, Mattampalli still offers that much more cost advantage. I'm sure with the in the current year you would see a significant kind of changes in the cost structure. At this point of time, Jajpur remains as a wholly-owned subsidiary, so there is an arm's length pricing issue. Jajpur is due for merger into Sagar, sir, so that should also put some cost on a landed basis much lower compared to what it is right now. That should give us flexibility at Jajpur going forward. We are just awaiting for the court order, for the merger process to get done fully. Okay. Sir, was there any shutdown taken at the Mattampally unit during the quarter? For the current quarter, yes, sir. As indicated, we took an, as in we have indicated for 18 days, but finally we have taken 21, 22 days precisely. Mattampally plant is back to normal. Sir, why was it taken? Sir, it is long overdue. It's, if you look at last year, the plant ran for almost close to nine months without any stoppage. It was due, so it was taken in the Q1 itself, sir. It would have been nice, you know, to take it in the monsoons when the demand would be low. Sir, it's always nice. See the typical spread we in a, for a cement kiln is 330 days, sir. That is 35 days of break. It gets split between two parts. One, it has to stop for 15 to 18 days during season, and the balance in the off season. In our case, we, the kiln ran very well, so we wanted to optimize on the restart expenditure so we could stretch ourself. That did not impact much in terms of the volume during that time, sir. Sir, this shutdown was taken after how long? I missed that part. Nine months, sir. Nine months. Okay, sir. Done. Thank you so much, sir. Thank you. Thank you. The next question is from Darshit. Please go ahead. Yeah, hi. Thanks for taking my question. I wanted to, like, how would your view of revenue and margins would be going forward in the next two, three years? Sir, I wish I could address that long. For the coming year, we are hoping to do 6.5 million tons with an EBITDA margin of conservatively at INR 625 EBITDA per ton. That should give us close to INR 400 crores plus kind of EBITDA, sir. Okay. Any, Okay, so volume. What would be the translation of volume to revenue? Any basic, any ballpark view? Sir, typically we don't look at top line in our sector because it's a function of how far and which all markets you service. Okay. This should roughly be close to around INR 3,500-4,000 crores for this similar kind of a volume. We are expecting a INR 400 crore kind of an EBITDA for the coming year, sir. 2-3 years is a very long-term view. We would be getting into elections and all, but yeah, we think that this is something which is doable in our case. Okay. Thank you so much. Thank you. Yeah. Good morning, sir. Thank you for the opportunity. Hello? Yeah, please go ahead, Mr. Nandi. Yeah. sir, you just mentioned like we incurred some additional advertisement cost in our Andhra kiln. Will that be going for next quarter as well for the sales promotion expenses? Mr. Nandi, as I mentioned, yeah, this was kind of one-off where it was more like, I would not say just advertisement, but it's a promotion, expenditure. Okay. Because we are consolidating the markets that we are operating. That's what. It's a one-off kind of a number, Mr. Nandi. Rest everything would be as spread as in the past, but we had close to around INR 10 crore-INR 11 crore kind of odd one-off expenditure in the current quarter, Mr. Nandi. Okay. Thank you, sir. The next question is like what kind of volume growth you are like seeing in this current quarter? Like, already two months have gone from the exit of March quarter. Is it in the same trend as what happened in the March quarter? See, typically Q1 and Q4 are the strong quarters, sir. It is very, very similar to how it has been in Q4. For unseasonal rain, we should have actually peaked out. I expect a similar kind of volumes as, Q4 in Q1. Again, you have to please, make the adjustments for some parts there is election. Typically what we have seen is two months before and two months later, the elections. After the elections, especially in Karnataka, things tends to be slightly slowed down. But in Karnataka it's majorly Bangalore, sir, so that to a certain extent should negate, but we expect very similar kind of volume growth as Q4 of last year into the Q1. My last question is like in the power and fuel cost front, we have seen like no significant drop on a QOQ basis. You commented like we having an inventory of 3 months going forward and with the prices dropping from $1-$160 as of now, and right now it's $130. What kind of cost pattern benefit will we be having in the coming quarters, sir? Yeah. Let me repeat, Mr. Nandi. We are expecting an INR 50 per ton kind of a drop on the account of power and fuel for the current quarter. Going into the Q2, we expect it to swell to INR 100 per ton into Q2. INR 100 per ton. Thank you. Thank you so much, sir. Wish you all the very best. Thank you. Good afternoon, Sreekanth sir. Yeah, good afternoon, Badri. Sir, congrats for targeting 10 million tons. Cement production and revenue generation, and also private investment from Premji Invest. It is good for our progressing and big CapEx which you have undertaken. We wish as a shareholder value for a period of time it may grow. I have two typical questions, sir. If I go by past 3 years performance on profit before tax or profit after tax. In 2021 we have made INR 186 crore PAT. In 2021, 2022 we have made INR 59 crore and this year INR 8.5 crore. It is falling from INR 186-INR 8.5 crore as a PAT. This is the concern. Margins have gone up, your sales ton have gone up, revenue generation is 24% up, still margins are there. As you said in your earlier statement that there was some problem of labor or rain or offtake. Going forward, how you raise your margins? One thing, sir. Secondly, the financing cost, which is increasing because of large CapEx. Say, in 2021 it was INR 46 crore, 2022 it has gone double to INR 92 crore. In 2023 it is more than INR 200 crore. When financing is needed, Premji Invest investment has come. If I look your equity, almost 85% is pledged. Is it worth growing faster or growing slower so that you can have margins also as well as your target achieved? That is what the concern as a shareholder. Second question is the timeline for clinker commissioning at Jajpur, which we are shifting from AP, Telangana. These two questions, sir. Please. Yeah. Thank you, Badriji. Yeah, now let me again update you, sir. In FY 2021, yeah, we had started the ramping up and commissioning starting from Satguru to Jajpur to now Andhra Cements. We have been on a growth phase for last three years. Unfortunately, during the current, the last three years, the input price regime has significantly gone up, but not the pricing. That actually impacted us quite a bit on the margin front. Coming back to the financing as the company was growing. See, I'm sure you'll appreciate from FY 2021 with a 5.75 million, we have reached close to near doubling to 10.85 million. Obviously this has to come at steep CapEx. Whatever was in our means, we tried to optimize. But in spite of having such a large capacity Yeah. We strongly believe that the net debt at INR 1,250 crore is still manageable. Even in a worst case scenario like last year, yeah, where the EBITDA generation significantly fell, we are in a situation to comfortably service that. We are doing it with a mix of debt and equity. We never cross more than 1 is to 1 on a debt equity ratio. I'm sure you are aware. Let me again repeat, it's at 0.76 is to 1. In spite of such a huge doubling of capacity, we did not significantly over-leverage ourself and which we don't intend to. Now, the question is, when margin is falling should we grow? See, I think growth is a function of various parameters, sir. You cannot wait for margins to come for your growth. Sometimes, the increased capacity sometimes could wipe your debt in 1-2 years' time. What we have been extremely prudent is that we are not over-leveraging ourself for any of the growth plans that we have. We did not deviate from the earlier stated objective of doubling every 10 years. Yeah, we did indicate that we want to reach to 10 million by 2025. I wish if we were to do it in 25 and we had a similar kind of an opportunity waiting for us, we would have definitely waited. Opportunities don't wait for us, so we have to grab it. Yeah. Since Andhra was available in the horizon, we ended up executing the current year. That definitely took a toll on the overall kind of debt. We are reasonably confident about the leverage position that we are in. I'm sure the prospects for the cement sector has always been volatile, one thing's for sure is on the long-term trend it has always performed extremely well. Especially the balance sheet performance of Sagar has been extremely strong, and we intend to keep the same momentum going forward, Mr. Badriji. Yeah. Now about Jajpur clinker. Yeah. Jajpur clinker has to be transferred from Mattampally. I think that's the best location. And- At this point of time it has to go from Mattampalli itself, Badriji. It's a simple grinding station in Kalinga Nagar Very close to Jajpur in Odisha. The clinker has to move from Mattampalli. Yeah. I think Mattampalli is in a very good situation to service that market. It's only a question of time. When the merger happens, we intend to save some amount from an arm's length pricing issue. That should help us. A small increase in realizations also would help ramp up that capacity fairly quickly, Badriji. Sir, going forward, again, simple query. Going forward, when the capacity is expanding and our margins are falling down, do you support this type of philosophy by opportunity? Badriji, I think, we are looking at what has happened in 3 years. 3 years is a very short term in sector. If you have to look at a 10-year horizon on a CAGR, company's performance has been always extremely strong, and we believe that we will be back on track. Just because of 3 years, yeah, we cannot take a back seat when it comes to. We have to stay relevant to the market also, Badriji. See, we always wanted to be at least 1 to 1.5 times to that of demand, it would compel demand doubled every 10 years historically. Unless you double your supply during the same time, your relevance to the sector itself would be diminishing, sir. You have to be conscious of that fact. At this point of time, since we are just coming through the growth, balance sheet looks to be slightly on a leverage position, but it's only a matter of time when things should get normalized, Badriji. Yeah, we are coming off one of the best years that the industry has seen in FY 21. Yeah. Which was extremely difficult for life, it was one of the best years for the sector, especially FY 21. We have seen almost 35% margins, which we have seen after close to around 2 to 2.5 decades of our existence. Comparing with that would always be a challenge. We wish every year is like that, I'm sure you'll complain that we are growing slow. We cannot do stick to those kind of profitability for the growth matrix, sir. What I can assure you is that the quality of the balance sheet has always been strong, and it will continue to remain strong. Okay, P&L is not a function with one company alone, it's also a function of market, we have to be aware of it. We are just coming through an expansion. I'm sure it would take some more time before we look at further growth, going into the next few years, Badriji. Sir- We have to double only 10 years from now, so we have some breathing space. We could achieve 2 years of saving from what we have intended. That also gives some breathing space for us to consolidate the current position that we are in. Sir, we have full confidence that you being a technocrat in cement industry and the confidence we have seen for the past 5 years. What I suggest is it as an investor, is it the time to invest more, like Azim Fund has put for a normal investor to see the 10-year guideline as you are supporting? That is what my submission only. That's all. Thank you, sir. Thank you, sir. Thank you, sir. We'll take the next question from Ritesh Shah. Please go ahead. Ritesh, you may go ahead with your question. Yeah. Hi, sir. Couple of questions. First, sir, can you detail on the pricing differentials in the southern states in Q4? How are we seeing the trends, say April, May, and going forward? I detailing I would, I would share offline, Mr. Ritesh, but the fact was that for the first time historically, we have seen north of south has been extremely strong compared to south of south, which is very unusual. It is first time that we are facing this situation. Chennai and south of Chennai is very similar to Hyderabad markets, which is very, very rare. From April exit to middle of April all the way up to now, what we have seen is Hyderabad prices to be around 10-15 rupees higher. Chennai prices are slightly negative at as we speak, but I would say they tanked quite a bit and it remained more or less in that situation. Bangalore has been steady, Mr. Ritesh. Right. Sir, if I have to just take this question for, say, next six months or next three quarters, assuming where the thermal coal and petcoke prices are, the industry cost curve is going down. Would you assign a probability assumption that cement prices can remain at the levels where it is or would it? Mr. Ritesh, what we have to look at is the price reduction in power and fuel may not directly translate to saving because the clinker conversion factor has been going up steadily. Given that scenario, there will not be a significant saving on this. What we have seen is a significant drop in petcoke, but not in the imported coal as we speak. We feel that that also should come up along with the petcoke price reduction. Only then we would see a significant changes to happen to the power and fuel. What we have addressed is only specific to Sagar because we are not using any imported coal. We are dependent on petcoke and the domestic coal. Domestic coal, there is not a significant change, or rather it is flat. The only difference is the petcoke saving. We are close to around 60/40 kind of a mix, with 60% Indian coal and a 40% petcoke. We exactly have touched equilibrium point with the imported coal at $130 spot value right now. Another $5 drop should make it at par with the domestic coal price, in our case, on a landed basis, Ritesh. I cannot comment much about the industry because how many of the cement plants are dependent on imported petcoke? Not many. Imported coal price drop should significantly add to the bottom line, Mr. Ritesh. That's, that's our view. Perfect. Yeah. Sir, just last question. Sir, when we say petcoke, what is the grade of petcoke that we are looking at? Like, is it 4.5, 6.5, 9? Sir, in our case, again, I'm speaking for ourself. Our kilns comfortably were absorbing high sulfur coal all the way up to 6%-8%. Typically Saudi coal and some of the domestic petcoke, especially the CPCL and all, they are relatively higher compared to the U.S. petcoke and some of the Reliance and these guys. We are used to 6%-8% kind of sulfur content in petcoke. Our limestone was able to absorb that kind of sulfur and we could lock in SO2 into the clinker itself. Not all the plants can handle up to 4% kind of sulfur, but some of the modern plants definitely have ability because they have those duct sizes which should comfortably absorb the sulfur cycle from clogging. Sure, sir. This is very helpful. Thank you so much. Thank you. From Rajesh Ravi, please go ahead. Hi, sir. Good afternoon. My question pertains to first this expansions plan which you mentioned. The press release which you mentioned, INR 468 crore proposed investments in the Andhra Cements Limited and the call you mentioned around INR 270-280 crore. Where am I missing that? Yeah, Mr. Rajesh, you heard it right. The earlier presentation was for INR 465 odd crores for the growth, upgradation at Andhra. Yeah, we are trying to take a fine-tuning some of the investments onto the cement grinding side. Probably we might optimize. So we would like to limit the overall kind of growth plan somewhere around INR 275-325 crores. But this we would come back to you by middle to end of Q2 to exactly tell you the schedule as well as the overall CapEx for the expansion plans at Andhra, Mr. Rajesh. Yeah. Okay. Sir, this quarter you mentioned there was INR 10-11 crore of exceptional costs, operating cost number got inflated. If I adjust that, EBITDA margin would come around INR 360-370. Now for full year, we have done close to INR 400, INR 300. Where do we see INR 300 margin jump? How do you construct, you know, which segment you're looking at which will drive this INR 300 margin expansion? Yeah. In our case, we are seeing 1%- 2% kind of a realization increase purely on account of optimization of rates with Andhra ramping up, Mr. Rajesh. The cost, the startup cost, if you remember, and the kind of coal pricing that we have seen at the start of the year to now, that itself is the delta that we are seeing to add up to our INR 625 EBITDA per ton kind of a narration, Mr. Rajesh. Okay. Sir, the quarterly per kcal number which you share, if I look at for the full year broadly, correct me if I am wrong, it seems that 60% would be your petcoke for the on an average for the full year basis, 60%-65% would be the petcoke consumption and 30 odd- No, sir. It is actually domestic and 40% would be the petcoke, Mr. Rajesh. Okay. No. Group level sourcing of coal based on per kcal. If I look at Q1 was around. No, I'm sure Mr. Prasad should be happy to give you the breakdown. Sure, sure. I'll get that. The mix has been 60% domestic coal and 40% petcoke. Okay. On a full year basis, on FY 2024 versus 2023, you're looking at significant reduction in your per kcal cost and that would be a major driver for this expansion? Yes, sir. The expansion in terms of the margin is primarily on account of a 1%-2% increase in the realization and rest everything has to come from the cost itself, where the fuel cost itself also. See, for us, a couple of things would add up. There were some one-off raw material purchases, which is one-off, which was very specific. Secondly, the major chunk would come from optimization of the fuel mix itself or the fuel consumption itself at Mattampalli. During the last shutdown that we have taken, we have done some modifications and alternate fuel also should start kicking in, Mr. Rajesh. Okay, sir. One last question. Could you... What would be the quarterly run rate for your depreciation and interest in subsequent quarters, sir? Yeah, good question, Mr. Rajesh. I'm sure I will address this offline. Rajesh, similar trend will continue. There may not be big change in it. Sure, sir. Thank you. I'll come back in queue. Thank you. Thank you. Thank you. The next question is from Abhisar. Please go ahead. Yeah. Hi, sir. Sir, can you just confirm the peak net debt that you are now looking at for our company? By which quarter you will get that? Yeah. INR 1,250 crores. Yeah. Okay. Sir, I think after the Andhra acquisition got completed in Feb, you had indicated a peak net debt of INR 1,430 crore and now this is INR 1,250 crore. The difference is because of that CapEx difference which you are yet to finalize or something else? Yes, sir, it is the CapEx difference that we are yet to finalize, Mr. Abhisar. Okay, understood. Okay. Sir, on Andhra Cement, since the company has now got listed again on the exchange, and congrats for that to both you as well as the minority shareholders who have been given that 5% there. Now, we have a target to reduce our stake going ahead, right? From 95% to maybe first 90 and then to 75? The statute is for the first 12 months, we have to reduce it from 95- 90. Further to reduce to 75 before the end of 36th month, that is the 3rd year. Yeah, that is the statute. Yeah. Sir, I wanted to ask, what are the plans to execute that? Are you also looking to find strategic buyers for that? Is there any plans that you can indicate? Also a ballpark valuation that you would like to- Yeah, Mr. Abhisar, we are just into the transaction. We would be very happy to revert to you. The current focus is more to do the ramp-up. We are yet to strategize on the ways and means to get the things done. Of course, there are a couple of options, but we are yet to firm up. We would be extremely happy to revert to you as soon as some plans get concretized, Mr. Abhisar. Sure, sir. Sir, on the VCW plant of Andhra Cement, I understand that you have decided to shut down the operations there. Just wanted to check on the progress and then how far would we from we would be from an eventual land sale there which you had committed for. Yeah, Mr. Abhisar, as indicated which was part of the resolution plan was to shut the operations there, which we have done. What we have done is, for the staff we have given settlement and relocated some of the people who intend to work in the Dachepalle unit. With that, we could completely settle the full manpower that is available there. We have disconnected. from the power supply. In fact, it was earlier disconnected, so we have formally disconnected from the grid. Currently the only expenditure that we are incurring there is pertaining to the security. We started applying for some of the clearances from the government that are required. Right from monetization, which we believe should take 15- 18 months, timeline, sir. we Got it. Intend to get all the clearances before we would start sitting on the table for monetization pertaining to that, Mr. Abhisar. Sir, any indication you can give for the amount that can be monetized from there? Mr. Abhisar, as indicated earlier, it's 107 acres. The current government rate is at INR 4 crores an acre. We are yet to look at, you know, what are all the options that we have. It needs some more paperwork before we would start getting to know the exact contours, but at this point of time, the government rate is INR 4 crores per acre, as per the records, Mr. Abhisar. Yeah. Sir, I'm just reconfirming, you will not look at, doing any JDA with any real estate player. You would look for an outright sale here, right? Yeah, that's our first preference, sir. We have to see how best we can maximize. At this point of time. Yeah. We are yet to sit, so I would not like to confirm or do any of that. At this point of time. We are only doing the paperwork that is required for us to start looking at all the options that would be available. I'm not ruling out any of the options, not that, you know, we have something in our mind. We are not into real estate development, which I can assure you. Sure. we would like to. Yeah. Take the first call, whatever would be the best in the interest of the stakeholders, Mr. Abhisar. Yeah. Sir, last question. On Andhra Cement startup, you have indicated a startup CapEx of some INR 70 odd crores. Just want to check, will there be any startup costs which will be routed through P&L also for Q1? Yeah, Mr. Abhisar, it should be very, very marginal, I would put it. Maybe INR 1-2 crores. That is primarily to do. deal with what we cannot capitalize. Rest everything is part of the scheme itself, where the startup ramp-up and everything is part of that INR 771 crores that we have indicated, Mr. Abhisar. There could be the salary expenditure and associated ones, which would probably flow through P&L, but that should be limited to around INR 2-3 crores at max, Mr. Abhisar. Understood, sir. Thank you so much, sir, and best of luck. Thank you. Sir, just to clarify, when we mention in the previous participant answering that the EBITDA pattern of 625 per what we are looking for FY 2024, that we are looking at 1%-2% increase in realization. Do you think that is also a possibility that we can see even -1%? Yeah. This. Yeah. has a Mr. Shravan. Uh- Whenever we do an outlook, we are going with an assumption that there would not be. We have been conservative in our outlook for the realization jump. For us, the realization jump is only happening because of our internal optimization, sir, not that we are expecting it to happen from the market. We are going with an assumption that there may not be a significant increase in the realization going forward. That is what we have kept in our mind. When I talk of 1%-2% increase in realization, it's purely because of the optimization that we aim to achieve with some reorientation of material from one unit to the other. For that, we have not assumed any market-related issues pertaining to the expansion of the margin itself, Mr. Shravan. Yeah. The second is just to understand. Now for, from 10.85 million tons to double by FY20, FY33, in next 10 years. 35, sir. So just- Yeah. Yeah, we would still keep that as FY 35. Let me stick to that as FY 35. 25 was our number. Just because we have achieved saving here doesn't mean that we'll end up saving at the back end. We are just done with this. We would rather come back to you with the specifics as we would progress, Mr. Shravan, on that. Broadly structurally, just trying to understand. Even if, let's say, if you want to expand, definitely the immediate is the Andhra 1.2 million ton will be additional that will come by FY 2025. Just trying to understand the further expansion. Yeah, Mr. Shravan. See, we have grown 70% of our volume over last 1 to one and a half decade with acquisitions. I would rather wait and digest Andhra before coming back to you. We would be more than happy to come back to you if there are any options that we have. We have always been very, very open, sir. The Mattampally unit, Andhra Cements, as well as Gudipadu offer a huge scope for us to more than double. If you are looking at brownfield kind of an addition. But we have always been very open for any of the options for our expansion plans. These three assets do offer quite significant opportunities for us to grow. We have always been market wise, so we would continue to be market wise where we don't intend to put pressure onto ourself as well as the market with any of our growth plans, Mr. Shravan Shah. Thank you, sir. Thank you. Thank you. The next question is from Navin Sahadeo. Please go ahead. Yeah, good afternoon, sir. Two quick questions. Sir, one is, I think at the time of the deal with Andhra, there was this news about Vizag unit. The land there, like, you know, we'll not be able to use that unit and there is a possibility of a monetization there. What is the update on that front? Second quick question is, post the CapEx that we are doing at Andhra, what is the savings that you would like to guide in the overall cost of production? Just one last question, if I may. Current prices, you said of course you gave a flavor that Andhra is a little higher and Tamil Nadu continues to be pressure, directionally south would be at par or slightly lower as compared to March. Those are my three questions. Thank you. Mr. Navin, let me repeat, from Vizag works of Andhra Cement, we have taken a call to shut down the operations there in that unit because of the antiquity of the assets. Although it's very, very well-maintained, the location itself also is very complex because it is part of the city. So the heavy truck movement either inward or outward is restrictive because it's well within the city. That actually has forced us to look at an option to close that asset, which we have done. The intent was to monetize. Obviously, once you have closed the asset off, the other option is to monetize, which we are closely looking at it definitely demands some amount of approval process from the government, which we have initiated. That should take anywhere between 15 to 18 months is what our team has indicated. We would want to see the progress on that front before sitting on the table of how do we monetize. So that's the current status of the Vizag related land related. Now going to the CapEx at Andhra. As told earlier, yeah, the earlier plan was to infuse around INR 450 odd crores to modernize the plant. I would say modernize, upgrade and also increase the capacity because all of them are in tandem. We would want to take that call probably once we have commissioned, which is not very far from now, which should be a month from now, we should be in a situation to get into the commissioning mode. We would want to further fine-tune and study before taking an investment call. As we speak, some amount of back of envelope calculations is telling us that, you know, around INR 275 crore-INR 325 crore of investment should do for what we intend to do. The potential savings, the bigger CapEx in that portion is to upgrade the preheater itself. Currently it is with separate line four-stage preheater with five-stage calciner line. From there to moving to a six-stage itself should save anywhere between INR 200-INR 250 per ton on the power and fuel, especially on the thermal fuel side, Mr. Navin. We would be happy to come back to you somewhere around middle to end of Q2, coming Q2 to further give clarity on the timelines, and the CapEx plan and the potential savings that we aim to achieve from Andhra. As we speak, it looks like just the preheater modernization should help us save anywhere between INR 200-INR 250 per ton. Primarily being the six-stage, new generation six-stage preheater offers anywhere between 50-60 minimum kcal saving per ton of clinker from the current position. Even if you add INR 2, that should be anywhere between INR 120-INR 130. We would be very happy to fine-tune as we progress. This also helps us increase the output. Combination of these two should give a INR 200-250 kind of a per ton saving, even with the electrical saving that is likely to come up with that. Right. Thank you. Thank you. Thank you very much. Thank you. Good afternoon. Thanks for the opportunity. Only one question I have. Rest of the questions have already been answered. See for in the other income, can you please give the split up of redemption proceeds out of INR 181 crore? Yeah. Mr. Prasad would be the right person to address that. No, it's INR 168 crore, out of the NCD redemptions. Going forward, other income will be, how much in this quarter? Yeah, it will go back to normalcy. Once. Normal. Exclude that 168, whatever is rest on the paper, it will continue on that. Okay. Okay. Okay. Thank you. Thank you. Thank you. Sir, a couple of questions on the chat box. The first question is being election year both at the state and the center, what are the management views on CapEx spending and how will it impact the cement sector? Like in the past, sir, which I did narrate, for one of the questions, yeah, we don't take one off year to postpone or prepone, but some of the small investment might get deferred because there is always the ambiguity about the demand. At Sagar, we generally don't take that short-term view, sir. We have always taken a medium to long-term view. I believe that's what most of the industry would do. If you have seen, industry has taken a significant supply calls during last 1.5-2 years, which also is one year before the election, sir. Nobody actually takes a view for the election. People generally take a medium to long-term view because it's a large capital-intensive kind of a sector. Sector has always been kind to all its stakeholders. Given that scenario, a small deferral for a quarter purely because of availability of people might influence the decision, but not the return ratios or the expectations in terms of the demand. That has never influenced the decision at Sagar, and I'm assuming that that would be the case for most of the large sectorial players too. Change on volume and EBITDA per ton, I think it's. Which I did, but let me repeat. We, the target is to do 6.5 million tons for the FY 2024, with an EBITDA expectation of INR 625 per ton, which should translate to INR 400+ crores of EBITDA for the current year, Mr. Manish. Thank you. The third question is, are we on track to hit the EBITDA break even in Q1 FY 2024 for the Jajpur plant, and the green power share in FY 2023? Yeah, I think the break even call for Q1 should be too soon, sir. I think in the current year, we definitely are positive about the potential break even for EBITDA at Jeerabad because we were operating at sub 14%, 15% for last year. From that scenario, I think moving close to 30% should be far more realistic in the current year. That should help us reach the break even point in the current year rather than taking a Q1 call. By the time we complete Q1, Q2 will be hitting us with the unseasonal kind of a scenario. I would rather take a conservative view that the current year we should be more than breaking even at Jeerabad. The green power share is at 32% across the group, sir. The waste heat recovery system at Satguru Cement also is reasonably come to. I would not say full optimization, but very close to the opt--. We are hitting 4 megawatt. The intent is to get 4.5. With that, we should be touching on an average at 30%-32% green share in. Oh, you are looking at FY 2023? Yeah, we are at 30%. We will now like to complete the call. Any closing comments from your side, sir? Thank you all for joining on this call. Sincerely appreciate your time for reaching us to us. If you feel any questions are unanswered or if you have any further questions, please feel free to connect us at Sagar or CDR India. We would be more than happy to revert at the earliest. Thank you again. Have a good day. Thank you, Manish.