Ladies and gentlemen, good day and welcome to the Star Cement Limited Q1 FY24 earnings conference call hosted by Emkay Global Financial Services. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions at the end of today's presentation. Should you need assistance during the call, please signal an operator by pressing star, then 0 on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Dharmesh Shah from Emkay Global Financial Services. Thank you, and over to you, Mr. Shah. Thanks, Raju. On the call, we have with us Mr. Tushar Bhajanka, Executive Director, Mr. Vinit Tiwari, CEO, and Mr. Manoj Agarwal, CFO of the company. I will now hand over the floor to the management of Star Cement for their opening remarks, which will be followed by an interactive Q&A. Thank you, and over to you, Tushar. Good afternoon all. My name is Tushar Bhajanka, and I'm the Executive Director of Star Cement. I would like to welcome you all to the earnings call of quarter one. I have Mr. Manoj Agarwal, who is the CFO of the company. He will give out the numbers of quarter one, and then we can start the Q&A session. Thank you. Yeah. Hi, friends. Very good afternoon. I, on behalf of Star Cement Limited, welcome you all to our phone call for discussing our number for Q1 FY24. I would like to clarify that we are discussing on the historical numbers, and there is 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 2023, we have produced 727,000 tons of clinker as against 692,000 tons same quarter last year. So far as cement production is concerned, we have produced 1,194,000 tons this quarter as against 990,000 tons same quarter last year. There is a growth of around more than 21% over last year. Now I will take you through sales volume. During the quarter, we have sold 11.54 lakhs tons of cement and 0.1 lakh tons of clinker as against 9.80 lakhs tons of cement last year. There is an increase of around 19% in our sales. This is as far as cement and clinker sale is concerned. As far as geographical distribution of cement is concerned, in Northeast, we have sold around 8.36 lakhs tons as against 6.48 lakhs tons during same quarter last year. This is including our 10,000 tons of clinker sales. As far as outside Northeast is concerned, we have sold 3.29 lakhs tons of cement this quarter as against 3.32 lakhs tons same quarter last year. In terms of blend mix, it is almost 9% of OPC, 1% of PSC, and the rest is PPC and ARC. These are the quantitative numbers of the quarter. Now I will take you through to the financials. The total revenue figure this quarter is around INR 755 crore as against INR 628 crore same period last year. As far as EBITDA figure is concerned, the quarter we have done an EBITDA of INR 138 crore as against INR 138 crore last year. That is more or less same to last year. Though there is an increase in volume, but the same was negated by the decrease in our GST refund and increase of power and fuel costs. Profit after tax is INR 104 crore as against INR 105 crore last year. On account of recognition of deferred tax assets of timing difference of property, plant, and equipment in one of the company's subsidiary accounts, tax expenses of this quarter were lower. On per-ton EBITDA front, it is INR 1,185 during this quarter as against INR 1,410 per-ton same quarter last year. The decrease is mainly on account of increased fuel costs due to high-cost inventory and reduction of GST refunds. This is what our quarterly numbers are. Now I request all of you that if you have any queries, then you can ask the same, and I will request Dharmesh to moderate the query wherever it comes in. Thank you very much. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and 1 on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and 1. The first question is from the line of Shravan Shah from Dolat Capital. Please go ahead. Thank you. Sir, first couple of data points: trade sale, premium sale, and lead distance for this quarter? The trade sales, sales were about 88% of the overall sales. The premium sales were about 4% of the overall sales. The lead distance was about 207. Okay. And premium, sir, previously we have talked about that we want to increase to double-digit in 2, 2, 3 quarters. So this 4% in the last quarter also was a 4%. So what's the stand now? Our stand is same. I think Vinit Tiwari and the stand is same. We have taken initiatives. We have already seen the fruits coming in from the last month. There's a start of second quarter. We are pretty hopeful that in the next two quarters, we will be doubling our premium percentage. Okay. And in terms of the volume growth, definitely this quarter, we did a good volume growth. We are looking at 12%-13% for the full year. So are we seeing the same number, or will it be on the higher side, 14%, 15% for this year? The growth, we have already forecasted what we said last time. We are absolutely maintaining the same standards of now. Our growth will be as in the first quarter, it was better. Second quarter, considering the monsoon got slightly late set up in Northeast this time, which is last year, if you will see. So in totality, you may see a variation between quarter one and quarter two because monsoon came late this time. So quarter one was much better than last year quarter. Now, as monsoon has settled, we are seeing certain slackness in the demand. Also, these are the times when we try to take care of our maintenance work as well. In second quarter, per se, if I would say, like in the first quarter, we may not see such a steep growth, but still we will be growing, and it will be a decent growth, most probably in double digit. Okay. And in terms of the pricing, so post the June exit, how are the prices in Northeast and East market where we operate? As far as Northeast is concerned, prices are stable. If we consider it from the 1st April versus June versus this quarter, there was an increase. Presently, if you ask me, the prices are stable. We have not seen any dip during this start of this financial year. We are more or less have increased prices, and we are maintaining that. From the last month, June exit, in July and in 9 days of August, have you seen any decline in East market? No, no. There is no declining in the East market. In the Northeast market, there is some billing corrections which has been taken care, but it is not a price reduction because there was some billing support which normally is prevailing in the industry that has been withdrawn, close to a INR 15 price equalization support. It has been withdrawn, and the billing price has been corrected by the equivalent number. Now on the CapEx and the expansion, so all the three, one clinker and 2 million ton grinding that we are doing, so close to INR 2,300 crore CapEx. So how much we have spent till now, and how much more we plan to spend in FY2024 and 2025? We have spent about INR 750 crores overall on these CapEx. We have a reserve in the company right now of about INR 380 crores. The cement expansion that we are continuing will probably take a CapEx of about INR 800 crores more. This year, for the remaining year, we expect a cash profit of about INR 400 crores. From that perspective, we probably may need to take a debt of about INR 400 crores-INR 500 crores to complete our CapEx. Sorry, sir. Just to understand further, you said you have spent INR 750-odd crore out of INR 2,300 crore that we have envisaged for the ongoing expansions. Basically, we have three plants coming up. One is the Lumshnong plant, the Guwahati plant, which is the grinding unit, and the Silchar plant. So most of the CapEx for the Silchar plant would happen in the next financial year. So for this financial year, we've already spent about INR 750 crores, and we have a CapEx plan of about INR 800 crores for the remaining year. For FY25, how much we want to spend INR 400 crore? Yeah. So FY25 would roughly be about INR 400 crore for the Silchar plant. Okay. Okay. Because this 800, 800, 1,600 + 400, it is a 2,000. So total CapEx, I assume it was INR 2,300 crores, so. Yes. So I think this number that I'm talking, so of course, the amount of the budget for the CapEx has actually come down a little. So it's also an impact of that. Also, of course, it's INR 2,000 crore-INR 2,100 crore. So these numbers are not exactly to the point. So you would have to keep an INR 100 crore margin to it. Okay. Okay. And in terms of the timeline, what we previously mentioned that by November, we would be starting, and then next August and September. So that timeline remains intact, or is there any change? For the clinker, we said it would be by January. We'll be starting. And for Guwahati, it will be November this year, 2023. Yeah. So for Guwahati, we are still it is November to December. So we are expecting between November to December. And for the clinker plant, it is January to February. And for the Silchar plant, it has gotten delayed by about 3-4 months also because it just took us more time to secure the land. And also because now that we are getting a Guwahati plant, then we do not have a shortage of the grinding capacity. So postponing Silchar by 3-4 months will not hurt our sales. Okay. So now December, January, December 2024, or January 2025? Yeah. So December 2024 is our target. Okay. Okay. Got it. And the last is on the other expenses. This quarter, we have seen a decent Q2 decline, INR 22-odd crore. So any specific reason and how one can look at in terms of the next three quarters, how one can look at the other expenses? Of course, that INR 22 crore, most part of it was also the consultancy services that we took in that quarter from BCG and from other companies. In quarter one, of course, we haven't taken those services, and that's why the cost is lower. For the next two, three quarters, though we are engaging with one of the Big Four, but the consultancy fee should not be too high, and this cost should remain stable to where it is in quarter one. In terms of the kcal, so this time, power and fuel cost has actually gone up. So kcal cost last quarter was INR 2.1. This quarter, how much? And even we were expecting it to come down. So how one can look at so are we looking at further reduction in the power and fuel cost? Yes. So of course, the kcal cost was very high in quarter one. That was mainly because the opening stock in quarter one was very high. So it was at about 2.4, the opening stock. And that is why the kcal is about INR 2.35 GCV. What we can expect in quarter two is for it to come down to about INR 1.95 GCV. So there will be a significant reduction in the coal cost, basically. Okay. Because slightly surprised because last time when for the fourth quarter, 4Q FY23, it was 2.1, and we were expecting in middle of so around May when we did a call, we were expecting 1.85, 1.9. And now you mentioned that opening was at 2.4, and that's why the overall kcal was 2.35. So not able to get it properly. No. So actually, so there may have been a mistake in me saying it last time, but it was actually 2.4. That was our opening stock. And it came down to right now. It is about 2.05, our closing stock for quarter one. And with the bamboo and all those other fuels that we use, which we were not able to use that much in quarter one, which we are very positive of using in quarter two, we can bring it down to about 1.95. So that is what we are now targeting. Last, fuel mix. So in terms of the spot contract coal, is how much Nagaland coal and biomass and AFR for this quarter? So for this quarter, we had gotten about 30% from Nagaland, our coal. And the biomass was actually very less. It was about 7%, which we normally try to take it to 15%. And that was also one of the reasons why the GCV had increased. The spot contracted coal was how much? The spot contract coal was about 55%. Okay. Okay. Thank you. Thank you. Thank you. The next question is from the line of Utkarsh Agarwal from Yellow Jersey Investment Advisors. Please go ahead. Hello. Hello. Hi. This is Muksha. Thanks for the opportunity. So I had a question. Could you please let me know which key markets are we focusing on except east and the northeast region? And are we looking for any geographical expansion or diversification? Do you want to consolidate your position in existing markets? As far as our existing capacity is concerned, they are best placed to cater to the northeast market. Our focus is absolutely there. If you will see in quarter one, we have consolidated on our trade market share. So we have an opportunity to expand in the non-trade segment, which we are deliberately not expanding to, looking into our current capacity. Our target, obviously, is to solidify further our market share and take it to close to 30%-32% in northeast. That is the main market. The other aspect is we are working on the rest of the east market from our Siliguri plant. We are taking a number of initiatives to bring down the cost at our Siliguri plant, which will help us slightly to expand and fill full capacity of our Siliguri plant because Siliguri plant, presently, we are operating at around 70%-71% capacity. So we hope we will be able to utilize it fully. So this is our focus area at this point. Okay. And in terms of pricing, like you've already mentioned, that your prices were stable in the last quarter. So in the Northeast region, how do you expect these to move forward? As far as if you talk about short run in this quarter, I feel it will remain stable. For the next quarter as well? Next quarter, let's see how it turns up. But presently, I can tell you in this quarter, it will remain stable. Okay. Okay. Thank you. Thank you. Before we take the next question, a reminder to participants. That you will press star and one to join the question queue. The next question is from the line of Prateek Kumar from Jefferies. Please go ahead. Yeah. Good afternoon, sir. My first question is on your regional volumes. So northeast volumes have grown around 30%, while east volumes are sort of flattish year-on-year. Any logistic challenges which is resulting into evacuation of volumes, or why the east volumes are sort of flattish? No. There's no logistical challenges as far as Northeast is concerned. We are well-placed in supplying to the market demand. Our markets didn't grow, or we lost some share in these markets because our. No, no. Absolutely, we have not lost share. We have market share in quarter one. Okay. And on CapEx, you said you have incurred INR 750 crore on your expansion projects. Was this all in first quarter? I mean, full year, a CapEx expectation is INR 1,500 crore for FY2024 and INR 400 crore for next year. Is that it? Yeah. I think the INR 750 crore CapEx which has been incurred has been incurred over the last 2-3 quarters, not only in quarter one. The INR 800 crore CapEx that we're talking about for the rest of the year will also be split across the next 3 quarters. Of course, after that, we'll have a CapEx of about INR 400 crore, INR 400-INR 500 crore on the Silchar plant. So FY 2024 CapEx would be closer to INR 1,200 crore in that case, and followed by around INR 500 crore for next year? Yeah. So it will be about overall, it will be about INR 1,000 crore-INR 1,100 crore for this year, and then followed by about INR 400 crore-INR 500 crore for the next year. Also on the Northeast demand, there have been a series of new projects or new orders which have been released in your market. Is this something which is showing up in non-trade demand for the region, or exclusively? The demand has been good. The demand has been good in quarter one. As I said, we are focused more on trade, and we have remained focused there. In our mix between trade and non-trade, our trade mix have improved by further 2%. So presently, we are focused there. Yes, there are projects which are coming up. Hydropower projects are coming up, which is a big cement guzzler, I'll say. So we'll focus on them at the right time. Presently, our focus remains on trade. But is this non-trade growing so fast, which all companies is there a significant infiltration from outside companies which are servicing these non-trade projects, or if we are not focusing on it? No. There are local players who are also servicing the non-trade projects. It's not outside companies who are servicing it. There are players who, for them, it makes sense. So for us, it makes sense to be in trade at the moment. For them, it will make sense to be in non-trade. There are outside players also. Earlier, also, it was coming. Presently, also, the outside players keep on coming into that market. So that's happening. So it's fine. Not a big threat or challenges now. What would be outside players in your overall market of 12-13 million tons of sales? What would be outside players' market contribution now? It ranges around 12%-15%. Okay. My last question, there was this a few years back, there was this initiative around coastal waterways used for cement transportation. It was sort of a slow start, but has that picked up in any material way for movement of your volumes or someone else's volumes in your region? No, not really. No. No updates as of now. We don't have any updates on this development. Thank you, sir. These are my questions. Thank you. Before we take the next question, a reminder once again to participants to press star and one to join the question queue. The next question is from the line of Parth Bhavsar from Investec. Please go ahead. Yeah. Hi, sir. So thank you for the opportunity. Sir, I had this one question on strategy. Let's say that once all the capacity that we are planning to come up with by 2024, those come up and they are utilized at a very good level, let's say 60%-70% over the next 2-3 years. Are there any plans to go outside East, Northeast? What regions would they be? If I just our present capacity, actually, we are focused on Northeast. Taking these material from these capacities to outside Northeast, it's not something which is a brilliant thought because the cost economics doesn't work like that. So present capacities, if we go outside Northeast, we need to have capacities at the right place. Our current capacities are focused on Northeast. And as I said, we will definitely be expanding into the outside Northeast in the markets of Bengal and Bihar, whereby we are working on our Siliguri plant to make it more viable so that we are able to utilize it as 100%. Apart from that, we are not thinking about any other market as of now. Yes, sir. I meant that only. I didn't mean that you move material from Northeast and East to other regions. But we don't currently have any plans to maybe set up a capacity in South or anywhere else. No, no. Completely. So I think, of course, after setting these capacities for the next 3-4 years, we would be fulfilling our demand for Northeast from these capacities. So we are actually actively participating in auctions, trying to find mines outside Northeast as well in areas like Chhattisgarh, which will be a natural continuation to our market from Northeast. We are also actively looking at the acquisition opportunities which are coming up in the industry. Of course, bigger companies like Sanghi would be something which we won't be too interested in because it would be too big for our P&L. But smaller opportunities, we are definitely looking, and we are exploring. So we are participating in mines. We are very keen in taking a mine in the eastern region. But also, we are trying for mines in other regions. We are interested in acquiring something which can fit our size. Okay. So maybe something as small as maybe 1 million ton or 2 million tons, maybe? Yeah. Yeah. So I don't think at this point, we'll want to go anything more than a 2.5 million ton, also because the competition for something which is more than 3 million, 4 million ton is immense in India right now because of the bigger companies kind of fishing out for all these companies, smaller ones. So our target range is about 1-2 million, 2.5 million kind of a company. Okay. That's it, sir. Thank you so much for answering. Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead. Yeah. Hi. Good evening. Thanks for the opportunity, though. Just on the regional dynamics, so we see that Dalmia has announced a large expansion, actually, there. So in that context, I just wanted to understand what kind of impact you think it will have. Northeast, if I'm not wrong, is close to 11-12 million ton market right now. And this is almost like a 20% expansion in the region there. And you also are coming up with your clinker expansion. So how do you think market dynamics will shape up in terms of capacity utilization and pricing and all that? So I think it just depends on how fast the market grows, right, to accommodate that capacity. And I think the market is behaving fairly in terms of growth. So I think if we continue with the same pace of growth, then I think it should not be too big of a problem. Also, our capacities are coming up much before Dalmia's capacities are coming up by almost a year. So I think that one year would also give us more horizon to actually attack more or to get more market share. So from that perspective, I don't necessarily think. And by the time Dalmia's capacity comes, the market would have also grown. So, I think it is. I think, given the prospects in the Northeast, given how the non-trade is behaving in the Northeast, given how there's so much potential in the Northeast, I think it shouldn't be, in the longer run, in a 3-4-year horizon, I don't think it seems like a major problem. Isn't the current capacity utilization below 80% for the region? No. So I think we are looking at from a perspective we are also including we are also including outside Northeast when we talk about capacity utilization in our numbers. So if we only talk about the grinding capacity in Northeast, then we are actually exhausting our grinding capacity right now. And that is the reason why even the CEO was mentioning that we are cutting down on the non-trade. That is mainly because we do not have clinker at the moment, right? So we are trying to serve our trade markets. And as soon as we get a clinker plant, then we'll also get into the non-trade market aggressively. Okay. And just one last question. Generally, the blending ratio in Northeast is also low, right? I think it's close to around 1.3x in clinker. So how much scope is there, generally speaking, for that number to go up to, let's say, 1.5x or so what we see generally for other regions? So you mean the Clinker factor, right? Yeah. The Clinker factor. Yeah, sir. Yeah. Yeah. So the clinker factor, I don't see. I mean, the more trade you sell, the lower would be your clinker factor. And the more non-trade you focus because non-trade is mainly OPC, that's where your clinker factor starts increasing. So right now, of course, our non-trade is 12%. Out of that 12%, I think only 8% of the 12% will be OPC. But when we do get our clinker capacities and we have grinding units, we'll also have to serve the OPC market or OPC non-trade market, which we are not serving right now. So you can expect a little increase in the clinker factor, but I don't think there'll be any substantial increase then. After the capacity. After the capacity. Okay. Okay. I'll come back in a second. Sure. Yeah. Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead. Thank you. Sir, last time, talk about 12.3 MW WHRS that we started but could not use much in terms of the cost-saving benefit. So have we now started getting the benefits? Yes. So we actually started our WHRS properly in quarter one. So out of the 12.3 megawatts, on an average, it generated about 5.6 megawatt-hours for us, which was much lower than, of course, the capacity. But it is also because we were stabilizing the kiln and the WHRS over the last three in the first quarter. Now that it is and even though it ran at half a capacity, it still made a savings of about INR 9 crore for us in quarter one. Now in quarter two, it has been running well. It has been running on an average of about 10 megawatt-hours, 10-11 megawatt-hours net. And I think from quarter two, it will start reflecting. Okay. So we can see INR 40 crore-plus kind of a saving for this year. Yeah. Going forward, I think we will be seeing that saving. Of course, this quarter, we're also having a shutdown, the annual shutdown. So probably it may not reflect in our numbers as much. But from a WHRS stabilization perspective, the WHRS is stabilized. It is running at about 10-11 megawatts. And also, the cost, the price of power has also increased. So given all those factors, yes, we should be expecting that this year, we should be saving at least INR 45-50 crores from WHRS. When we say the power cost has increased, so what's the agreed power cost now in Q1? So I mean, different plants have, of course, different costs, right? But on average, for Guwahati, for example, it has increased from 6-7.25 INR per unit, right? In the clinker plant, we normally produce our own power. But because the coal prices were high, so, of course, the cost of power was also high. So those were the factors that led to a higher unit price of electricity. Okay. And sir, now our net cash, I believe, should be closer to INR 300 crore. So with the CapEx that we are doing and you already mentioned, I think, INR 500 crore kind of a net debt we will be taking. So on a peak level basis, previously, we have talked about that the INR 500 crore net debt would be the peak. And that, of course, the expansion in one year, we will be able to repay. So that remains intact. Yeah. I don't think we'll have to go for higher than INR 500 crore. We do expect to pay that INR 500 crore by the next year. Okay. So then again, we have a kind of a zero date by end of FY25. Sorry. Can you repeat that? By end of FY25, we will be having a zero date. Yeah. I think by end of FY25, we should be very close to having a zero date. Okay. Okay. Okay. Got it. Okay. Thank you. Thank you. The next question is from the line of Rajesh Ravi from HDFC Securities. Please go ahead. Yeah. Hi, sir. Good afternoon. My first question pertains to this CapEx. Could you, again, detail what is the total CapEx outlook for this financial year, and how would they be stacked across this project? The CapEx outlook for this year the CapEx outlook for this year would be basically about INR 800 crores, as was told on the call earlier as well. It is basically stacked between two projects, which is the Clinker plant of 3.3 million tons and the grinding unit of 2 million tons in Guwahati. For the Clinker plant, we have already incurred a CapEx of about INR 580 crores. For the grinding unit, we have incurred a CapEx of about INR 142 crores. I think the INR 800 crores would be just adding to these two CapExes to these two plants. This 580 and 240 is still FY23? Yes. So this 580 and 142 is still quarter one. Okay. Till quarter one, you have incurred almost INR 720 crore. INR 800 crore more would be spent on these two projects. Yeah. And additionally, what other CapEx, how much would be maintenance CapEx and other, so total CapEx outgo in this financial year? So the total CapEx outgo in these two projects would be of about INR 800 crore, how we spoke about. Besides this, we have two smaller projects as well. One project is of AAC Block, which is also part of the Guwahati expansion, as part of the subsidy that we are going to get in Guwahati. So that is coming up. That is a CapEx of about INR 40 crore. Then we have a solar plant of about 25 MW, again, on which we get a SGST benefit of 100%. So that CapEx is of about INR 80 crore. So those two CapExes will also be coming up this year. So the overall CapEx, besides the cement expansion that we're taking up, would be about INR 950 crore for this year. Okay. Maintenance would be how much beyond this? I'm sorry? Maintenance CapEx beyond this INR 950 crore? The maintenance CapEx would be of about INR 80 crore-INR 90 crore. Okay. Okay. And sir, this project CapEx size remains same, this INR 2,300 crore for the total across the Clinker and the two grinding units? Yeah. So the number that we discussed last time remains the same. I think, yeah, I think there would be some reduction that may be possible, but it may be hard to comment. But it's really not exceeding the budget that we had set initially. Okay. Okay. Could you enumerate what sort of other cost initiatives that you're looking at? See, this WHR, obviously, you talked about is stabilizing and will start contributing significantly maybe Q3 onwards. What other cost savings when the new capacities come up, is there any benefits in terms of lead distance, fly ash sourcing, etc., which could add on to margins given that the yeah. Yeah. So one thing is, as told, our WHRS, obviously, is coming up. And the new unit is coming up with WHRS. Apart from that, as you rightly said on the fly ash, so we are planning our current fly ash procurement the way it happens. We are looking up at an opportunity to introduce the BTAP wagons, which is a concept of bringing it through a railway. I think that will bring in a substantial cost reduction on our fly ash procurement. This is a slightly long-drawn process because these wagons are not off-the-shelf available. It takes time to get them. So we are getting into that project. So that is one big project which we are hoping to which will bring down our fly ash transportation cost. Okay. Any special fly ash costing which you have advantageous position in Siliguri on Guwahati, etc., which you're looking at? Yeah. So presently, we are looking to put up a BTAP system for our Siliguri unit because here, as I told, we are working pretty hard to bring down our cost of production in Siliguri down. So presently, we get these through rakes also. But the handling is tedious and cumbersome, as well as by road. But we have identified the source also, the new source also, from where we will be procuring fly ash. Northeast, as we all know, doesn't have a lot of fly ash available. So there's only one source, but the cost is not great. So we are looking into logistical interventions to bring down the cost of fly ash. Okay. Okay. Great, sir. And one last question. We hear that some players from southwest places who have recently or who have expanded capacity in East, even they have ventured in the Northeast market. So are the pricings so remunerative that it makes sense? And do you see them as a sustainable competition? For me, it's difficult to answer this. I think this question is for that player whom you are asking. Because it depends. If you see Star's philosophy is to work on margins, that's why we are consolidating in a shorter geography and trying to build up there. But for some people, it may make sense to just work on a variable cost so they travel further. So it may be a question for them, not for us. Okay. So why I'm asking? Because we have made major investments. Dalmia is also coming up with a large capacity. And while we understand there are no other regional players who would be adding capacities or have Clinker, but if there are big players from outside Northeast that they start pushing volumes in your market, will that limit your pricing and margins? I think we are well-placed to handle that situation when it comes. When we have a capacity, I think we are much better placed to fight in the market. Because I think when we get the capacities, we'll also, because we'll be getting a bigger kiln. There'll be a lot of efficiencies which come with the kiln. We'll also be getting different focus in marketing, right? We'll be also getting a lot of subsidies, which got over in quarter one, right? And of course, I'm not saying that all the subsidies get passed on in the price. But you are in a much more capable situation to compete with others who are not getting that subsidy, right? So from all that cost economics and also just the subsidy angle, your margins to actually compete become much higher, right? So from a long-term competitive outlook, I don't see companies from outside able to effectively compete, right, because of many reasons, right? And of course, they can play a game of contribution, right, where they sell at the variable cost or something above the variable cost. And that game keeps on happening in the industry, and that we can't predict. So I don't think a significant arrival would happen from outside just on that strategy. Great, sir. That's all from my end. Thank you. All the best. Thank you. The next question is from the line of Navin Sahadeo from ICICI Securities. Please go ahead. Yeah. Good evening, sir, and thanks for the opportunity. Just two quick questions. One is, how much are the incentives or subsidy amounts still receivable from both the central and state government? As on date, how much is yet to be received? It is hardly any because everything has been received. Only the last quarter of March is pending. It is around INR 14 crore. So there is nothing receivable from the government. Everything we have received. Okay. Thanks. And then when do these get restored? Because I think we're exhausted on incentives. So if you could just run through, when can we expect these incentives to get reinstated? Yeah. So basically, we have right now of course, the center is potentially planning for a new subsidy in northeast, but there's no clarity about it as to what it would be. So what we really have right now is the state GST and Assam, which we will get on our expansion of grinding unit. The state GST is basically a benefit of SGST of about 200% on the investment that we make in the grinding units of Guwahati and Silchar. And we sell about 1,700,000 tons right now. And by the time the plant comes up, we'll be selling about 2,000,000-2,100,000 tons in a ton. And you can then probably calculate what the SGST per ton would be. And you can multiply it by the number of tons, and you'll get a fairly good number. Sure. Sure. And this 200% benefit is on the SGST cap, but it's available for how many years? Seven years? Or how should we? It is available for 15 years. We plan to consume this in less than 7 years. Understood. Great to know about this. In the previous regime, or when the earlier incentives were there, they were roughly totaling to how much per ton? I mean, state GST of 14% is great. So in January 2023, basically this year, January, we had till then, we had a subsidy which was giving us a benefit of almost INR 300-350 per ton, which has gone now. So I think the quarter one results should also be read when you compare it to last year's quarter one results. Last year, quarter one, we did have the subsidy of INR 300-350 crore. And this year, quarter one, we do not have the subsidies of INR 350 crore. Still, I think the margins are healthy. Yeah. So I would read the results as that. Of course. It's really heartening to know that. Just for the sake of reputation and maybe my ignorance, if you could just give me the precise timelines for the capacities that are coming. Your first 2 million-ton grinding unit is coming by when? It's coming in November, December. The Clinker plant, which is in Meghalaya, for which we don't get any benefit, is coming up in January, February. The Silchar plant, because we already have a grinding unit coming up in Assam and because that grinding unit will be enough for us initially, the Silchar plant is coming by December 2024. November 23 is when we get the grinding unit at Siliguri? Yeah. November, December. Yeah. Yeah. November, December this year, right? This year. Yeah. This year. Yeah, yeah, yeah. November, December of 2023 is when we get 2 million ton grinding unit. January/February 2024, we get 3 million ton clinker, right? Yeah. Another 2 million tons at Silchar, as you said, comes next year, November? Yeah. Next year, December. Next year, December. Okay. That's really helpful. Thank you. Thank you so much. Okay. Thank you. Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead. Yeah. Just had a similar question. So along with the timelines, could you also just re-verify the CapEx per plant also? Unit-wise, that is. So the CapEx for the Clinker plant is about INR 1,292 crores, about INR 1,300 crores, basically. For the grinding unit, the CapEx is about INR 400 crores-INR 420 crores for the Guwahati plant and about INR 450 crores for the Silchar plant. You are buying land for Silchar. So is that done, or is it still going on? Yeah. So I think so we have purchased 75% of the land that we require. Of course, the plot of land that we're taking is also bigger so that we can also think about a second line in the future. 25% of the land procurement is still remaining. I think in a month's time, we will be able to procure it. At the same time, we have started the paperwork for applying for the EC for the project. And then I think by December, we should have the permission to start setting up the plant. And it will take about 12 months to commission the unit. Got it. Got it. Sure. Thank you. Thank you. Thank you. The next question is from the line of Hiten Boricha from Sequent Investments. Please go ahead. Thanks for the opportunity, sir. So my first question is on the incentives. You mentioned we are getting the incentives for the expansion is in only Meghalaya plant, or are we also going to get in other two plants? No. So we are only getting it in the new Guwahati grinding unit that we get and the Silchar plant that we get, the Silchar grinding unit plant that we get. Okay. So Assam will get the GST benefit of 200%. It's similar in Silchar plant also, right? Yes. Exactly. Okay. Okay. So, sir, you have given a very good bifurcation of this CapEx. So can we get how much amount is spent in each unit now? So, for example, we have a CapEx of INR 420 in Assam. How much is spent? Yeah. So in Assam, we have spent a CapEx of about INR 142 crore already for the grinding unit. For the Clinker plant, we have spent a CapEx of about INR 580 crore already, right? But these CapExes will not give you a good indication of the progress of the project because a lot of CapEx and a lot of payments to the vendors happen towards the end of the project. So even though they have supplied with a lot of stuff, even though the civil has already been done, for a lot of those things will happen towards the end of the project. So probably just taking out the proportion of CapEx which has already been incurred will not give you a good idea of the progress of the project on ground. Okay. Okay. And you, sir, you also mentioned something of INR 80 crore CapEx we have done for solar plant. Can you please repeat it? I just missed that part. Yeah. We are planning to set up a 25-megawatt plant for our grinding units in Guwahati. We have right now applied for a SGST benefit, which we'll get on the grinding unit, on the current grinding unit of Guwahati of 100%. Suppose I invest about INR 80-90 crores in the solar plant, then I will get INR 80-90 crores back as SGST benefit in my Guwahati grinding unit. That is a scheme which is part of the government's industrial policy. We have applied for that. We are now setting up a solar plant on the basis of that. This plant is going to take next 12 months, right, to start? Yeah. I think our target is about March for this, but it may get delayed by a month or two. So I'm not in a position to really comment about exactly when it's going to start. Okay. Sir, last question is on the debt. As you mentioned, we are going to take debt of around INR 4,500 for this CapEx. Just wanted to understand, by when will this debt be coming in the books? So I think it should come towards the third quarter of this year, third to fourth quarter. Of course, we won't take the 500 in one go, but we'll start taking it from third quarter this year. Okay. What will be the rate, sir? Rate is something that we. I think that's just really negotiation. We are discussing with the bank. Maybe it did not be more than 8%-8.1%. Yeah. I think the rate will be very competitive because the debt-to-equity ratio of the company or any other parameter of measuring leverage, I think the company is pretty healthy. So I think whatever the rate would be, it will be very competitive. Oh. Okay. Yeah. That's all from my side. Thank you, sir. Thank you. The next question is from the line of Chandresh Malpani from Niveshaay Investment Advisors. Please go ahead. Chandresh, you may go ahead with the question. Hello. Am I audible? Yeah. Yes. Yeah. Thank you. Thank you, sir, for the opportunity. Sir, only one question on the Assam side. Dalmia said that Assam, as a market itself, is going at 20%-25%. So do we have any aggressive plans for inorganic growth in that region particularly? So there are though, of course, Assam is a very big market. It doesn't really have much of cement plants. The cement plants all are located in Meghalaya, right? So probably what you mean to say is that is there an acquisition opportunity in northeast so that you can also secure some of the Assam market, right? Yes. Right. Yeah. So from that perspective, I think all the other cement companies are small. They probably are not very interested in any of such activities right now. But once we get the capacity, we'll have to see how the dynamics work then. And probably if there is someone interested, we will be interested in taking them. Okay. So, sir, I only wanted to understand that going forward, the proportion of sales between outside Northeast and in Northeast, will that be favorable? In Northeast, we will be contributing more, or how is it? No. I think our focus will always be in Northeast, right, because the margin in the Northeast is much better. So the first target that, of course, the team would have would, of course, be to sell more in Northeast. Anything that we can't sell in Northeast because specializing the market too much could also lead to a fall in the prices, right? So we don't want to pressure the market in such a way that the prices fall drastically, right, because that will not be good for our sustainability in the long run. So what we would, of course, do is take the extra cement, and we'll try to sell it outside using our Siliguri plant, right? So what I'm just trying to say is that when you get capacity, we need to be patient, right, because in cement, we set capacities for four, five years. We don't set it for two years. So, of course, initially, our Siliguri plant will help us in utilizing our clinker better. And we will be focusing outside Northeast. But the first priority is Northeast. Okay. Sir, lastly, you mentioned that the gross calorific value will be coming down below 2. So what EBITDA, power and fuel, we can expect savings from this? So I mean, right now, it is about 2 point this quarter, I think it was about 2.35, right? We are talking about a INR 0.40 reduction in the fuel cost. You can multiply it by the heat rate, which is about 720. So that would be 0.4 into 720. That would be about INR 300. So you can expect and that is on Clinker. So you can expect a saving of roughly about INR 180 probably on cement. Okay. Got it, sir. Thank you. Thank you. Thank you. Before we take the next question, a reminder to participants that you may press star and 1 to join the question queue. Next question is from Rajesh Ravi from HDFC Securities. Please go ahead. Hello? Am I audible? Yeah. Yes. Hello? Hello? Yes. Yes. Hi. Hi. Hello. Sorry. Sir, last call, you had mentioned that you would be discussing on your long-term growth plans, roadmap. Can we hear anything on that front? So right now, again, at the cost of being repetitive, we are still doing it, right? We are still planning it out. There were some opportunities which were there in south and east. We are still evaluating it. At the same time, there are auction mines which have come up. We are still participating in those, and we are seeing how that fares out, right? So there are three, four different directions that we are, of course, evaluating, right, because the idea is not to only grow but to grow profitably in whatever other region that we go to. And that's what we keep on evaluating, right, because as a company which is very profit-focused and profit-conscious, right, we would want to make investments which give us a good ROI. That is where we are kind of deliberating and seeing what the best strategy going forward could be. So basically, I wanted to know, when you're looking for mines, it would be more of an organic expansion rather than what would be your preference order? Grow organically, you get some mines and build your capacity over there, or acquisition would be a? See, it just depends on, see, one cannot just keep on sitting for acquisition, right, because acquisition opportunities are limited. And at the same time, when they do come, there are a lot of people who probably may be better placed in bidding for it, right? So, for example, the Big C companies in cement, the ACC Cement, Ambuja, UltraTech, they're much bigger in kind of bidding a more favorable bid for such acquisitions, right? So I think the idea is, of course, to be looking at mines, to looking at organic opportunities which we can probably not will not pan out in the next one year or two years but will pan out in the next three, three and a half years. So we are looking at those opportunities as well, right? We are also looking at smaller opportunities of acquiring which the bigger ones will not be too interested in, right? And that homework keeps on coming. It's a long process of actually convincing someone to sell, right? So I think we are in that process. And yeah. And then we are also looking at products which may be very close to cement, like AAC blocks. We are getting into AAC blocks. So we are looking at other products which may be having a bigger market that we can enter which are very synergetic with cement. And that is also a theme that we are working on, right? Right. Sir, our last question on the CapEx, the total CapEx size is INR 2,200-odd crore. Until FY23, you spent something like INR 450 crore. And this year, you're targeting INR 800 crore. So the pending amount would be shifted into FY25 because from last quarter guidance, this year, the guidance was a higher number? Yes. So basically, it is mainly due to the Silchar plant, right? So earlier, the guidance was that we'll get the Silchar plant by July, August next year. But because the Silchar plant, we have delayed or it got delayed because of the land acquisition. So, of course, the CapEx has become more favorable, which I don't personally mind so much because we already are getting a grinding unit in Guwahati, and that will be able to serve the market for at least the one year. So by delaying it by 4-5 months, it also reduces the pressure on the debt side, which I don't think is there in any which ways, but it still eases it out further. Got it. And, sir, this solar power plant, INR 80 crore, which you're investing, you mentioned that you're getting different incentives. Why I'm asking this is because most players outside Northeast players prefer to go through a JV route where 25% is with the other party and 25%-26% is by the cement company. Whereas here, you're going 100% captive. Yeah. Because I'm getting a subsidy on it. My economics work very differently from their economics. Correct. So it's a different economics you're getting. Yeah. Basically, they're doing a group captive model, right, where they invest 26%, and then in the next fixed rate, they'll get a power at INR 3.5 or INR 3 or whatever, right? And our model is very different, and our model can only work when we do the entire CapEx, right, because it is a SGST refund on the investment that you make, right? So we have to make that investment to get that refund. Okay. Great, sir. That's all from my end. Thank you. All the best. Yeah. Thank you. We'll be able to take one last question. The last question is from the line of Navin Sahadeo from ICICI Securities. Please go ahead. Thank you for the opportunity again. So just one last question. In the earlier comments, you said the intent is to increase the sale beyond Northeast market. I was just checking. From your clinker plant to Siliguri itself, I think the distance is a huge 670+ km, so to say. And from there on then, to reach out to the other markets, which is Bihar or West Bengal, would be that much more. So without, let's say, freight incentives because I would like to believe in the reality, and the cost of freight could also be high. And I don't know if prices are that much more remunerative, at least what last I know, for someone to travel all the way because prices are remunerative in east and incentives also. So that's where you'd make a very good EBITDA per ton. But just to understand this, will it really give us that extra some delta given the huge lead distance, or we will need some help from the government in terms of freight subsidy to travel the distance? Thank you. So there's no freight subsidy as such. Presently, also, we are operating our Siliguri grinding unit at close to 70%-71% capacity utilization. And we are already doing it. So we are working on other raw material because I think we are able to generally, the grinding units are located far away from your integrated plant. So that's nothing new. But the only difference is we have to move by road instead of rail of clinker. That's the only difference which we have maybe from the other players, although many players also don't have rake connectivity. So that's the only difference. So that's not going to change. The only thing which is going to change, which we said, we are working on a model on reducing our incoming fly ash cost. So we are investing there as well in that capacity to build up that capacity, which, as it happens, we'll let you know because presently, that project is under consideration, actively active consideration. And once we do that, that will help us bring down our raw material cost, which will make our Siliguri plant more cost-effective. Another thing is we are aggressively pursuing premium portfolio in the outside Northeast market also. We are working on our new premium products also, which we should hit in this quarter. So that should also happen. So we are working on various agendas, right, from the cost side to the revenue side of product category, everything, which will help us in optimizing Siliguri grinding unit. Understood. And I'm sure, Vinit, your previous experience of dealing with premium products will go a long way to help get further at Star Cement as well. So all the very best, and we look forward to your. Yeah. Thanks, Ravi. Thanks. Yeah. Thank you very much. That was the last question. I would now like to hand the conference back to the management team for closing comments. So yeah. So I don't think we have any particular comments as such, but we just like to thank everyone who joined the call and is interested in the company. And we are very excited about the next 2-3 quarters and how that shapes up. And yeah. And if there's any questions for us, you can always email us, or you can get in touch with our CFO for further clarifications. Thank you. Thank you very much. On behalf of Emkay Global Financial Services, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.