...Ladies and gentlemen, good day, and welcome to Ambuja Cements Limited, Q2 FY 2025 earnings conference call, hosted by Motilal Oswal Financial Services Limited. As a reminder, all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sanjiv Kumar Singh from Motilal Oswal Financial Services Limited. Thank you, and over to you, sir. Thank you. Good afternoon, everyone, and thank you for joining the call. Without much delay, I will transfer the call to Mr. Deepak Balwani, Head of Investor Relations. Mr. Deepak, over to you. Yeah. Thank you, Sanjiv. Wishing you all a very happy and a prosperous Diwali. It is my pleasure to welcome you all to Ambuja's second quarter FY2025 earnings call. Ambuja Cements Limited is one of India's leading cement companies and a member of the diversified Adani Group, the largest and the fastest growing portfolio of diversified, sustainable businesses. Our financial results, investor presentation, and press release are now available on the company website and stock exchanges. Joining us on this call are Mr. Ajay Kapur, Chief Executive Officer, and Mr. Vinod Bahety, Chief Financial Officer. Now let me invite Mr. Ajay Kapur to share his insightful perspective on the quarterly results. Over to you, Mr. Ajay. Thank you, Deepak. Good afternoon to all of you. I extend a warm welcome to each of you for joining us in our Quarter two and H1 FY 2025 earnings call of Adani Group cement business. We continue to strengthen our position as a market leader in the cement industry. Adani Cement is becoming stronger over time, with an intense commitment towards capacity expansion to both organic and inorganic groups, along with excellence in operational efficiency, ESG, and safety parameters. Adani Cement current market share is about 15%, with an internal target of 20% by FY 2028. To begin with, I would like to share some of the high-level highlights before I dive into specifics. Ambuja enters into a binding agreement to acquire 46.8% stake in Orient Cement Limited. The acquisition complements existing cement footprint, reducing overall lead distance and logistics costs and improving market share in core markets. Post successful completion of this transaction, our capacity will increase to 97.4 million tons, and the acquisition will be met through internal accruals. We continue to remain debt-free. Our first phase of 200-megawatt solar power project at Khavda, in Gujarat, has been charged. 70 million tons of new limestone reserves have been secured in quarter two, FY 2025. 4 million ton clinker and 6.4 million ton cement capacity is expected to commence by quarter four, FY 2025, taking the total capacity to 100+ million tons per annum. The consolidated quarterly YOY performance: We achieved a revenue of INR 7,516 crore, driven by strong focus on our micro market management strategy, expansion of our dealer networks, blended cements at 84%, increase in premium products as a percentage of trade sales by 300 basis points up to 26%. On the operational cost for the quarter, it was INR 4,497 per ton, showing a decline of 4%. This is driven by 10% decline in energy cost, owing to better fuel management and strong focus on green power. Even fuel costs reduced by 13% to INR 1.59 per 1,000 kcal, from INR 1.82 last year. The transportation cost declined by 7% at INR 1,282 per ton on account of footprint optimization. Secondary rate distance reduced by 7 km to 47 km. The direct dispatch to customers increased by six hundred basis points to 55%. With the improvements mentioned on the cost front, EBITDA stood at INR 1,111 crore at a margin of 14.8% and EBITDA per ton of INR 780. As of thirtieth September, the consolidated cash and cash equivalent stood at INR 10,135 crore. During H1, approximately INR 14,700 crore has been utilized, out of which INR 12,350 crore towards organic and inorganic growth, mainly Tuticorin grinding unit, Penna acquisitions, and ongoing CapEx programs. Besides, dividend outflow of INR 555 crore, and the balance towards working capital, which we had higher receivables, higher inventory, lower payable, income tax payout, et cetera. The consolidated half yearly YOY performance, the revenues stood at INR 15,828 crore. Operational cost at INR 4,467 per ton. EBITDA stood at INR 2,391 crore, at a margin of 15.1%, and EBITDA per ton at INR 795. In the best interest of time, I will not discuss the standalone financial performance of the listed companies separately, as they are available on the stock exchanges. Now, I will share with you the progress we have made on our announced long-term strategic plan. As we plan to expand our cement capacity to 140 million tons by FY 2028, we are pacing well to achieve the stated target. This has also resulted into higher cash outflow, as informed above. With the acquisition of Orient Cement, our operating cement capacity will go up to 97 million tons, post-completion of the transaction. We are on course to commission our 4 million ton clinker unit in Bhatapara in Chhattisgarh, and the associated grinding units in Sankrail and Farakka in West Bengal, Sindri in Jharkhand, by the end of this financial year. The grinding unit of Salai Banwa in Uttar Pradesh will be commissioned in Quarter One of FY 2026, and brownfield expansion of Bathinda grinding unit in Punjab and Marwar grinding unit in Rajasthan, Kalamboli unit expansion in Maharashtra, Dahej grinding unit expansion in Gujarat, Jodhpur, Tena grinding unit and clinker unit, Krishnapatnam grinding unit to be commissioned by Quarter Three, FY 2026. With commissioning of these projects, we shall be reaching cement capacity of 115 million tons by Quarter Three, FY 2026. Further, clinker unit of 4 million tons of Maratha in Maharashtra and grinding unit at Warsaliganj in Bihar are also expected to be commissioned by the end of FY 2023, enabling us 118 million tons capacity by end of next financial year. We have also identified 13 additional grinding unit projects, for which land acquisition and statutory approvals are under progress, which shall enable us to reach 140 million tons by FY 2028. For the new facilities of 4 million ton clinker line at Bhatapara, 90% of the civil work is now complete, and major equipment has been received at the site. Expected completion is Quarter Four, FY 2025. For its corresponding grinding units in Sankrail and Farakka in Bengal, civil work of 88% and 97% respectively have been completed, and major equipment has been received at site. Expected completion of these units is by Quarter Four, FY 2025. For the new facility of 4 million ton clinker line at Maratha in Chandrapur, contract has been awarded on EPC vendor. 59% of major equipment ordering done by EPC partner. Project execution work started. Expected completion by Quarter Three, FY 2026. These clinker lines will have 42 megawatts of waste heat recovery and provision for utilizing 30% alternate fuels. For the new facility of 3 million-ton clinker line in Jodhpur of Tena, 70% civil work and 60% of major equipment ordering done. Expected completion by Quarter Three, FY 2026. For new facilities of 2.4 million-ton grinding unit at Salai Banwa, Uttar Pradesh, 26% civil work is now complete, and delivery of major equipment commenced at site. Expected completion by Quarter One, FY 2026. Major equipment ordering for roller press at Bathinda grinding unit, fly ash grinding unit and blending system at Kalamboli, and grinding unit at Dahej has been completed, and all three projects are under execution. Contract awarded for grinding unit at Marwar Mundwa and Warsaliganj to EPC vendor, and both the projects are now under execution. Now, I will share some of the key initiatives being undertaking for becoming a cost leader in the cement sector. Securing major raw materials at cost competitive prices and efficiency and productivity improvement effects will further help in optimizing by eight to 10%. First, let me discuss the steps we have taken to lower our energy cost. Our waste heat recovery capacity at the time of takeover was 40 megawatts, which we are now targeting to increase to 218 megawatts by March 2025. Currently, the WHRS capacity is 196 megawatts. We have earlier announced our investments in 1,000 megawatts of RE, which is expected to get commissioned by FY 2026, and would ensure that 60% of our power requirements would go, will be green power. This would help in reducing the power cost by INR 90 per ton by FY 2028. First phase of 200 megawatts at Khavda in Gujarat have been charged. Over the next 2 quarters, this will reach full capacity. As previously explained, to meet our requirements, we aim to have captive coal supplies. As a result, we are bidding for coal mines in the auctions being conducted by the government. A higher share of coal from our captive mines and opportunity to buy imported pet coke will further lower our own fuel costs.... Driven by better fuel management and structural initiatives undertaken, our power and fuel costs have decreased by 10% to INR 1,276 per ton in quarter two FY 2025, from INR 1,425 per ton in quarter two FY 2024. These initiatives include an increase in the share of AFR and green power. The share of AFR in fuel mix has improved to 9.5% from 7. The share of green power in fuel mix has increased to 15.6%, from 15.6% to 18.2%. The second cost item is freight and forwarding. There are three focus areas for cost reduction here. Number one, reduction in lead distance, warehouse footprint optimization, and railroad mix optimization. We are targeting to reduce the average primary road lead distance by about 100 km. Primary lead distance in the current quarter was 271 versus 272, and secondary lead distance at 47 versus 54. This has been done with improvement in direct road dispatch by 600 basis points. To further optimize our cost and logistics, we have ordered 11 GPWIS rakes, of which all 11 have been delivered and running in approved circuits. These rakes enable cost-efficient intermovement from the mother plants. In addition to these, we have also ordered 26 BCFC rakes for safe and cost-efficient transportation of fly ash from thermal power plants to our facilities. Of these 26 BCFC rakes, three rakes have been delivered and another eight are expected to be delivered by March 2025. Because of these initiatives, our logistics costs have been reduced by 7% to INR 1,282 in quarter two FY 2025, from INR 1,377 in the same quarter last year. To secure our limestone supply in quarter two FY 2025, we have won bids for another two new mines, having reserves of 70 million tons, one in Madhya Pradesh and one in Maharashtra. On ESG, we are committed to net zero by 2050. Ambuja and ACC are the only two cement companies in India who are undergoing net zero target validation by SBTi. Ambuja is a leader in water stewardship and post-processing of plastic waste. Ambuja and ACC put together used more than 5 million tons of waste-derived resources in quarter two FY 2025, embracing circular economy. The two companies created societal values for more than four point seven million people by contributing to fields like healthcare, education, employment, and sustainable life livelihoods. The company won many awards and accolades for its responsible and sustainable business practices. On global front, Ambuja has been the world's first cement company to join the Alliance for Industry Decarbonization, an initiative of International Renewable Energy Agency, became a signatory to Transitioning Industrial Cluster Initiative of World Economic Forum, and became a member of United Nations Global Compact. Finally, looking at the industry outlook, I think strong infrastructure demand and ongoing needs from the housing and commercial sectors are anticipated to boost cement demand in FY 2025. The introduction of PMAY Urban Housing Scheme, with an allocation of INR 11 lakh crore, along with government's continued focus on infrastructure development as the key to economic growth, augurs well for cement sector. Strategic investments in road, railways, along with urban and commercial amenities, is poised to drive robust growth. We expect demand during FY 2025 to grow in the range of 4%-5%. India's per capita cement consumption, currently at 275 kg, is still having a lot of headroom for a growth, and I believe over the next 10 years can reach a billion ton cement market. In conclusion, as I mentioned earlier on multiple occasions, Adani Cement will benefit from accelerated growth, lower costs, and group synergies, all of which will contribute to lead the market and achieve sustainable performance in the near future. The pace of CapEx has increased, which will help to achieve targeted growth ahead of time. With this, I now hand over to our CFO, Mr. Vinod Bahety. Yeah. Thank you, Ajayji, good afternoon, friends. Seasonal greetings and festival greetings as well. Good to connect with you all again at a very important junction in our journey of growth. When Ambuja Cements is expected to hit 100 million metric tons very soon, and by end of FY 2026, we should be reaching 118 million metric tons, very close to our target of 140 million tons, which is ahead of our own target curve. During last 12 months, friends, we have successfully completed three important acquisitions: Sanghi, Tanna, and the recently announced Orient, apart from Asian and the grinding unit of Thoothukudi. I will share more updates on the integration, which has gone very well. Friends, you have often heard from us about our drive on these few major areas with growth, cost, and ESG. Since September twenty-two, when we took control, we have been constantly achieving new milestones across the three important focus areas, which growth, cost, and ESG. Cement business has grew almost 50%, in two years, largely driven by the inorganic growth, while organic is also, going very, very well. And you have heard Ajayji, in terms of the progresses made across the various projects, which will add capacities in months to come. On the cost efficiency, in December twenty-three, we laid out our, clearly defined roadmap in terms of, cost leadership, to improve the margin, and we are well on the track. A good level of investment has been made, for this cost optimization, which will start yielding us the result in coming quarters, whether it is green power, field logistics, WHRS, AFR, operational efficiencies, among others. Ajayji already highlighted twenty-two hundred megawatt of our thousand megawatt plan, that has already been lighted up, and will start getting the green power in November itself. I'm very glad to highlight one important initiative, which we have been working on for last two years, but now getting more prominence, is digitization. From manufacturing to logistic and sales, we are putting a comprehensive technology platform, which is expected to bring commendable difference the way we are operating in the business, and it will help further to bring improvement in productivity and efficiency. On the governance part, friends, again, I'm happy to share that we have we had appointed Grant Thornton to do a detailed independent review of the RPTs and the entire framework around it. The report has been shared. Very satisfactory report, which has been shared with the statutory returns, the audit committee and the board, and it only reinforces the systems and processes which we have placed, and we have been highlighting to you from time to time. In addition, if you remember, in March quarter, we had also used IiAS for the assessment of the governance area framework, and I'm glad to highlight that we had scored a good in the overall say band from them, which is a 60 and above score. And this is what, for example, many of the leading corporates of India share this kind of say score. Ambuja has scored in that. We also won Golden Peacock Award from the Institute of Directors, a prestigious award in the field of ESG. We are the only cement company to have won this. This half year, very importantly, if you see, look at our balance sheet, you will see that we have done the purchase price allocation, PPA, for the acquired asset, which is the Sanghi and Asian and Penna. Earlier in March, we had done on the provisional basis, but now, this September, we have done finalized the PPA. And more importantly, also for Penna, we have done provisional one, which will get finalized for Q3. I will answer specific questions around it, but this is like an important half year from that perspective. Therefore, balance sheet, some of the numbers are not like-to-like comparable. However, on these two major factors of balance sheet, which is cash and cash equivalents, net working capital. On cash and cash equivalent, I began the half year first of April. I was holding INR 16,000 crore of, say, cash and cash equivalent. Then in April, the warrant program gave another INR 8,300 crore. And then the operating cash flows, net of taxes, were close to INR 60,000 crore. With this, gross amount was INR 27,400 crore. And in terms of utilization, CapEx is almost INR 5,000 crore. The investment, primarily in terms of Penna, is INR 7,800 crore. Dividend outgo was around INR 560 crore, and then the changes in the NWC, net working capital, INR 464 crore. Therefore, with all these inflow and outflow, if I look at the net figure as of now, the cash and cash quality is closer to INR 10,135 crore in Ambuja consolidated. On the net worth also, I'm glad to highlight that we began beginning of April 2024, we were at INR 50,833 crore, and I'm closing the half year at INR 59,916 crore, which is a jump of almost INR 9,073 crore in terms of net worth. Needless to highlight, Ambuja remains debt-free, and we are in the highest bracket of all the ratings in terms of triple A. Further in the network, some of the analysts have been asking, so the tangible network is closer to INR 43,000 crore, which means, all my intangibles, goodwill, if I remove, the network stands to INR 43,000 crore, which is almost 73% of my overall network. The tangible network is 73%, and this tangible network in simplified manner, it is represented by cash and cash equivalent of almost INR 10,135 crore, PPE of almost INR 29,000 crore, and NWC of close to INR 4,000 crore. So, on network and cash and cash equivalent, I preempted the question. With this, I would pass on the call again back to the coordinators, Mr. Sanjiv. Sanjiv, over to you. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the questions were assembled... The first question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead. Yeah, hi, thank you for taking my question. A couple of questions. First, on a consolidated basis, volumes grew by around 9% year-on-year, and this is on back of industry struggling at around 1-2%. So can you give more color on what's happening on this, what drove such high growth? Similarly, on the pricing side, I understand a strong pricing was also a function of you gaining or the expansion of premium products. But if I look at prices per bag, that has also not fallen a lot from INR 249 to INR 247. So any additional color on this front will be very helpful. Thank you. Yeah, Rahul, good question. Our volume growth is driven both by our current capacities and also the acquired capacities. As you know, we've been ramping up. Those capacities are helping us to fill up the voids which are there because we didn't have presence in some markets. Like, for example, Sangi itself, we take an example, last year versus this year, there's a tremendous increase. Some volume growth has also happened in the B2B segment, where again, we are not having capacities, so they have been used to expand. And therefore, you've seen on a because of premium products and also because of a very structured marketing, we've been very. Year-over-year, the drop is substantial, and we can see that. Quarter-to-quarter is not so substantial. Yeah. So just to understand this, you would have substantially gained market share on volume during the quarter. So anything different that you are doing or, was industry not that bad? How should we rule, rate this 9% year-on-year growth? So, Rahul, this also has... This is, I think, the volume is CLC. This also includes clinker sales, which happens from Ambuja to its subsidiaries and otherwise. But even if you remove the clinker sales, I think the volume is still a healthy 7%. Yeah. And as I mentioned, this is also a function of the acquisition of new assets that we have done. Some of them were not working in the previous period or working at a lower utilization. And with Ambuja ACC brands, we've been able to increase it. Okay. And when can we get numbers for Penna? For Penna is not included in this quarter, right? Part of it is. So the number of very, very small quantity of Penna. Almost forty-five days of operations of Penna, Rahul, is part of this quarter and half year. So can you give us numbers around that? What would be volumes, what kind of EBITDA that you have got from Penna? Because that will not be in the base, right? That will not be in the base. We can offline give it to you. We can collect and give it to you. But broadly, like, in terms of volume, from a cement perspective, Penna has given almost four and a half lakh. But more importantly, on the clinker, Penna has helping us a lot, and we are seeing a capacity of almost 70% utilization for Penna in 45 days, and which is also helping us to meet some of the requirements of our southern plants from clinker perspective. As you already highlighted, that our sales include both cement plus clinker, right? Yeah. On Penna, as part of our integration, has went extremely very well. Within, like, a month or two months, we were able to operate at almost 70-75%. During our acquisition, we had given targets to hit, 80-85% in, say, three years' time, but I see that we will be able to achieve much before that. Yeah. Cement volume for Penna would be in the range of one to one and a half lakhs. Sorry, so earlier, what was this, four fifty thousand, That was with clinker, you see. That's including clinker? Yeah, yeah, yeah. And excluding clinker, it would be around one fifty. Around one lakh, around one lakh odd. Okay. So just a clarification, I'm sure other participants would have similar questions. If you can help us more details around what kind of numbers were consolidated from Penna during the quarter, that would be very helpful. Thank you, Ajay. Sure. Thank you. So we move to the next question, please? Yes, sir. Thank you. The next question is from the line of Navin Sahadeo from ICICI Securities Limited. Please go ahead. Yeah, good afternoon, and thank you for the question. Also, congratulations on the set of numbers. So, I have two questions. First is, I just wanted to get a better sense of now the cash that we have, which is already mentioned, of course, at 10,000 odd. But from a Penna perspective, also, that the cash which is lined up for Orient, assuming the open offer gets subscribed fully. So in that context, what kind of appetite do we still have from an acquisition perspective is what would request some color on. Are we open to doing further similar size of Orient kind of an acquisition? Or, or here on we could be looking at more smaller side of acquisition. How should one look at it? So, Naveen, very good question. First of all, you'll appreciate, both are very strategic acquisitions, and they are helping us, both in, as I mentioned in my opening, improving cost efficiencies, but also improving volume, because these are two big drivers of, value. Now, I think we are currently focused in completing, Penna. It's a very good asset, multiple, you know, tasks ahead of us and Orient. So I think our hands are quite full right now with these two. Having said that, I also mentioned in my opening that we are building three kilns as part of our expansion, two which we had already started and one is part of the Penna. So about 11 million tons of clinker and twenty, twenty-two million tons of cement is already underway. So I think that with 10 million of Penna, 8.5 million of Orient, 18.5, and add another 20. So I think we're already having a substantially low cost new expansions happening. And I laid out the roadmap, right, up to 118 million. 118 minus 140 leaves only 22. So I think that also, as I mentioned, we have plan in place. With all these consolidations, our balance sheet and also the strength of annual cash generation goes up. In spite of all this, at the group level, we remain healthy, cash positive. And I think, generally, we don't comment on future, so I think I'll leave it at that. Maybe that's for some other day, some other time. Navin, like, in terms of, in my remarks, I said net worth of almost INR 60,000 crore and debt-free leaves enough opportunity for expansions on both organic and inorganic. So just... I will just rest myself here, but you can understand the strength the balance sheet has. Okay, helpful. Second question, I'll put it on Penna. If you can just walk a little bit further in detail here, because you gave volumes, which is around 100 KT for cement, but you also said it was supporting significantly in terms of clinker to some of the southern plants. So from an incremental perspective, what kind of volume, first of all, can we expect from Penna? Because that I'm assuming would be fairly stabilized as of now, or does it continue to support more clinker to other units? So just wanted to understand the actual cement contribution that one can expect from Penna. And also, what is the cash now that is yet to be paid? Because your presentation says about 7,800 odd is the amount allocated. The deal, as we understand, was INR 10,400 crore. So the balance amount, how should we look at that then? Thanks. Yeah, I mean, so, what I'll do is, allow Vinod to address the cash part. But let me first address your question on Penna. We're very happy with the Penna ramping up. In fact, our clinker, all the, kilns, have operating at near 85-90% utilization levels. And, we are also doing some, you know, small, adjustments because the plants were not running earlier. But we are very happy that already we are producing, almost at 80-85%, and hopefully by the time we close this year, we'll be hitting 95%. And obviously, that clinker is, helping, some of our grinding units, in South, and, that will play out. Parallelly, the demand, and the sales teams are working. I'm confident in the next quarter, when I come in front of you, the sales of Penna would also be quite healthy, and it's going in the right direction. I think we are more or less on track as far as sales are concerned, but for the right reasons, I cannot comment on what's happening this quarter, which I can only comment when I meet you for the results for the next quarter. Vinod, like, could you just throw some light on the cash? Yeah. So, Navin, on the cash, the CapEx, if you remember during announcement also, we said there are under construction assets, Krishnapatnam grinding unit, which is increasing from two to four million tons. Also, the ongoing CapEx at the Jodhpur, the Marwar project of Penna. Both of them are progressing very, very well. And the remaining outflow will happen with part of the progressive milestones to be achieved. That is how it is planned, and which is very much part of the overall transaction. So, your observation is right. Yeah. To summarize, by end of 2026, this entire INR 10,400 crore would have got consumed. We have paid about INR 7,800 odd. Now, absolutely right. So as I said, it, as per the current plan, the milestones are laid out. Now, if it is twenty-six or if it is little, three months or four months here and there, but, the progressive payment will be made once the, seller achieves the target. Understood. Thank you. Thank you. Thank you. The next question is from the line of Raashi Chopra from Citigroup. Please go ahead. Thank you. Just... I want to just, come back to the volume question. If you were to exclude the acquisitions, the volumes from the acquisition on a year-on-year basis, what is the growth or what is the organic volume? This for 14.2 million. It would still be around 5-5.5%, Raashi. Just pure, plain, organic volume? Yeah. Yeah, yeah, yeah, yeah. Okay, on the Very, very, very clear for us in future also to break this up, because as you know, we use ACC and Ambuja two brands, Raashi. And whatever we buy, we try and sell in these two brands, because these are premium brands. It also helps us in improving our market position. You've already seen in the pricing, you know, when we start selling in these brands, we do premium pricing. It gives us that extra leverage. So I think as far as we are concerned, we'll continue to report the numbers the way we are. Of course, if needed, we can certainly deep dive with the details on more detail, but I think we will continue to, because we'll keep buying and we'll also be building our own new capacities, right? Right. So it's difficult to then differentiate. And then, in any case, it's a subsidiary of Ambuja, so it will anyway get subsumed 100% in Ambuja Consol. ... Right. Okay, thank you. Also on the pricing front, after the quarter, how was prices done? Beg your pardon? How is spot pricing versus the quarter, cement? So let me comment more on, you know, the scenario and I think demand is now opening up, with the rains behind us, elections behind us. Diwali, hopefully brings a lot of goodwill and good luck. So I think demand has started opening up now, in short, and I think, in our guidance, we have said that we're expecting, for the full year, FY 2025, 4-5% growth. You already know first half the growth has been tepid, so obviously we are looking at a growth, in the range of 8-9%, going forward. And they were a yearly average of around 4-5%. The early, offshoots of demand, we are already seeing, that the pre-Diwali demand has been good. Hopefully, this continues post-Diwali as well. And I see no reason because the eleven lakh growth program on infrastructure, all the other initiatives the government is driving, there is a stable policy regime. And I think that because of elections and also heavy rains got disturbed in the first two quarters. I don't see any reason why it should not really bring that the spirit which we are seeing earlier also, except for these two quarters, which are an aberration. So have you seen prices move up, like, starting to move up? Pricing is a very tricky question. I think demand is good, things then settle down, and I don't want to get into this discussion, you know, for various reasons. Sure. No, just one last question. On the cost reduction five hundred target that you had, how much more is remaining from here on? A lot more, a lot more. We are on track. Again, I laid out all the. See, end of the day, five hundred or four fifty is a result of certain inputs. The initiatives multiplied by the savings per initiative. I have laid out, and every time when I come before you guys, I clearly lay out what is the progress. So I very clearly detailed out on coal mining. I laid out on green power, I laid out on waste heat recovery, thermal efficiency programs, acquisition of new assets and optimizing it further, increasing capacity utilization, increasing productivity, you know, doing more direct dispatches, improving our warehouse footprint, going for our own rates. In future, going for more ships for the Sanghi fleet. When you add all this together, the whole number of 450-500 comes in play. We already reduced a cost almost to 250, which was, of course, slightly higher, I think, when we acquired the businesses. But I believe we are very well on track and every quarter, every year, you will see this journey going towards that end state objective. We emerged one of the most cost-effective producers in the business. So Rati, also, like in my opening remarks, I highlighted that, somewhere like in December 2023, we had come out with this whole program of cost, and it is just like, almost about a year from there. And March 2028 is what, for example, we had put our aspirations to achieve those numbers. So we are very well on that journey. And, with every progressive, like, our investments have been made substantial, and the results will start coming in, as I said, from coming quarter itself, from, say, December, when we start getting green power to the sea logistics, for example, we are placing orders for the vessels to double, which again, investments have been made and so and so forth. I think that you will see it is not going to be back-ended. It will be like progressive with moving quarters. That's fine. Thank you for the detail. I just, I think, just to be more clear, what I'm trying to ask you that how much of the five hundred has already happened? Is it hundred, is it hundred and fifty, or we still have, like, the entire five hundred to go? I would say 25 odd% has been achieved, 25% to 30%, but this is again, as of now, our assessment. Safe to assume say INR 150 odd has been achieved. Got it. Thank you. Thank you. Ladies and gentlemen, ladies and gentlemen, in order to ensure that the management is able to address the questions from all the participants, please limit your questions to one per participant. I repeat, please limit your questions to one per participant. Thank you. The next question is from the line of Ashish Jain from Macquarie. Please go ahead. Hello. Hi, sir. Good afternoon. Sir, my question is, again, you know, pertaining to volumes. I know you have answered it. Just wanted to ask, it also includes the benefit of My Home, this quarter, right? Yes, yes. Tuticorin Tuticorin, yes. But you understand Tuticorin is only a grinding unit, right? It needs my clinker. Right. So it's basically, I think it includes that also. Whatever we are paying up, whatever and wherever we are investing capital, we have to make sure that the capital at charge is delivering its returns. And you can see in our growth that our growth strategy is clearly in line with our stated objectives. Sir, just to clarify, so you said, Penna did four hundred and fifty thousand, out of which one hundred thousand was cement, balance was clinker. Safe to assume large part of that clinker would have gone to Thoothukudi? No, no. The Penna clinker also goes to our own grinding units, which are there in south. And we would have done an equal amount of sale from Tuticorin also, just to answer that question. About an equal extent from Tuticorin as well. Got it, sir. That helps. Okay. Sir, secondly, you know, in terms of the pricing, so while, you know, I can see FY pricing is down and you alluded to that, means most of your peers this quarter have reported, fairly weak pricing sequentially as well. Whereas, you know, our pricing has been super resilient, sequentially. So is it like a, a mixed impact? Have we sold more in specific regions, or what has gone behind that? And, yeah, if you can just help that, help to understand that as well. I think couple of things. Number one, OPC sales slightly higher. OPC yields higher price per ton, so that is evident. Number two, as I mentioned, 6% improvement in our premium products across the brands. And number three, mix, you rightly mentioned. So I think we add all three together, we've been able to, you know, do a little better on price. But as I said, year-on-year, it's still quite a harsh, you know, number because it's such a strong, you know, 9%, 10% decline. All the work you do on cost, then of course, you know, some of it gets into the lower slot more. Right. Sir, lastly, you know, just one question on capacity expansion. So, you know, last, say, two, three quarters, we have done a phenomenal job in terms of the inorganic growth that we have achieved. But our, you know, end capacity target has, you know, largely, remained unchanged. You know, while we have spoken about building a lot more capability in terms of, limestone acquisition, you know, and various other project initiatives. So should we, you know, think that, you know, fiscal, post-fiscal 2028, we will remain in an accelerated expansion phase, even let's say from 2028 to 2031? Or, you know, what kind of number should we think? Because, you know, while we are adding capability, we are also acquiring a lot. Just want to understand, you know, how capacity could look, let's say, slightly away from 28 as well. Ashish, you know, we have been very consistent in our message of doubling our capacity from 67.5 million in September 2022. That's the day when we had bought these companies, and our chairman had given this, you know, in his first speech post-acquisition, that we will double by 2028. We remain committed to that target. Should there be a need to revise it in near future, still 2028 is a little far away, we'll certainly come back to you. As of now, we are fully committed to make sure that, number one, we deliver on our promise on cost. Number two, we deliver a promise on growth. And number three, we keep the highest governance on ESG. And number four, as of now, we are debt-free, and we hope to remain debt-free as part of our expansion. These are the four stated objectives. We stay, remain steadfast on that. Whenever a good opportunity for acquisition has come, we have taken it. I guess that from the past track, you can more or less project how we have acted and how we have reacted to the changing confluence. Yep. Great. Great, Great, great. Got it, sir. Thank you so much, and have a nice day. Thank you. The next question is from the line of Rajesh Ravi from HDFC Securities. Please go ahead. Yeah. Hi, sir. Good afternoon. Congrats on good numbers. If you could mention this NSR, despite higher share of non-trade QoQ, you know, our NSR is positive, while the industry-wide, we have seen 3% realization decline. And also in your CapEx, there is no mention on the Mundra project, so on a CapEx slide. So is there any delay? And also, if you could discuss on Sanghi plant. You know, we are seeing no CapEx progress, and even volume ramp-up seems to be, you know, not as it was earlier in... You know, when it was acquired, the plan was that the ramp-up would happen fast. If you could share some detail on these, that would be great. Thank you. So let me address your concern on CapEx. First, let me address your concern on price. As I mentioned, we have had substantial decline YOY. Quarter-on-quarter, our premium product percentages have gone up. Number two, I mentioned, we moved some OPC sales in bulk. In OPC, the prices are better there. Number three, also the mix. So I think that's the reason on the quarter-on-quarter. On your question on Sanghi, we had a very severe monsoon, and you know, impact of that was very severe in Mundra area. In fact, almost for two weeks, the plant was flooded. Post that, what we have done is we have two kilns there. One kiln is fully refurbished, restarted, and now it is running the new kiln. The line two kiln is now fully running at peak capacity. The line one kiln is now under maintenance, and this is undergoing the entire refurbishment. This is part of our planned, you know, strategy. Correct. I believe in quarter three and quarter four we should start seeing Sanghi clinker production coming at almost near full production. With that, we'll transfer it into cement as well. For Sanghi, we also had to do some work on the channel, so we have finished that work. We are now starting our marine expansion plan there, so that will also be part of this strategy. Mundra remains on track, and I think we should be commissioning this project somewhere in 2026-2027. Again, phase one for grinding unit is already started. Also the clinker line, we are expecting somewhere in 2026-2027. The Sanghi, what is the end plan? 15 million ton, which you are targeting. When would that be taking, you know, taken up? Sanghi, second kiln, we'll announce in due course. We are, as I speak to you, in the process of getting environmental approvals. Mm-hmm. We are in the process of also getting the jetty expansion, and we're also in the process of placing orders for ships which are needed to transfer across coast. ... We are also building, fortifying our position across the West South Coast with grinding units and/or, bulk cement terminals. And at some stage, Sanghi will stop and, Penna will take over through its BCTs, from Krishnapatnam onwards, right up to Cochin, Nizamabad. So I think the whole strategy piece is being worked out. Correct. At some stage in future, you will hear from us in a much more detailed, you know, investor deck as well. But give us some time, we'll certainly be sharing with you. Yeah. Yeah. Just to highlight, the investor volumes is wrongly mentioned in the Q2 PPT. I think that the given number is just what is got printed again. So if you could share that investor volumes. Okay. Thanks, thanks for bringing it on, and our speaker will address that. Sure. Thank you. Thank you. The next question is from the line of Indrajit Agarwal from CLSA. Please go ahead. Hi, thank you for the opportunity. Most of my questions are answered. I just have one question on the cash flow. There's a sharp increase in other current assets and other current liabilities, if you can... Or cash outflow because of these two items. If you can please highlight what cost asset items led to this increase? So, Indrajit, in my opening remarks again, when I highlighted, so there is an overall, say, utilization of closer to, say, INR 4,100 crore, which is part of the net working capital. And in the net working capital, there are various assets, right from inventory to receivables. Ajay-ji mentioned about increasing trend of the OPC sales, and typically, as you know, that this leads to little increase in the receivables. Then what we've also done is piled up a good level of inventory for coal, given that the prices of the coal has been substantially lower, and then we actually have used the opportunity. As we speak, I'm holding almost sixty-five to seventy days of inventory of coal, and which will give me the benefit in time to come, so we have been opportunistic in terms of this, A, the trend of sales, and B, in terms of building up the inventory. Primarily, these are the two factors which we'll see increase in the current assets, which would have gone up, and then on top of it, as I said, some of the factors are not apple-to-apple comparison because of the overall purchase price allocation of Sanghi, Chittorgarh, and Asian, which has been finalized this quarter, and also provisional numbers of Penna, which has got into the balance sheet. More specifics I can offline connect separately, but these are like a few points you should look into it, and then I can address separately. Sure, sir, I'll connect with you separately, because the numbers I'm looking at are in the cash flow, consolidated cash flow. Other assets, cash out of 2,100 and other liabilities of 800. And, sir, if the Broadly in line with what I told initially, like, when I said that, opening of INR 16,000 crore to closing of INR 10,135 crore, I broadly highlighted the major inflows and the major outflows, leading me to the net cash of INR 10,135 crore in the overall consolidated level. Sorry, I interjected in between. Sure. No, that's, that's helpful. Thank you. Yeah. Second, while our realizations have been largely flat quarter over quarter, if you can give us some broad regional trends for the quarter gone by itself? Like, where do you think that prices have declined the most, and where you have had, like, more resilient prices? I think that we can do more offline. Too much of, you know, micro-detailing at this call. Yeah. Yeah. So that's all from my side. Thank you. Thank you. The next question is from the line of Prateek Kumar, from Jefferies India. Please go ahead. Yeah, good afternoon, sir. My first question is on... So we have this notes to accounts, given in results. It says around INR 130 crore incentive that West Bengal unit. Is this a one-off, so which is benefiting also the revenues? Or is this like some incentive we will continue to accrue, like, in future period? Or how should we understand this? Yeah, so I think this is more business as usual because as part of our various incentives we make in states, there are certain approvals, and this we got a very good case in Supreme Court. Got an order in our favor, and now it's for us to encash it through the state, and we are working on that, so we have a very strong case, and therefore this is more of business income which has been booked now, normal course of business. But ideally, we should adjust this in revenues to arrive at our realization site, because this was not there in last quarter. Would that be right? So, Prateek, having out here, how, for example, like, I would look it in a normal course of business, so that is how we would calculate, but it all depends on how you calculate. But as you highlighted, this is like, very much part of the incentives which we will be getting from the West Bengal government, and this is very much part of the business income, operating income. Okay. And what is the full year incentives we are expected to get this year and maybe next year, including this INR 138 cror? So I am expecting 138 plus another. I am expecting around closer to 80-odd crores for the another project. So let us say together is closer to 220-odd cror, which I should be getting from this for this plant in West Bengal from the government. ... By the way, we have already received INR 45-odd crore in the past. No, sir, I was asking just, cumulatively overall for the company, how much we are looking to get in FY 2025 and as a run rate basis? See, quarterly, my intent is, ballpark, is around INR 250 crore odd. And therefore, like, if I extrapolate, so for a year, closer to around INR 600-INR 650 crore odd is my incentive, which I get booked in a year. Okay. Six out of 650, we had accrued INR 138 crore. Specifically, we had mentioned that's why we had made a note around it. Yeah, that- So it does. That specific project. Therefore, since there was a background to this particular item, with respect to one of the Supreme Court cases, therefore, this came into the notes from the auditors. My other question is regarding your Mundra limestone grinding plant. We have taken that out from our expected schedule. The timeline for that is, like, sort of, pushed out to later years. So how things have been done? Which plant you're talking of? Mundra. There was this coal to PVC project for which we gave some advances for that project. It's very much in the plan. As I mentioned, it is featuring in 2027, I think we should be commissioning that. Okay, and last question on organic CapEx this year. What is the targeted organic CapEx mix of the M&A? I think we have already done close to 3,500 odd crore Okay. For the first half. We're on track. Maybe there's small 10-20%, you know, slippage here and there. Some projects are 100%, some projects are... You know, sometimes because of permits, sometimes because of land. But I think by and large, we are trending, quite well. What is the CapEx number which we should expect for full year FY 2025? Prateek, our target when we started the year is closer to, say, INR 7,000-odd crore. And while we have crossed 50% milestone, another INR 3,000 to 500 crore here is what we are expecting to end with the full financial year. Closer to INR 7,000-8,000 is what we are expecting for the full year. Sure, sir. Thank you very much. Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead. Yeah. Thank you and congratulations on good set of numbers. So first, is it possible to share the MSA volume for second quarter? Yeah. Very much. Yeah. Yeah. Sure. Yes. So our total MSA volume would be around 3.7 million. Okay, got it. And second, I just wanted to understand, both in terms of the green share and, whatever the expansions that we have. What I see is, green share, last time we said that by FY twenty-five, we will be looking at, close to 31%, but now we are saying that 21%, so currently 18.2%. And for all the expansions, if I see, many projects are getting delayed by one or one quarter, so, any specific reason? See, as I mentioned earlier, there was heavy rains in, as I mentioned, more for Sanghi plant. We had a very heavy rainfall in Gujarat and Khavda area also, where our solar power is. As a result, the 200-megawatt, which should have happened two months back, is now happening in this quarter. So that's one reason. Second, at one plant, one of our waste heat plants also got delayed about two months. So I think other than that, there is no major delay. As these projects start coming in, you'll start seeing the same number, which I promised, albeit with a delay of maybe one or two months here or there. Okay. And for the, even for the, grinding expansion, the Sankrail for us. Any CapEx project, you know, so by and large, we are on track. Some projects we are absolutely on track, some projects slight delays, some projects delays are more. But then on the other hand, we are also doing M&A. So you know, what is important is with the Penna addition of 10 million, ongoing another 4 million, with the Orient addition in future of 8.5, straightaway 4% market share of tech is there from M&A itself. So I think from the market perspective, it helps us. Broadly, when we said that out of 530 odd, cost reduction, 150, we have done. So if I broadly divide and do the math up, close to INR 120-INR 125 per ton for next three year that we are looking at. So if somebody looks at from currently, 780 odd, EBITDA per ton, if it has to move up significantly, what we were looking at, close to INR 1,400-INR 1,500 odd rupees, then are we assuming a significant price hike coming in from now onwards? You know, if you look at the price, current prices are one of the lowest ever. So I wouldn't, I wouldn't make any future estimate on the current price. You'll have to make a much more analytical estimate, what is the right price and what should be the future price. Therefore, if you adjust for the normal price, and then if you look at end state cost, which you're targeting about INR 3,700 rupees, I think then the numbers you're saying are very much achievable. Okay, okay. And for sir, ACC, is it possible for full year, how much CapEx we are looking at? How much? For ACC, how much full year CapEx are we looking at? Offline, I don't think I have that number, but we can certainly give you. Yeah. So I think maybe offline we can connect, but if I have to just give you for ACC for the balance, around closer to one thousand, or the growth is what we are expecting to incur. And like some of them, for example, Salai Banwa and all are already under progress, and this would be sitting, this is part of my six million tons of GU. It has to be up and running before March 2025. So yeah, ballpark within ACC, seven thousand or close. Okay, got it, sir, and all the best. Thank you and happy Diwali! Thank you all. Thank you. Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead. Yeah. Thanks for the opportunity. So my question is around right of use assets and the financial statements. There is an entry called payment of principal portion of lease liabilities. So this number seems to be quite high for ACC. So could you just help understand what is this, what called this item and then why is it so high for ACC? Okay, while you are asking for ACC, I have the details for on a consolidated basis. I will just try and attempt that, and then maybe separately we can speak about the ACC part. So the ROU asset, which is there, closer to INR 1,498 odd crores, which is as of September twenty-fourth, and when we started, it was closer to, I'd say, INR 1,100 odd crore. Typically, Right of Use assets would include some of your long-term assets which are available to you for use. This would include the RMX assets, the office buildings, if you take it on a long-term lease, some of the guest houses which you have taken on long-term lease, and on top of it, some of the contracts on shipping or the rates which you enter into long-term leases. So that is like basically right of use of assets. So if you on an overall basis, for example, when I look at the overall, say, tangible block of assets, this is a smaller portion of the larger block, and I would say it is actually less than 3-4% of the overall, say, my block. We haven't seen any significant additions per se in six months, except as I said, around INR 500-odd crore, which is for the factor which I have mentioned. Again, please bear with me on the point that the numbers are not apples to apples comparison, given again my point that there are three companies which have got finalized in terms of their purchase price allocation, and the fourth company, which is Penna, which is provisional basis. Therefore, you have to also put the lens from that perspective. ACC, maybe offline, I can address your question. I don't have the details right now, but this was on a consolidated basis for Ambuja. So there will be a glimpse of ACC also in the same manner. So no, thanks for the explanation. And this is ACC; it's like looking like a big number. I mean, it's almost INR 700 crore for the first time, so that is why I want to understand. And although- I think all these intangible assets, basically, which is where ROU is also part of the same, and you will have this generally, like in terms of any asset which is available for long-term use is, and I would give some examples of ships, leases, to office buildings, to guest houses and likewise, right? So, yeah. So I also noticed that in Ambuja Consolidated, that number is actually not different from ACC, which means some leases that have happened in numbers for ACC as well then. No, it may have basically because the RMX items get, which are primarily for ACC, and therefore, in consolidated, you'll find delta is marginal, that between ACC and Ambuja. And when you look at ACC, let's say, for RMX, especially for the mixtures in the transit pumps, we have been a little doing our RMX business aggressively now, and this is more on the outsourcing model, wherein you will take the transit mixers and the transit pumps on a long-term leases, which will become part of the ROUs. Sure. So So and just a second question on Penna sales volume. So, is any sales being made in the Penna brand also, or it's all MSA with Ambuja ACC? Ajit would have answered, but I'll just answer on this point. Like, so for the interim period, given that there have been ongoing contracts and especially some of the government contracts where Penna was registered as an approved brand, we have continued over there. But otherwise, primarily we have used Ambuja and ACC. Having said that, obviously, the brand remains with us, and we are free to use the, that is the requirements. But yes, for certain government contracts, and some of the non-institutional, sorry, some of the institutional sales, we have used Penna brand. the MSA will be cost plus 10% or because, like, how in Sangli it was like... Is it similar MSA or will it be different? No, this in case of Penna, this is similar to what we have applied for Sanghi, which is primarily cost plus 10% kind of formula. I'm happy, by the way, that Sanghi, as I told you, has come into EBITDA positive with this formula. Otherwise, it was going through negative EBITDA for many years. Likewise, even Penna has seen a very good, healthy utilization of capacities. When we acquired, it was less than 30% capacity utilization, and which I'm very happy to highlight that now we are almost at 65-70% capacity utilization for Penna. Thanks. Thanks for the elaboration. Goodbye. Thank you. Thank you. Ladies and gentlemen, we'll take this as the last question. I would now like to hand the conference over to the management for closing comments. So I hope most of the questions have been answered. If you have any unresolved queries, please contact us. Thank you, Sanjiv and the Motilal Oswal Securities team for organizing this call. Thank you. Thank you, everyone. Again, on behalf of the management team, wishing you all a very, very happy and prosperous Diwali. Be fit and healthy and enjoy the festivals. Thank you. Thank you. On behalf of Motilal Oswal Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.