Ladies and gentlemen, good day and welcome to Q3 FY 2023 earnings conference call of Nuvoco Vistas Corporation Limited. We must remind you that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that the company faces. The company assumes no responsibility to publicly amend, modify, or revise any forward-looking statement on the basis of any subsequent development, information, or events, or otherwise. As a reminder, all participant 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 and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Madhumita Basu, Chief Strategy and Marketing Officer of the company. Thank you. Over to you, Ms. Basu. Thank you, Tanvi. Good evening, everyone, and a warm welcome to the Q3 FY 2023 earnings call of Nuvoco Vistas. I'm excited to take this call after the recently presented Union Budget of India for the next fiscal. It is very encouraging to see government's continuous trust on infrastructure-led economic growth, which is a very positive read for the construction industry. The budget underpins infrastructure focus, inclusive growth, and higher consumption, which reflects good growth. A significant increase of 33% in the capital expenditure to INR 10 lakh crore trusts to fast-track infrastructure development and 66% higher outlay at INR 79,000 crore for Pradhan Mantri Awas Yojana will translate into robust cement demand. Other factors like strong housing demand, improvement in rural sentiment, higher disposable income with change in tax slabs, coupled with moderating inflation, augurs well. Nuvoco is fully poised to capitalize on it. Looking at the economy on a medium-term perspective, while the budget itself is very promising, the India growth story also remains resilient. Various agencies worldwide continue to project India as the fastest-growing major economy, which emanates from the buoyancy the economy has seen from the seamless rebound of private consumption post the COVID era. This has also given a boost to production activity, resulting in an increase in capacity utilization across sectors as reflected in the improving PMI figures, as well as high average gross GST collection on monthly basis. Measures taken by the government and RBI, along with the easing of global commodity prices, have also managed to bring down retail inflation below RBI upper tolerance target. Given this backdrop and coming to the industry performance in Q3 FY 2023, cement demand in East has witnessed good demand growth during the quarter on YOY basis, driven by rural housing and infrastructure segment, coupled with lower base effect of last year. However, looking at the dynamics within the region, the states of Bengal and Jharkhand witnessed subdued demand growth on YOY basis, moderately impacting our overall sales volume growth during the quarter. Nevertheless, we continue to register double-digit volume growth on a nine-month basis. North region also saw healthy double-digit growth led by higher execution of infrastructure projects and rural IHP activity. North prices remained stable during the quarter. Prices in East improved in the months of October and November with the pickup in activities post monsoon and festive season. This was followed by some softness in December. Despite this, East region saw the highest price increase during the quarter among all regions, which benefited Nuvoco. Since then, prices have been range-bound with an optimism around price hikes on the back of robust demand. On the other hand, fuel costs are believed to have peaked during the quarter, and the recent softness in core prices will certainly support near-term margins. In this backdrop, we continue to progress on our near-term plans with agility while building upon long-term strategic action. We have successfully launched our super premium cement variant, Concreto Uno, which has unique water-repelling properties, protecting the house from water ingress, dampness, and efflorescence. This launch is in line with our continuous endeavor to service the need of individual home builders and enhance customer satisfaction. Just to remind, we have been continuously introducing new products throughout the year across our segments, including premium composite cement Duraguard F2S and premium quality readymix solution Concreto Glyde. Further, in line with our focus on individual home builders, we recently unveiled our first direct-to-consumer home assist app, Nuvo Nirmaan, that covers a wide range of information and guidance throughout the home-building stages. We have also introduced Tech Express vehicles to provide on-site services to our customers. These initiatives will further strengthen our brand through physical connect with the consumer and provide us necessary impetus to enhance our retail reach. We have been prudently prioritizing our CapEx on cost saving and sustainability projects like alternate fuel material handling facility at Risda and Nimbol and railway sidings. With the commissioning of co-processing system at Risda, we have initiated feeding of alternative fuels in higher quantities. Work on other projects is also progressing well. Lastly, our other businesses of ready-mix concrete and modern building materials are on a steady growth trajectory. We have more than 50 operational ready-mix plants spread across the country and further working on opening more. Our ready-mix revenues improved by more than 20% during the quarter on a YOY basis with higher value-added product share. MBM has also been penetrating well into non-cement channels in north and west regions. A quick update on our ongoing growth and debottlenecking programs. Cement capacity expansion through 1.2 million tons per annum grinding unit at our Bhiwani cement plant in Haryana is going well. Civil and fabrication advancement is on mark, and all major orders have already been released. This will take our overall cement capacity to 25 million tons per annum. Clinker capacity enhancement project at Risda and Nimbol through debottlenecking are also progressing well. Moving on to our sustainability initiatives. We remain focused on enhancing the use of alternative fuels, improving the share of composite cement, and conserving natural resources while giving back to the society in which we operate. Happy to share a few highlights. We remain steady on our thermal substitution rate at 9% sequentially, while improving 4% year-over-year during the quarter. With the ongoing investments in material handling systems, we are targeting to achieve an exit run rate of 12% by end of this fiscal. During the quarter, we added lighter aluminum body trucks for cement dispatches, an industry first. This will help reduce about 28 tons CO2 per vehicle in its life cycle by reducing fossil fuel consumption. At the same time, it will also increase the payload by 2.5 metric tons per truck per trip, additionally bringing logistics cost efficiencies. We have also introduced Nuvo Mason, a masonry skill development program which aims at enhancing the masonry skills of youth and construction workers, empowering them, expanding their work opportunities, and improving their overall quality of life. Coming to the financial performance for the quarter. Our consolidated revenue from operations during Q3 FY 2023 improved by 20% year-over-year to INR 2,605 crores with a 6% year-over-year improvement in sales volume to 4.5 million tons and better prices. As mentioned earlier, consolidated cement volumes continue to improve at double digits on a nine-month basis. We are consistently working on optimizing our operating costs through multiple levers. While our cement raw material cost increased by 21% year-over-year with higher slag consumption, in line with our thrust to sell more slag and composite cement, it helped in improving our clinker-to-cement ratio, which stands at 1.8x against India's average of about 1.5x. This is benefiting our overall cost slide through lower clinker factor. We have also been able to effectively contain our power and fuel cost sequentially with our continued focus on optimal fuel mix, sustaining thermal substitution rate, and high utilization of waste heat recovery systems. We have also started operating our CPPs at almost all the locations. Distribution costs during the quarter primarily increased with the re-imposition of busy season surcharge on the rail freight. Our consolidated EBITDA for the quarter improved by 30% year-over-year and 40% quarter-over-quarter to INR 272 crores. We have been continuously working to strengthen our balance sheet. Our net debt at the end of December 2022 declined to INR 5,165 crores from September 2022 levels. Our interest cost has also been effectively contained with an increase of about 120 basis points against the increase in repo rate by 225 basis points since March 2022 with opportunistic refinancing and debt repayments. Our CapEx spends for nine months period stands at INR 329 crores. Just to summarize before I open the floor to Q&A. The demand indicators with the government's consistent focus on infrastructure-driven economic growth, as visible in the recently announced budget, bodes well for cement demand. With higher allocation under PMAY and expectation of improvement in disposable income, we will continue to leverage our trade centricity to drive volume growth. Our CapEx priority towards diversification of footprint, cost savings, and sustainability projects are on track. We are also progressing well on our product innovation focus by rolling out quarter-over-quarter. Lastly, with optimism around price hikes, robust demand, and peaked fuel costs, margins certainly appear to be improving from here on. With this, I will end my opening remarks. I am joined by Mr. Jayakumar Krishnaswamy, Managing Director, Nuvoco Vistas, along with Mr. Maneesh Agrawal, Chief Financial Officer of the company. We are here together to take your questions. Thank 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 their 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 question queue assembles. The first question is from the line of Abhimanyu Kasliwal from Choice International. Please go ahead. Thank you so much. Am I audible? Yes, you are. Okay. Wonderful. Okay. Good evening, Madhumita Madam, and the rest of the management. Congratulations on strong performance this quarter. My question is, we can see that you have to improve dramatically on operational basis. You become more efficient. However, there seem to be little CapEx to increase your tonnage. Competitors, they are- Sorry, we lost your audio, Abhimanyu. Madam? We are able to hear you. Okay. Sorry. I'm saying that competitors are planning substantial eastern growth. I won't name a competitor. We used to listen to them a few days back. They increased 10 million tonnes in the east. Cement now we know takes two, three years for capacity plans to get implemented. I believe, do we have any plans to increase our capacity or maybe in ready-mix, or will we just depend on debottlenecking because that is expected to give us 2 million tonnes per annum growth. Are we now showing any growth in top line, or we are basically now working on improving our EBIT margins by improving our efficiency and ensuring that we're not doing much CapEx, so there's not much increase in depreciation. What is your plan, madam? Okay, thank you very much. As we have mentioned during our IPO and then subsequent quarters, one of the principal objective for the company, while we have number of avenues to grow in north, west, as well as east, as I mentioned in the last quarter and the previous quarter, our immediate objective is to pare the debt and get the balance sheet hygiene going. Like I said before, with the passing of every quarter, we will give an update about how are we going to plan the future expansion programs of the company. We have very clearly couple of projects for us to expand for the future, as we mentioned during our IPO times. Also, during the last call and the previous call, I had mentioned that the immediate objective will be to debottleneck the company with minimum CapEx and take the capacity of the company from the current 23.8 to 25 million. As we stand today in February, the kind of numbers we are looking is excess of 19 million tonnes this year. If you really look at from 19 to 25, we're looking at a 6 million tonne of headroom. We are very confident in the coming 24 months, we would be able to utilize this head space so that we are able to get the growth going for the company like the industry growth. Around the same time next year or every quarter, we'll give an update about our large-scale expansion. With the changing scenario in the market in terms of demand uptake and the pricing improvement as well as the tempering of cost, we believe that as we get into fiscal FY 2024, we will see improvement in margins and that will help us come up with expansion plans for Nuvoco. Wonderful. Thank you so much. That's all from my side. Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead. Hi. Thanks for the opportunity. Just a couple of questions. Firstly, in the presentation you've mentioned that east and north markets saw double-digit growth, but our volumes were up 6%. Does that imply some market share loss over here? That's the first question. Thanks, Amit, for that question. I lightly touched upon it in my speech. The demand scenario in east has been good. If we take a closer look at the region dynamics, states of Jharkhand and West Bengal have been a little bit subdued. Going forward, we believe that these states will also grow on a robust trajectory. We are trending 10% on a nine-month basis and will be keeping the thrust on volumes. However, I'd like to take this opportunity to mention that we will also simultaneously be working on levers such as geo-optimization and premiumization, primarily directed towards driving margins. Oh, got it. Secondly, on power and fuel costs, while obviously it is understood that there has been a significant cost inflation, there was an expectation that the third quarter will start seeing some decline in the cost. It has seen increase for you. Is there any specific reason for that? Yeah. The entire quarter had an inflated number, as Meeta said, we have peaked. I'm happy to say that as we came into December and into January, the power costs have started coming down significantly from the high levels of October and November. That was also due to the inventory which we carried from Q2 into Q3. As we ended December and into Q4, there is a more than adequate reduction in fuel cost, and we will see an improved power and fuel cost in Q4 and beyond. How much reduction can you see from here? Could you give some ballpark guidance? It will be very difficult to pinpoint the number to say what is the kind of drop. Whatever we had from April till November, then December onwards, there is substantial reduction in the numbers from December onwards. I think actually, when we come back to you guys in Q4, you will be able to see a substantial reduction in the power and fuel cost. Our alternate fuel program is also getting into a commissioning mode. As we speak, I can give numbers for this very clearly. In Chittor factory, we have touched 32%-33% alternate fuel consumption, which is one of the highest in the industry. In Risda coal factory, without the co-processing commissioning, which is happening as we speak, currently we are trending at about 10%, 11% of AFR. As Meeta said, exit December was 9%. In January, we have already hit into double-digit AFR. As we end the quarter, we are confident that we'll get a 12% TSR, and that should have a good impact in the overall power and fuel cost. Last but not least, the overall international coal prices also softened a bit. While in December we got a little bit more linkage coal, in January, with this rate shortage and rest of all the stuff, there is some reduction in availability of linkage coal. I think with the winter going away, we expect more and more linkage coal availability. The reasons for our power and fuel cost coming down will be, and as Meeta said, CPPs have started firing in all our factories. WHR and CPP will get into full swing in Q4. AFR increase to 12% exit rate, more linkage coal, and overall tempering of international crude prices. There is going to be a sizable impact in the power and fuel cost in Q4. Sure. Thanks for the elaborate reply. Just to get into numbers, what was the INR per kcal cost in Q3? Okay. Just a minute. If you see Q2 FY 2023, which we finished last quarter, was INR 2.64, and it peaked at INR 2.74. December exit is much lower than INR 2.64. Then on, I guess, that's how we can look at going forward. Got it. Linkage coal share was how much in the quarter? In this quarter, we got about 14%. Technically, we have the linkages to the level of about 25%-27%. Q2, it trended at 10%-12%, in Q3, it improved to 14. As we go forward, I expect this 14 going to 17, 18 in the coming two to three months. Got it. I will come back in the queue. Thank you. Thank you. The next question is from the line of Satyadeep Jain from Ambit Capital. Please go ahead. Hi. Thank you. A couple of questions. One, just a follow-up question on the cost. I think in the presentation you mentioned the slag prices have also gone up. Where are the slag prices now versus where they were in the third quarter? Also on linkage coal, we are hearing that there is still some tightness in availability of rakes and stuff. In the last six weeks of this quarter so far, I know you're expecting some improvement in future, but where is the mix right now for linkage coal right now compared to the last quarter? That's the first question on cost. Sorry. I'm sorry. I'm sorry. Sorry, you are mute. I'll just restart again, Satyadeep. In Q2, our slag price was INR 1,200, Q3, it kind of hit around INR 1,310. That's the kind of number. We believe that this will get sustained at similar numbers in Q4 as well. As you know, for overall, the slag availability is going to be a challenge FY 2024 and beyond. We are now started. While we are very nicely placed with our slag tie-up of close to 2.5 million from Tata Steel in our Jojobera plant, and then some one-year or three-year contracts for our Jashpur plant. We would have always a little bit of a price as well as availability advantage in slag. Having said that, slag prices have indeed gone up from INR 1,200 to INR 1,300 in the quarter. This is the kind of number we see is happening in Q4. If every company is going to increase their blended cement production going forward, slag availability is not going much higher by the industry. It's going to be a little bit of a challenge going forward. We are well-placed with our tie-ups with Tata Steel, which will give us about close to 50%-56% of our overall slag requirement comes from our long-term tie-ups which we have. Coming to the second question of linkage shortage. Yes, you are right. There is a challenge in linkage as we speak because of the availability of rake. I think our teams have done a very good job in talking to the people to find a way to move from rake movement to road movement clearance. We're able to get additional coal through road movement, which is a welcome development as far as we are concerned. However, I think we've also been pursuing with the authorities in SCCL as well as the Indian Railways to see how they can help the industry in whole, and we hope some positive response happening in the coming quarter. Okay. Thank you. Second question on the capacity expansion. I remember in the previous call, you'd mentioned that the target is to look at INR 3,000, INR 3,500 crore of net debt and then look at CapEx. You were evaluating two different options, Gulbarga and North. Have the plans been firmed up on which location you may possibly look at first, North or Gulbarga? Secondly, any development on LC3 or any studies that you've done recently on maybe expansion in Rajasthan? Yeah. Yeah, Satyadeep, I think we are pretty consistent with what we have mentioned in the previous quarters. It's very clear that the primary objective for us is to get the balance sheet hygiene going, and the numbers which you mentioned is what we are really targeting, thereabout. That's the kind of number. We cannot have a direct fixed number on it. It'll be around that number is what we are certainly focusing on. As regards where do we expand, certainly as we mentioned previous time around, which is about either the North expansion through the brownfield expansion in Chittor via with the Limboda mines or the western expansion through the Gulbarga integrated and split lines. As we speak, our preferred choice or inclination will be first North and then to West. It's too early for us to really put the peg on the ground and say that the timing of announcement we will mention in one of these calls. As I have consistently maintained in the previous quarters, every quarter we'll give an update to you. The update of this quarter is the following. The industry dynamics has improved. The overall margin profile as well as the profitability is certainly seeing an improvement. I think if the same trend continues, our numbers will improve further, and certainly every quarter I'll be able to make a positive news about what's the timing of our announcement. Till then, our objective of getting our debt levels to around INR 3,500 crores is the prime objective, then we would pursue that. Right, Satyadeep. Taking on your second question, we are very excited about LC3. Finally, there is an opportunity in blended cement for a product which is almost close to OPC level in performance. Given our trust on innovation, we have done some prototyping and the product is under testing with external agencies. We are awaiting the BIS specs release. Okay. Thank you. I will come back in the queue. Thank you. Thank you. Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead. Yeah. Thank you. Just to clarify, sir said in the opening remarks that we are looking at close to 19 million tons this year. Last time we were looking at 20 million tons. Am I right on that front in terms of the volume and the next year we were last time told about in FY 2024 double-digit volume growth. Is there any change in stand there? Thanks, Shravan, for the question. I wouldn't be pegging a particular figure that would be forward-looking. Generally, to give you the direction, nine months we have clocked a 10% year-over-year growth. We are entering into a seasonally strong quarter, and we need to understand exactly how the demand is panning out at a state level. Suffice to say that we are working on maintaining our sales trust. More importantly, we are working equally strongly on areas of geo-optimization, premiumization, and other margin improvement levers. Okay. We would not like to, or rather we would like to change our stand in terms of giving a guidance to not to give a guidance on the volume front. That's the way I should be looking at. Just to further clarify in terms of the Bhiwani, the COD, last time we said the August 2023. What's the new timeline and the couple of data points on the trade share or lead distance for this quarter, and the composite cement share for this quarter? Shravan, taking it in three parts. We are maintaining our ambition towards a double-digit growth for now. Secondly, the perspective on Bhiwani, as we have mentioned earlier, we are on track looking at early H2 of next year. I'm sorry, what was your third question? Trade mix. Trade mix. This has remained unchanged at a 71% level, same as Q2. Composite and lead distance? Let me just add one more thing to what Madhumita said. In Bhiwani, the mill share is arriving as we speak this month. The cement silos, the clinker silo, adequate progress is made. The purchases and ordering has been completed. Civil work is in full swing. Our initial target is somewhere, as Mita said, early part of H2, which is July, August, is when we want to have the dry runs and commissioning happening. We would see adequate volumes coming out of Bhiwani in H2 next year. As against the trade bit, I think she explained to you, which is at 71% for the company in Q3. The remaining data point I ask is the lead distance composite share of fuel mix for this quarter. The lead distance is approximately 340, remains more or less the same as in Q2 levels. Composite cement, I will put it this way, we are at a 1.8 cement to clinker ratio, and the bucket is punchable between PCC and PSC. Suffice to say, we are working towards a 2 million target in PCC. Okay, the fuel mix for this quarter? Can I request you, Shravan, to reach out to our office for that? Lastly, in terms of the pricing, the current prices in the month of January until now, is it average with the third quarter of what we have reported, or has it slightly gone down? As we started January, the prices are holding with respect to Q3 numbers. We're already on the end of first week, we are holding prices. In any case, as a company, as Mita spoke in one of the answers to the question, our big focus is to get our premium going, get our geo mix going, and maximize our numbers in high annuity market that in spite of whether market is giving us all the tailwind or not, that is something which we have to do through our pricing acceleration program, and that's working very well for us. The short answer to your question, is the price holding as we speak on the seventh of February? I have to say yes, with compared to Q3 numbers as well as January numbers. Lastly, CapEx was INR 329 crore for nine months, for full year, now how much we are looking at? We get close to about INR 450 crores. The overall project outlay for all the projects is close to about INR 550 crores is what we mentioned in one of the calls earlier. As we are progressing, the spends as of now is about INR 329 crores, by the end of this year, we would be around INR 450-INR 475 crores. Balance spillover will happen to fiscal 2024, all projects are on their timelines in terms of the Nimbol expansion or the Risda AFR or Sonadih railway siding or the Jashpur railway siding or the Bhiwani brownfield. Okay. Thank you. All the best. Thanks, Shravan. Thank you. Ladies and gentlemen, if you wish to ask any questions, please enter star and one on your touch-tone telephone. The next question is from the line of Surya Narayan Nayak from Sunidhi Securities. Please go ahead. Am I audible now? Yeah, Suryanarayan, please go ahead. Yeah. Ma'am, thank you for giving me opportunity. Just to understand that in terms of the rail coefficient investment in the railway sidings and locomotives, we are having the highest share, around 4.5% to gross mix. That kind of benefit is not seen. Just to understand whether Because we have to bring a lot of clinker from the Chhattisgarh area to eastern part. That is our necessity. Currently, we are also implementing a lot of railway projects. Just input, can you share the rail logistics versus the road logistic cost in your total logistics? Secondly, when the tangible benefits of those investments in the railway investments will flow? Thank you. Yeah, thank you, Suryanarayan. I'll just give a very high-level answer to you. As regards the nitty-gritties of rail versus road and PDPK and then the coefficient and all, may I request you to reach out to our investor relation department, who will give you all the information. The question specific about our expansion of siding in Jashpur and Sonadih, if you had really listened to our earlier call as well as our IPO, one of the things which triggered this project was when we acquired Emami Cement. The Risda plant does not have railway siding, and it was all the movement was happening through road movement, and all of us know road movement of clinker is much higher than the rake movement of clinker. Fortunately for us, our Sonadih plant is just about 20 kilometers from Risda, and hence we took a decision of expanding the siding in Sonadih plant so that we're able to store most of the clinker from Risda into Sonadih and for our movement through rake from Sonadih into the various grinding units of Jojobera, Panagarh, Mejia, which already have full-fledged siding. Jashpur was a place we did not have a siding. It was half completed when we acquired Emami Cement, we took a decision to put up the siding in Jashpur. When this project gets completed, we'll have, other than Risda, which does not have a inside the factory siding, the siding will be from Sonadih. On Panagarh, Mejia, as well as Jashpur will be through rail movement. All of us know the cost of clinker movement by rail is roughly about, at a full level for the company, it trends about INR 250-260, and by road it is much higher. It will have a huge benefit for the organization in terms of moving clinker by rail. Rest of the details, reach out to our teams. We'll give you all the details in terms of rail coefficient, gate distance, and every bit is available, and it'll be easy for us to explain to you across the table. Okay. Second is that the trade sale percentage is remaining the same. I mean, nearly static. Due to the slowdown in the real estate, due to the rate hike policies of the RBI. That will be going on till real estate stops on its path. That is on the macro side. That will be definitely impacting the affordable housing schemes, or maybe LIG or MIG type of projects. Though government has made substantial emphasis on this Budget, but some kind of slowdown is already visible. My point is that as we approach the election year next year, we have to do lot of the OPC sales to the government projects. In that case, the power and fuel cost will be definitely higher. How you are going to take on the market, especially when up to 2023, we are seeing a lot of investments in eastern side as well as the northern side is happening to, say, around 38% rise in the eastern market and northern market around 22%. There will be definitely market share loss on our side. How you approach the market with competition? Are we seeing lower realization going forward or how is that we will be going with the market? Thank you. Surya Narayan, I will take your question in two parts. Okay. Firstly, the opportunities which open up with the Union Budget and the run-up to the elections. The opportunities that open up will drive the overall growth, which will provide opportunity for cement industry and individual players to grow. However, I would like to reiterate that as an organization, when we have a strategic footprint for improving our trade sales, our business model is designed to take that trade share. By which I mean, we have strategically priced brands, triple brand franchise with Concreto, Duraguard and Double Bull. We have an over 16,500 direct dealers and three times the numbers as a sub-dealer base. We continue to invest in brands, not just in terms of advertising and communication, but as I shared during the short speech, through continuous product innovation, value addition and consumer connect programs like our Tech Express Vans and Nuvo Nirmaan. It is not just the opportunity opening up, but it is our commitment and strengthening of our team with the right design and support to drive high GP business. I hope that answers your question. It also indicates in our overall trade share remaining over 70%, which as you know, is significantly higher than the industry average. You don't expect these trade volumes to go down or the share of the non-trade volumes to go up. You will be definitely seeing you are not able to get a higher share in trade sales in the face of the competition. Sorry to interrupt. Surya, I would request you to please come back in the queue. Okay, thank you. Thank you. Participants, we request you to please limit your questions to two per participant. Should you have any further questions, you may join the queue back. The next question is from the line of Vishal Parekh from IIFL Capital. Please go ahead. Yeah. Thanks a lot for the opportunity. Sir, I think you briefly commented that the primary objective is to reduce debt and then to focus on growth. Over how many quarters, I think, that we are targeting to reach to the desired number of 3,500, maybe round about, because currently we are at roughly 5,100, INR 1,600 crore kind of difference is there. What are the internal targets that we have? Look, I cannot do a crystal ball gazing of how the fuel prices will look in the future. We all have some forecast of where the international fuel price is. If we spoke to you, say, six quarters behind back when we are listed and come to all of you on our call in September 2021, the whole dynamics was totally different with the prevailing fuel price and then the overall EBITDA pattern at that time. Unfortunately, a lot of things have happened from then till now. Hence, we are also very clear. When we went to IPO, we were very clear, 18-24 months from the listing date in August 2021, we said we'll be ready to reduce the debt levels of the company to an acceptable level and get our expansion going. Along the journey, we also realized that a lot of market dynamics have changed and there's a huge headwind. I won't underline the word primary objective, but I think prudent business tends to ensure balance sheet hygiene is good. Hence, we really looked at the objective of ensuring that we come into respectable levels of debt before we get growth going. Having said that, we also have very good ambition to grow the business. Little while ago, I mentioned that while we'll do 19 and thereabouts volume this year, we still have scope to grow this company to 25 million tonnes, which is good 6 million tonnes or 25% headroom. You can still ask, the industry capacity utilization is lower, how are you expecting your capacity utilization to be pretty high? Running the company at high capacity utilization is the DNA of the erstwhile company and the current Nuvoco. We used to operate in the past at 90% capacity utilization. In some months, we have operated at 95% capacity utilization, and we are banking upon our DNA to go back to operating the company at 90%-95% capacity utilization. That is how we'll navigate in the next 24 months. I'm assuming and being optimistic here that the overall fuel prices and international prices will come down over a period of this year, and coal prices will taper down, and then our EBITDA per tonne will increase and thereby we will prepay or faster repayment of our debts. As I said, I can't give a timeline to you whether it is three quarters away, four quarters away. Suffice to say, commitment from all of us is, every quarter we'll come and tell you that what's the outlook. Secondly, every quarter we will reduce and pare our debt. You would have seen in the last three quarters, quarter upon quarter, we have come and given you a debt level which is lower than the previous quarter. You will see it in March, and you will see it in June next year. Our debt levels will be sequentially reducing going forward, and that will give us confidence that we are in the right path to pare the debt and grow the company. Okay. Thanks a lot for the detailed explanation, sir. Continuing on this particular thing. From an industry point of view, in the east side, I think given the players are increasing capacity, so what according to you could be market share? Maybe what is the industry capacity addition which is happening according to you in the next 20-24 odd months? Vishal, we've been asked this question in earlier calls, too. I would like to reiterate that when you look at the demand and the capacities, the capacities, particularly in east, should be read both in terms of cement and clinker capacity. If you take a look, clinker capacity is going up from 43 million tons per annum end of March 2022 to 56 million tons per annum in the next three years. If you were to translate this in terms of cement at a cement to clinker ratio of 1.6, we would be facing a situation of over 90% clinker utilization in the region. There's a lot more grinding capacity which is being added. There is an accurate situation of bunching of capacities in the coming months. As we mentioned, the demand outlook in the months to come, given the robust Union Budget thrust as well as the upcoming elections, there should be enough demand to absorb the additional supplies. Okay, sure. One last thing. On the AFR, like in the PPT you mentioned that our fuel cost is roughly like INR 1,611. The AFR that we use on a like-to-like basis, what exactly is the costing for the same? Okay. It's roughly the INR per million kiloca l. Somehow, one of you gentlemen asked me what is the cost of fuel for Nuvoco. The pet coke as well as the blended coal rates were trending at anywhere between INR 2.6 to INR 2.7, whereas the AFR for Nuvoco is trending at INR 1.6 to INR 1.7. A good INR 1 per million kilo reduction versus coal and AFR. That's the kind of arbitrage we get. Okay, sure. That's all from my side. Thank you so much. Thank you. Thank you, Vishal. Ladies and gentlemen, if you wish to ask any questions, please enter star and one. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead. Hi. Thanks for the opportunity again. Just wanted to check on the working capital situation. Generally, we have been seeing some reduction in working capital as fuel costs come off. Could you just guide on the expectation on the same? Good evening, Amit. Basically, as we move into the season, Q4, we are expecting a reduction in the working capital, and that is going to help us, along with the operational property, that is going to help us reduce the debt. Could you just help quantify it a bit? How much of relief are you expecting in Q4 specifically? Can you be more specific? No. I was saying that, could you just quantify roughly ballpark number, like how much of INR per crore number kind of relief that you are expecting, just so that we can better think of the debt number? Yeah. We are looking at reduction of working capital to the extent of around INR 300 crore in Q4. Okay. That's all. Yeah. Thank you. Thank you. The next question is from the line of Rajesh Kumar Ravi from HDFC Securities. Please go ahead. Yeah. Hi. Good evening. Sorry if I missed in some of your earlier comments. On per kilocal, how has been the fuel cost in Q3, and what is the trend for Q4? Thanks, Rajesh. I had mentioned in the earlier statement that the Q2 numbers for the company was INR 2.6 to INR 2.64 per million kcal. Q3, we peaked at INR 2.74 and as we stand in January, we completed January, we have already come back from peak levels to slightly lower than even Q2 levels. That's going to kind of continue in Q4 of this year. As it stands with the kind of coal prices prevailing, going forward as well, this is the kind of number. We already peaked and we have come down substantially from peak levels in end December as well as in January and February as we speak. Q4, you're looking below Q2 numbers, right? Around that. Yeah. Basically current spot prices and all, can it come closer to INR 2 in next, say, two quarters if the current prices were to stay on your fuel mix? That would be very difficult for me to say. Can I request you to connect with our team? Right now offhand I will not be able to calculate the mix as well as loop. No issues, sir. I'll get back. Certainly the petrol purchase price is trending at about $180 and imported coal is about $145 is what we are trending currently. That's where we are looking. With AFR coming in, which is going to be somewhat good for us. I spoke in my earlier one of the questions that we closed December at 9% TSR and then in Q4 exit is going to be 12% TSR. When we enter next year, our pre-processing, co-processing, carbon black for north as well as rest of all the AFR is going to be fully running and we are expecting at a company level at 12% substitution rate in fiscal 2024. Okay. In terms of these freight cost, how is that expected to trend, sir? Freight cost, one of the challenges for the entire industry is the railways have come and put back the busy season surcharge, which was not there for the last two years. Unfortunately, that has come back and then there is also news that is going to be for full year and not only the busy season. It's no more a busy season surcharge, it's going to be increase in freight rates. Having said that, the prevailing distribution cost for the company in Q2 and Q3 is likely to continue in Q4. However, one of the things which we are aiming for is the availability of wagons will improve going forward. If that's expected to improve, our distribution cost should come down from current trending levels of about INR 1,450 because there's a lot of road movement we have done on clinker because of non-availability of wagon. Okay wagon availability improves from semi-finished goods movement of close to about INR 310 per ton, the clinker movement cost will come down to INR 250, INR 260 per ton. There we target another INR 40, INR 50 reduction in distribution cost only by virtue of moving from road to rail. Rest of the initiatives that the company is focusing on is to improve the geo mix and focus on home market and also get the Bhiwani going means then I will sell lot of cement in Haryana and focus on Rajasthan and Chhattisgarh. The primary freight as well as the overall distribution costs should come down to better numbers than what we are currently trending. Sir, in the presentation By when do you expect this trend to play out, the wagon availability to a greater extent? I also mentioned in one of the questions that we are proactively engaging with the ministry to see how they can support the cement industry. Obviously, we have talked to the industry plus, certainly for Nuvoco we always represent. There is a positive view that maybe the wagon availability will certainly improve going forward moment the coal stocks in the power plants improve. I foresee as we get into FY 2024, overall availability of wagons will increase. Also there is this announcement which all of us would have seen. The Indian Railways is probably making about 10 wagons per day. Which is a huge number which will come into the system. I heard the Rail Minister speaking in one of the meetings about focus on railways to build more wagons. It will not happen overnight, all of us know. Certainly over a period of three to six months the overall wagon availability will improve, which will positively impact the cement industry. Sure, sir. Thank you. Last question, demand numbers you mentioned double-digit growth in both East and North markets. For you if I look at the volume growth sequentially as in flat is just 2% and year-on-year also in single-digit 6%. Could you just throw some light that why you were not able to grow on a sequential basis? Yeah, Rajesh, this was covered in my speech and in a question earlier this afternoon. While the eastern region demand growth has been good, if we take a look at the regional dynamics, the states of Bengal and Jharkhand were somewhat subdued and we have a fair bit of our sales there. However, we see with the budget, the elections and all, a quick catch-up in these two states. Still chasing our ambition for the year. Okay. Also would like to take this opportunity to mention that we are working very strongly on the levers of geo-optimization and premiumization. The focus will be on driving margin-based levers. Great. Great, sir. Great, ma'am. Thank you. All the best. Thanks, Rajesh. Thank you. The next question is from the line of Shubham Thorat from Perpetual Investment Advisors. Please go ahead. Hello. Thank you for the opportunity. Am I on call? Yes, Shubham, please go ahead. Sorry, Shubham, your voice is breaking up in between. Hello. Is it better now? Yes, much better. Just a clarification to begin with. You mentioned in the earlier comments that the Bhiwani plant will be commissioned in early H1 FY 2024. Can you please state what will be the total capacity for this Bhiwani plant after the complete completion of this CapEx? Currently our north capacity is close to about 4.8 million tonnes, the mill which we're putting up in Bhiwani is 1.2 million tonne capacity, we take the north capacity to 6 million tonnes grinding. Along with that, Chittor factory clinker debottlenecking happened last fiscal. Neemuch factory clinker debottlenecking is happening as we speak. The plant is under commissioning for that expansion with the additional clinker between Chittor and Neemuch, also with Bhiwani grinding capacity coming. By July, August in the coming year, early part of H2, we would be at installed capacity of 6 million tonnes in north. Okay, thank you for that. A couple of data points if you can provide. Can you provide the fuel mix and lead distance for last financial and the FY 2021 as well? Nitya, with these details, can I request you to reach out to our investor relations, please? We'll provide you all the details about lead distance, railroad coefficient, fuel mix. Everything we'll provide you. Just reach out to our team and we will be happy to give all details to you. Okay, sure. Thank you. Wish you all the best. Thanks. Thank you. Thank you. We'll take the last question from the line of Shravan Shah from Dolat Capital. Please go ahead. Yeah, thanks. Sir, you mentioned the Neemuch clinker debottlenecking, by when it will be done, and the Risda 5,000 TPD debottlenecking, which was remaining, when it will be done? For Risda, we are done now at 11,500 TPD. We could still take about a little bit more, for which we have to modify some fans. I think with the next shutdown in the coming fiscal, that should be completed. In terms of Neemuch, as we speak, all the work is happening. The hopper bins and additional roller press are all being implemented. We will just have to take an appropriate time, opportune time in April or May, when we build adequate clinker stocks to take the shutdown. Otherwise, the project is on stream. We'll take a sensible call in Q1 of next year to take, because the shutdown will take about 25 days. We will choose the right window to hook up all the systems. Our target is, by the time we hit July, August, Neemuch factory will be at 5,750 tonnes per day capacity, 1,000 tonnes more than what it is currently slated to give. Okay. Again, just trying to clarify in terms of the volume front. This quarter volume, though ma'am has mentioned in terms of the West Bengal and Jharkhand issues were there. Even if I look at the Q3 FY 2023, not the last year, even the previous last year, at that time also, we have done a 4.86 volume, and after that, this time we have a higher 1.5 million tonne extra capacity. Despite that, this problem in these two states are so significant that we are not even able to reach that. Does this problem go now sorted in January? Or still it is half sorted and half problem is there? I think if one were to kind of simply sell volume should be very, not that difficult to sell volume, but we took, as we mentioned, Meeta mentioned multiple times in the call, our focus has been to get the mix going and also choose the geo mix as well as the premiumization. If it was simply going and dumping volume, we didn't take that call, and hence, the primary endeavor in this quarter has been to ensure that we get the margin profile right, which I think we have made a big improvement from what it was in Q2 to Q3. We are pretty pleased with the effort which we have put and the results which we have got. I think we'll continue with similar effort. This is the season for cement. January to June, we would certainly not lose an inch in the marketplace and get the volume as well as going, the premiumization and geo mix will also be a criteria for us. Okay. Thank you. Thank you. I would now like to hand the conference over to Ms. Madhumita Basu for closing comments. Thank you. Thank you all for joining us today. I trust with the short comments in the opening remarks, followed by all your questions and our responses, we will have close to the top-line takeaways from this call fair event. My team also tells me that it has been a long day for most of you, and there's probably another call coming up, so I will not take up more time for closing remarks. My team and I, the Investor Relations Department, is available for any further clarifications that you may require. Thank you once again, and wish you a good evening. Thank you very much. On behalf of Nuvoco Vistas Corporation Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.