Ladies and gentlemen, good day and welcome to Q2 and H1 FY 2024 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 risk 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 then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Madhumita Basu, Chief Marketing, Innovation, North Sales and Business Development of the company. Thank you and over to you, Ms. Basu. Thank you, Yashasvi. Good afternoon, everyone. It gives me immense pleasure welcoming you to the Q2 FY 2024 of Nuvoco Vistas Corp Limited. At the outset, with reference to a feedback from some of you, I trust you will be happy to note that we have advanced significantly the board meeting and consequently this earning call dates. We believe this would provide opportunity for the investor and analyst fraternity to have more constructive engagement with us to understand the results and business outlook in the days to come. The Indian economy is picking up steam and strength despite the global challenges. Real GDP growth for Q1 FY 2024 came in at 7.8% YoY, significantly led by domestic drivers of private consumption and fixed investment. The momentum in agricultural activity in Q2 FY 2024 has been sustained. Although the monsoon has been uneven. According to India Meteorological Department, rainfall over the monsoon core zone, comprising most of the rain-fed agriculture regions in the country, was normal at 101% of long period average. The industrial sector signaled recovery in Q2 as Index of Industrial Production rose by 5.7% in July, and core industries output expanded by 12.1% in August. Going ahead, however, current global geopolitical tensions needs to be carefully monitored. Looking internally now at Nuvoco's performance for the quarter ended 30th September 2023. Revenue from operations improved by 7% YoY to INR 2,573 crores on the back of revenue per ton improvement of 6% YoY, a value-led growth. Our premium product shares stood at 37% of trade volumes, while our trade share also increased YoY to 74%, reinforcing the strength of our network. Moreover, as you know, cement prices in the east also improved in September 2023. Volumes grew by 1.2% year-over-year during seasonally weak quarter. Demand in the north region continues to be robust, where we saw a 14% year-over-year growth. In the east, core markets of Bihar and Bengal saw subdued growth during the quarter. We continue to hold ground and remain geared for demand revival in the east. Apart from infrastructure-led government programs which will drive cement demand, PMAY scheme needs a special mention. Currently as we speak, 33 lakh houses are pending for completion in the east, and out of this, 14 lakh houses are only in the state of West Bengal, suggesting significant potential for cement demand rising from this region. As reiterated, we will continue to prioritize value over volume growth in the east. In the north, our planned expansion in Haryana Cement North will enable us to cater to strong demand in this region. We delivered a strong growth in EBITDA by 73% year-over-year, driven by revenue growth and cost control measures. It is important to note that planned shutdowns at our plants are completing annual maintenance and debottlenecking projects impacted the EBITDA for the quarter. We would like to remind you that we have stopped accruing incentives from Panagarh facility from April 2023 and Neemuch plant incentive benefits period was completed in Q1, which has on a like-to-like basis INR 45 per ton impact in this quarter. As highlighted, the results also demonstrate our commitment to remaining vigilant on managing our cost spend. I now quickly share comments on the three major cement cost elements. Power and fuel cost per ton remained flat quarter-on-quarter. Fuel cost in itself declined due to reduction in coal and pet coke prices and increase in AFR usage. In Q1 FY 2024, AFR was 11.2%. This went up to 14.3% in Q2 FY 2024. Power cost increased quarter-on-quarter due to maintenance shutdowns and non-utilization or low utilization of CPPs and WHRs. Cement raw material cost per ton increased 12% quarter-on-quarter, mainly due to requirements to purchase clinker on account of plant shutdowns and increase in slag cost. Nuvoco continues to be better placed due to its long-term supply agreement. Distribution cost per ton declined 6% quarter-on-quarter, primarily due to lower clinker road movement, absence of busy season surcharge in months of August and September, and internal cost control measures. As shared in earlier calls, to improve margins, Nuvoco remains focused on measures such as premiumization, innovation, geo-optimization, trade share improvement, fuel mix optimization, brand strengthening, and Project Bridge, about which I shall be speaking in a bit. Firstly, on brand building. We are reinforcing the premium position of Concreto with our market campaign, "Concreto Kamaal." We also continue to reinforce marketing communication with the recent patent received on our revolutionary product, fiber-reinforced cement, branded in the market as Duragard Microfiber Cement. The patent effective from date of application cites exclusive rights for 20 years. The company also extended premium cement variants, Concreto Uno and Duragard Xtra F2F, from Bihar and West Bengal to Jharkhand market. Secondly, on Project Bridge. This project has been taken up in our company CSA and is under rhythmic review with two ExCo members. We are focusing on cost-saving measures purely from efficiency improvement. Areas include optimization of power and fuel cost by improving SHC, SPC, and AFR usage, elimination of losses in materials transit and handling, reducing damages and demurrages in transit and warehouse and improving warehouse utilization, logistics areas of direct orders, lead distance reduction, et cetera, and productivity improvement programs. On debt. Our net debt at the end of September 30, 2023, stands at INR 4,734 crores, which is a reduction of INR 549 crores on a YoY basis. I would like to mention that as highlighted in our investor presentation, historically it has been on a declining trend, and our focus on net debt reduction remains a top priority. Interest rate at 8.4%, on the other hand, reduced by 9 basis points compared to March 2023, despite repo rate remaining the same. I will now briefly touch upon our readymix and MBM business. Both businesses are performing well. Revenues from our readymix business grew by 11% YoY with a value-added products component of 34% in the mix. During the current fiscal year, four new readymix concrete plants were commissioned, taking our tally to 55 plants across India. In Modern Building Materials, construction chemicals, tile adhesives, and cover block continue to witness sales improvement, and the company remains focused on building the non-cement channel for this range of products. Sustainability. Nuvoco remains committed to its sustainability agenda, Protect Our Planet, which encompasses a sustainability roadmap, circular economy initiatives, green energy contribution, water positivity, and biodiversity management. I would now like to share the progress on key sustainability parameters. As mentioned during our previous call, we have one of the lowest carbon footprint in cement industry at 462 kg CO2 per ton of cementitious materials, duly validated by KPMG for the year FY 2023. Our alternate fuel rate AFR has improved 5.2% on YoY basis to 14.3% in Q2 FY 2024. Chittor Cement Plant continues to demonstrate capability of approximately 30% AFR. While Risda, where the AFR feeding system was commissioned in Q4 FY 2023, has achieved 18% AFR in September 2023. Growth projects. Reviewing quickly the update on our ongoing growth projects. On cement capacity expansion to 1.2 million tons per annum grinding unit at our Haryana cement plant, I am happy to confirm that we have completed no-load trials. The commission is scheduled in Q3 FY 2024, post which our overall cement capacity will reach 25 million tons per annum. Clinker capacity enhancement through debottlenecking projects at Risda and Nimbol cement plants have been completed. Risda and Nimbol clinker capacity is now being enhanced to 12,000 TPD and 6,000 TPD respectively. The Nimbol capacity enhancement will also support our grinding unit expansion at Haryana. On railway siding projects at Risda and Sonadih, track laying activities are underway. The Risda operations are expected to commence from Q4 FY 2024. With this, I conclude my opening remarks. I'm joined here by Mr. Jayakumar Krishnaswamy, Managing Director, Nuvoco Vistas, and Mr. Maneesh Agrawal, Chief Financial Officer of the company. We are here together to answer 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 touch-tone 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 questions. Ladies and gentlemen, in order to ensure that the management is able to answer queries from all participants, please restrict your questions to two at a time. You may join back the queue for follow-up questions. We will wait for a moment while the question queue assembles. We have our first question from the line of Satyadeep Jain from Ambit Capital. Please go ahead. Hi. Good afternoon. A couple of questions. One on the value over volume strategy. That strategy would imply that management is walking away from certain less profitable markets. If you can maybe talk about, I'm not sure if I missed that in the opening remarks, what those markets could be where you're choosing to walk away from. Is that any particular region? Is that non-trade? Is that maybe lower sales in the NU Vista brand? That's the first question. Yeah, I guess we were waiting whether you were going to put a second together or not. Good afternoon, Satyadeep. When we mean value over volume strategy, I guess this has been the approach which we have taken for many quarters now, just that we want to focus on predominantly, but if we have to give a choice between volume and profitability, I think we are very clear that we need to kind of get the overall profitability up because our end objective, our immediate objective, is to kind of reduce the net debt so that we can fuel growth for the company. That's what I've been saying in all the quarters, it is just an extension of our commitment to reduce the debt levels of the company. As regards whether we'll walk away from a market or not, very clearly in the previous call, I also mentioned one more thing that the installed capacity of the company is 25 million tons with 6 million tons in north and 19 million tons in east. Right from the IPO time till date, we have been very clearly mentioning that our growth projects in east will be second priority and before that the growth in north/west will happen. In line with that, we still have a lot of headroom in the east market for the next two to three years, we are cherry-picking premiumization, trade versus non-trade, Duraguard versus Double Bull, more of Concreto, more of premiumization. That is what we are saying when we say value over volume, certainly we will not go and sell for the sake of selling and getting volume growth in the market. Even within the core states, our focus will be on those states where our contribution maximization happens since geo-mix is a clear agenda. Just to sum up, value over volume means for us is premiumization, getting the geo-mix right, use the headroom available in east to get the growth numbers for the company in the coming few years, certainly focus on bottom line to ensure that reducing the net debt levels of the company in the near future. That's what is our volume versus value number. Also in the monsoon period, generally volume comes down, for us, prudent was to ensure that we are able to focus on value over volume. Jai, if you look at the October month, given you've already talked about the volume growth in this quarter of one-odd percent, how has October been for you so far? It's very difficult. I think we have just started the quarter. I guess while September, if you had asked this question a few weeks ago, we would have had close period for quarter two, right now it's open for Q3, but it's too early for me to make any comment on how this quarter will progress. Suffice to say, with the festivities ending and the monsoon ending, market will open up from November onwards, I guess once the Chhath Puja is done, I think it'll be a little bit of home stretch all the way from Chhath Puja all the way to March 31st. We will leave no stone unturned not to kind of grab if something's available there. Certainly, I guess we won't sell for the sake of selling in markets where we don't make adequate contribution. Just one more question. Also, focus will be on trade versus non-trade. Okay. Just one more question on premiumization on brand Concreto. When we started this journey about two years ago during the entire listing at that time, Concreto, we understood, was the premium brand in the entire east, in the entire premium brand and all. Our channel checks seem to indicate that some peers, including UltraTech, have now gained pricing premium. Would that be correct? If that is true, how does the company plan to regain that premium pricing for Concreto in that region? Satyadeep, thanks for the question. You will appreciate that on this call, I would not like to make a specific comparison with any competitor. However, to make certain facts relevant to address your query, there are two aspects to premiumization. One is the share of premium products in the mix, and second is the absolute premium per brand vis-a-vis the band of competition out. As you know, at 37% of trade sales, we are one of the highest in premiumization. Within this, in the key markets of Bihar, Bengal, and Jharkhand, premiumization trends to about 65%-68%. Driving realization improvements from premiumization is a key lever on our profitability, we continue to remain vigilant on market price tracking from both internal and external sources. On a database and a band of competitors in the market, from base product, the band of premium for Concreto, depending on state and competitor product, is anywhere between INR 15 per bag-INR 35 per bag. I'd like to round up by saying that this is a continuous process for us. Last year, when we launched Concreto Uno, we are bettering our own price game. Concreto Uno is priced INR 20 per bag higher than our Concreto product. I trust that addresses your query. Thank you. Thank you so much. I have one question. I'll come back and take it. Thank you. Thanks, Satyadeep. Thank you. We have our next question from the line of Jaswandeep Singh from Nomura. Please go ahead. Yeah. Hi. Thank you for the opportunity, and I hope I'm loud and clear. I have three questions, and I hope management will be able to answer them. The first one is every call and since the IPO, we are saying that net debt deleveraging is our priority. We also set a target for around INR 3,000 crore to INR 3,500 crore before we do any expansion. The debt keeps on increasing. It's around INR 47 billion right now. I just want to understand where the management is saying it made it by the end of this year, and what is the long-term strategy to actually delever? My first question is regarding this. Sorry. I think we had. Now you are unmuted. I guess you'll hear me. If you really look at our investor presentation, chart number 23, we have very clearly shown debt levels of the company March 2021, March 2022, March 2023, and the same comparison for September 2021, September 2022, and September 2023. I'll just read out some numbers for you. It will provide you adequate clarity on the question which you asked. March 2021, the debt level of the company was INR 6,730 crore. September 2021, it was INR 5,718. March 2022, INR 5,064. September 2022, INR 5,283. March 2023, INR 4,414. September, INR 4,734. Every quarter of March, every September of the last three years, our net debt is continuously coming down. You made a statement that we are increasing our debt, which is factually not correct. Sir, if I may. Let me finish my answer. You can put a riposte. Sure. March 2021 to March 2023, every quarter INR 6,730, INR 5,064, INR 4,414. September 2021 to September 2023, INR 5,718, INR 5,283, INR 4,734. You also mentioned that from IPO time, I am mentioning our company will reduce the debt level. Of course, our commitment is to reduce the net level, and I will still repeat in this call. In every call, I have said that our target for the next phase of growth will happen when our debt level comes down between INR 3,500 crore to INR 4,000 crore. We are committed to that. As the year progresses in the quarter, when we suggest, our numbers will come down to the number which I have been mentioning, and we will come with a growth plan around that time. Okay, sir. Let me explain why I asked you. If you look at from the March end, in the six months you have increased INR 350 crore of net debt. What I wanted was, what's the year-end target you are looking for the March 2024, what you are looking for? I'm sure you are tracking the cement industry. When you finish Q4 end, obviously Q4 end, the working capital release are big time. The collections are big time in that quarter, hence every company, the debt levels and the working capital levels will be lowest in the month of March. When you come to September, because of the season buildup from October to March, all of us stock up with clinker, cement and fuel. Our clinker and cement stock when compared to March to now has increased by 100,000 tons between clinker and cement, and fuel stocks are at 70,000 tons in September. You will watch us in December 31. There's a quarter three call, you will watch us in quarter four call. This number will come down, you will see it in the coming two quarters. Okay, sure. I'll wait for that. Coming to my second question. On the combined raw material and power input cost, if you look at your power input cost went down, your other raw material costs increased. In the opening presentation, ma'am was saying that you had to buy some clinker. Just wanted to ask what% of that your raw material cost is clinker? Given it's a seasonal quarter, was not the clinker built up as an inventory in the first quarter? Normally, your raw material doesn't increase that much in the second quarter. What was the change this year? Sir, we are unable to hear you. Can you hear me now? Is it better? Yes. Yeah, we can hear you. Yeah. Yeah. Power and fuel cost in Q1 and Q2 was INR 1,219. When you go dive deep into that INR 1,219 in Q1 and Q2, and when you split the power and fuel cost into fuel cost and power cost, the huge amount of drop has happened in the fuel cost of the company from INR 850 per tonne in Q1 to INR 798 per tonne in Q2. A reduction of INR 52 in the fuel cost of the company. In the same period, power cost went up from INR 369 to INR 421, an increase of INR 52. Hence, we are at more or less flat at INR 1,219. The reason for power cost going up in Q2 versus Q1 is due to the shutdown as well as the debottlenecking activities in a couple of our plants in Risda and Nimbol. We had to shut the WHR as well as the CPP, and we had to buy grid power, and hence the power cost went up. The efficiency of the kilns and the programs of the company to reduce SHC and also to maximize AFR has resulted in fuel cost reduction from INR 850 to INR 798. Hence, the first part is drop in fuel cost. Power costs went up temporarily. You'll see the Q3 numbers. There will be a reduction in Q3 power and fuel cost when compared to Q2 power cost based on the efficiency factor as well as the WHR and CPP. As regards the raw material, where you asked the question, why the raw material cost has gone up and because of the clinker purchase what Mita has spoken in her opening remarks. As regards the amount of clinker we sourced during Q2 when compared to previous quarter, about 50,000 tonnes of clinker to ensure growth ambitions. Not typically, the number 50,000 tonnes of clinker was purchased in North to fuel the North growth. North will grow in double digits and we incurred cost by clinker, 50,000 tonnes. That's the reason for the raw material cost increase. Okay, sir. I have another question. I will join the queue and come back. Thank you. Thank you, Jaswandeep. Thank you. We have our next question from the line of Prateek Kumar from Jefferies. Please go ahead. Good evening, team. My first question is on the cement pricing in East. We have benefited to some extent in September month during the last quarter. The question is around, like two, three rounds of price hike which were attempted in September. Has some of it got rolled back in the month of October for your case? Is it like largely sustaining and the full benefit should be realized in the third quarter? Prateek, firstly, to set the perspective, exit-to-exit basis, we have seen about a 7% increase in East, primarily because this price increase came in in the month of September. Through month of September and October, there have been the natural blips of up and down, but the prices seem to have stabilized early in the quarter. October, as you know, was a festival month and disturbed in some parts of East, we are definitely seeing the pricing situation stabilize. We'll have to see how it pans out still with eight more weeks to go to the quarter. Fair to say the November pricing is almost equal to October pricing. As of now, we are able to hold prices in this quarter. The October pricing is stable versus September, in your case, as you said. Yeah. Obviously, as Mita said, there have been ups and downs in price from September till end of October. Net-net, we have benefited out of pricing. As we enter November, we still are able to hold on to our prices. When we say that we have a high premium mix and focusing on further premiumization and the prices are better by ₹15, ₹35. On the profitability, how is it different for these products versus normal products on a per ton basis? Prateek, I would not like to go into a brand-by-brand discussion, but I'd like to mention here that the company has a price acceleration program, which is KPI driven for an improvement just through the premiumization lever of up to INR 50 per tonne. This comes out of a mix, the focus on continuous increase in the premium share as well as unit-to-unit price difference between base product and premium range. Sure. One last question on your CapEx. We see right now our CapEx is, sorry, net debt is seasonally higher, but maybe we can assume by the second half of FY 2025, we may start to see some work happening on the west project or north project in terms of expansion. Yeah, I guess current year CapEx is, like in last call I mentioned that FY 2024 CapEx is to the tune of INR 4,600 crore. These are all basically the greenfield expansions in Haryana, Nimbol, Risda, and then the siding projects and the routine capital. All of it is about INR 600 crore this year, out of which H1 we have done about INR 300, and then we're looking at about INR 300 in the balance six months in H2. Next year, in terms of these projects, all of them will be completed by March, April FY 2025. As I mentioned a few minutes ago, I'm really looking at debt reduction in this period of six to eight months. When the debt comes down, hopefully, fingers crossed, we'll come back and announce our growth plans. Third thing, if we are able to shave off that number and the industry and the overall market scenario is favorable in the next six months, which we are optimistic, there is a good possibility that we can come up with the plans. Okay. In your annual report, it was mentioned that we will be kickstarting the CapEx in FY 2025, if I remember correctly. Yeah. If you really look at whether it be Q1 FY 2025 or Q2 FY 2025, I think a little bit far-fetched to say at this point of time. As we come closer to the date, and I think every passing quarter with the strength of performance continuously improving, if you have seen our company in FY 2023 and FY 2024, every quarter YoY we have improved over the previous year's quarter's number. I think we will continue to maintain this trajectory going forward, and we are in a good spot to get our growth plans going once the debt numbers come below 4,000. That, in the best possible scenario, could be early part of FY 2025. Sure, sir. These are my questions and all the best. Thank you, Prateek. Thank you. Ladies and gentlemen, we request you to restrict to two questions at a time. You may join back the queue for follow-up questions. We'll take our next question from the line of Shravan Shah from Dolat Capital. Please go ahead. Yeah. Thank you, sir. Sir, to put it simple, current average October realization for us in East, if I compare with the 2Q average, how much is higher on per bag basis or ton basis? Shravan, how can I tell October number now? The quarter has just started. Broadly. Let me answer you in a different way. In one of the previous questions, I mentioned that the pricing in October is holding November, is holding as vis-à-vis October. Suffice to say, realization will also hold in the month. Okay. Why I was asking is because we have seen an INR 70 odd kind of attempt in September hike. Out of that, INR 50, INR 55 got absorbed, and now again, we are seeing an INR 17, INR 15 kind of a rollback. In gap, the price got increased, in stepwise it is getting rolled back. That's what I was broadly trying to understand because that's the major thing in terms of increasing our profitability in the third quarter, and that is the major driver in terms of achieving our net debt reduction. That's why broadly trying to understand how one can look at at least an INR 10, INR 15 kind of an increase in per bag for third quarter versus the second quarter. That's the broader structure I'm trying to understand. I cannot comment on the first part of your question. I will only comment on the second part of your question, which is about whether our realizations in Q3 will be better than Q2. Certainly, our realizations in Q3 will be better than Q2. Okay. Got it. Second, just on the expansion, whenever we will do whether Q1 or Q2 FY 2025, when we will be reaching up less than INR 4,000 crore net debt, as you mentioned. Last time we talk about close to maybe an INR 1,200 crore to INR 1,400 crore kind of CapEx we are looking for the Rajasthan expansion. For that, how much capacity are we looking at the clinker and at the grinding level, broadly, roughly? Sir, I guess there are two models we are looking, whether we should go for a 6,000 TPD or 8,000 TPD line. We still started our engineering work to estimate the designs because it's brownfield expansion. The Chittorgarh plant, originally when we put up, it was designed for a two-kiln configuration in terms of layout and the overall infrastructure in the plant. I guess with that in mind, that's how the engineering design is being worked upon. Closer to the date, we will decide whether we will set up a 8,000 TPD line or a 6,000 TPD line. Certainly the current plan is 6,000 TPD line. As an engineer's answer, I would say it's better always to have similar kind of equipment so that we're able to get standardization. Certainly business decision will come in the front of engineering decision. We will make a decision closer to the date, whether the 8,000 TPD line will fit there with the maximum benefit for infrastructure or a 6,000 TPD line. One of the two will happen. On a grinding level, it would be a close to 3.5, 4 million ton kind of a grinding, considering the 1.7 or 1.8 kind of a CC ratio. North is not like this. 6,000 TPD line would be about 2 million tons of clinker and 8,000 TPD line will be close to about 2.8 million tons of clinker. The CC ratio in North is far lower than East. While Mita mentioned and we have been mentioning that our OPC versus non-OPC route, OPC route will come down as a company because we want to maximize installed capacity. Even at a very conservative number of about 1.6 times We can look at 2 million tons would be 3.2 million tons of cement and 2.8 million-4 million tons of cement. Certainly, the grinding unit will not be inside Chittor. It will be a split grinding unit. Here again, we are working whether it will be in western MP or it will be in western UP based on a fly ash source model. Lastly, sir, data points, lead distance or KKL cost for this quarter, and the fuel mix for this quarter. Okay. Would you Fuel mix. Since the fuel cost came down by seven, the fuel mix for the quarter two was 1.77. For the same period in Q1, it was 1.83, became 1.77, and in Q3, I guess this number will come down even a little bit more than 1.77. In terms of lead distance, we have been able to reduce lead distance by eight kilometers in quarter two versus quarter one. pet coke, imported coal, linkage coal share was how much, sir, for this quarter? Okay. Yeah. Granulate details, if you want, I can rattle out in Q2. pet coke, 47%, imported coal, 1%, non-linkage domestic, 12%, linkage, 25%, and that's it. AFR, 14%. Thank you. Thank you, sir. Thank you. We have our next question from the line of Sanjeev Kumar Damani from SKD Consultants. Please go ahead. Thank you for the opportunity and good afternoon to all you, my respect for you all as leading management operating such large cement plants. Sir, my question is, one, regarding the efficiency of our plant on energy side. Can we say that we are most economical today or are best comparable to the industry standards? I want your comment on this, please, sir. Can you restate the first line of your question? If you restate the question one more time, I'll catch it, please. No problem, sir. Actually, it is regarding our energy efficiency of our plants on fuel side as well as power side. Are we most economical producer of cement, or we are still to do something to get most economical? Okay. In our industry, if you really look at, there are three energy levers in the company. One is the kiln SHC, you've got the clinker SPC, you've got the grinding SPC. Nuvoco is uniquely placed. With all our kilns, we got captive power plant, but that's nothing to do with energy efficiency. It's just a sound decision to ensure that we are able to generate our own power from coal rather than buying from grid power, because grid power is expensive. The second one is how do we reduce the specific heat consumption in our kilns. We have got multiple generation kilns in the company. The oldest kiln is made in 1984. The youngest kiln is installed in 2016. Six kilns are like 40 years from each other. The youngest kiln runs at 685 kiloCal per ton of clinker, which is easily one of the best in the industry. This is 6-stage preheater, and it's similar comparable to any other energy benchmark in the industry. We also have a 2013 installed kiln at Chittor. It's a Chinese design. Then that kiln has made giant progress in the last two to three years, and it's been able to match the 2016 kiln that it's also running at 688, 689 kiloCal per ton. I think these two are our flagship kilns. The Sonadih line 2 is also about 700. So suffice to say, our blended SHC for the company is anywhere between 702 to 710. If you really look at the average of us with the best in the industry, average will be more than best in industry. Two kilns in our company will be equal to the best in the industry. That's on the specific heat consumption. Again, in terms of power, we have got multiple decisions. We've got ball mill, we've got VRMs. So I guess the VRMs running in Jojobera as well as our Risda plant are operating at 30, 31 units per ton of cement, and that's, again, almost equal to the best in the industry. Our ball mills operate at 26, 27. Again, that's also fine numbers. The unique factor which Nuvoco has, which we are very proud and one of the energy efficient companies in the industry, comes from our WHR systems. We have WHRs which are fitted in all our kilns, and the installed WHR capacity is about 45 MW. In the entire industry, we are at 2:1 installed capacity to WHR, which is I won't be able to exactly compare with every other competition, but suffice to say, we should be one or two in this. Last but not the least, in terms of alternate fuel consumption, against a global benchmark, Indian benchmark of 8%, we are at a 14% in India. Easily, we're better than the Indian average. Global average is about 20% AFR consumption. We are at 14%. But once the Nimbol and Risda factory scale up, our AFR usage will be also excess of 20%. So with AFR at greater than 20%, WHR is at 45 MW, CPP in all our kilns, and the two kilns which are running at SHC 685, 688, suffice to say, we'll be one of the best in the country in terms of energy efficiency. Thank you very much, sir. Second question is regarding capacity utilization. I noted during the discussion that we produced 45 lakh tons in this quarter. I noted that you have a capacity of 1.9 million tons in the East, and rest is in the North. So can I know the capacity utilization in the last quarter in North as well as in East? Can you kindly? 23.82 million tons is our current installed capacity. If you have to do quarter by quarter, roughly 24 by 4 is 6 million tons of capacity. Out of which, if I did 45, we are operating at about 70% capacity utilization in Q2. Okay. Can you differentiate the utilization out of 1.9, and how much is on the North side? Right now, I'm not having the exact number. I guess if you reach out to our investor relations team, they will be able to give you capacity utilization in East and capacity utilization in North. Come Q4, our whole DNA of the company is operating at 90% capacity utilization. You will see us go back very quickly from a test match to an ODI to a T20 mode very quickly. Thank you. We have our next question from the line of Urmik Chhaya from Asian Market Securities. Please go ahead. Just one question. Clinker needed to be bought in North because of kiln shutdown due to maintenance during monsoon month. Isn't it a normal every year recurring feature that in monsoon, the kiln shut down and companies pile up clinker stock during the previous quarter? Another reason I ask is, CC is obviously lower than East. You don't have a Concreto in North. In terms of pricing, I don't think you are among the top 5 in the region. You saw from the northern plant. Isn't that substantially negative for margins? Okay. Answer to your first part. This clinker purchase in North will not be an annual phenomenon. It was only a unique phenomenon for this year simply because we had to take a 45-day shutdown in Nimbol plant for annual shutdown, plus the debottlenecking project which was happening there. We needed 45 days to fit the various other parts to ensure the line capacity went up to 6,000 TPD. It's a one-off thing. It will not happen. Rest of the year, we don't buy so much clinker at all as to run our company. We always have our own clinker to run our company. At 4 million tons of installed clinker capacity in North, we will make 6 million tons of cement. That's the kind of number we have for North. That's the installed capacity. As regards your second question of Concreto, we don't have any plans to launch Concreto in North. Concreto is a uniquely slag cement, which is unique to East, that's where we are market leader. North, our premium product comes from Duraguard Microfiber, which our marketing head said about patented product which is unique. That's our premium product offering in North. As regards pricing in North, we are just 8, 9 years old company in the North. I guess our entire DNA is to run a premium products company. More and more Duraguard Microfiber will sell in the market in the North region in the coming years. Certainly, our ambition is to get into top 3 of pricing in North in the near future. Thanks a lot. Thank you. We have our next question from the line of Amit Murarka from Axis Capital. Please go ahead. Hi. Thanks for the opportunity. Just on demand in East, we have seen last two quarters being quite soft in East. Could you highlight what has pulled down this trend of strong demand in the region, and what's the outlook for the region? Thanks, Amit, for the question. We have also addressed this in our previous calls. Right from Q4 of last year, demand has remained soft in Bengal and Jharkhand initially, and last quarter we saw Bengal and Bihar. Bengal has remained on the lower side, and that is why even in my speech, I made a reference that we continue to remain bullish looking at the potential in West Bengal. Particularly, release of funds for AMA by projects has a very favorable impact on our business, which is IHB or individual home builder or trade-driven business. We will just have to see. We remain optimistic that when this demand opens up, when funds flow improves in the market of West Bengal, we are sitting on some good potential there. Okay. That's a temporary phenomenon. I guess it's been there for the last three, four quarters. Things should change in East because the reports about cement industry for the future, if we look at the regional growth plans and any release report by all the research houses and analysts, very clearly says in the next five to 10 years, East will be continuing to grow at 8, 9% CAGR. Overall industry will be about 7%, East will be faster than the industry. That's not come through in the last two quarters. I guess all this is based on the base data of infrastructure, roads, PMAY, and rest of the underdeveloped part of India is largely located in the East. That's one of the reasons why a lot of capacities are coming in the east, and the entire industry is looking at the east as a growth engine for their infrastructure and cement industry, and things should certainly improve in the coming quarters. Sure. Understood. Your freight cost has been quite volatile. I understand part of it is because of rail rakes availability and all that. Is the situation now stabilized on rake availability, and what's the plan to mitigate this volatility in freight cost? I think freight cost is a function of external levers and internal levers. The external levers are all coming out of the fuel price, as well as the second one is all about rail freight and rail rake availability. Rake availability, we are constantly knocking at the doors of Indian Railways to release more rakes and ensure that the wagon supply is adequate for us. As you know that Nuvoco has got a relatively very good index of rail share in the overall east market. The other thing, for us to exploit this advantage is the reason why we are setting up railway siding in our Orissa cement plant in Jajpur and extending the railway siding in Sonadih so that we're able to get the benefit of it. You would know that if you have more and more siding, then the allocation of rakes from the Indian Railways is a little bit of a formula driven based on the sidings one has. With these two sidings coming in, we should get more rakes for clinker and more rakes for bagged. That's the external factor. As regards the fuel cost as well as the freight rate, very difficult for us to comment. That's all now open market rates for fuel, and then as and when the fuel rate changes, the overall freight rate increase. The industry also works with a formula for how much of defraying the fuel cost and overall freight rate, it should be okay for everyone. Having said this about the external levers, what as a company we have to focus and are focusing is based on two other levers, which Madhumita mentioned about the Project Bridge program. One of it which we can certainly do is increasing the geo mix and reducing the lead distance. In this quarter, we are able to reduce the lead distance, but our aim is to reduce the lead distance in east by minimum 10 kilometers in the medium to long term. That's one of the biggest agenda which as a company we are driving. The second lever which we have is to increase the direct dispatches and circumvent the SCM route. Here we see a huge opportunity, but it is going to be a challenging one because we've got to change the trade practice. Nevertheless, we are committed to take the low-hanging fruits in those states where we can migrate from SCM route into ESO route. We are already set targets to go to about excess of 55%-60% as a blended company. In the long run, even 60% is not a good number. We should have an ambition of going up to 75%. We can unlock INR 50-INR 60 out of secondary dispatch freight cost. Freight cost reduction, increasing rail movement, and reducing lead distance. All these are the big agenda for the company in the medium to long term. Got it. Thanks for the detailed response. Also, like you mentioned, your cement capacity is growing to 25 MT after the Bhiwani grinding unit. Similarly, what is the clinker capacity now with the debottlenecking that has happened at Risda and Nimbol? North our installed clinker capacity is 4 million tonnes and east is 13.5 million tonnes. 9.5 million tonnes, I'm sorry. Overall, as a company, we'll have 13.5 million tonnes of clinker, and the corresponding CK ratios will land us to 25 million tonnes. This 13.5 is all operational now, right? I mean, the debottlenecking all completed now. Clinker is all operational. Grinding, Bhiwani is under commissioning, as we mentioned little while ago. By end of Q3, mills will be running at full speed, and then packing lines will come around December, January. By end of this next year, we can safely say we are open through for 25 million tonnes. Got it. Thanks a lot. Thank you. Thank you. We have our next question from the line of Parth Bhavsar from Investec. Please go ahead. Hello. Thank you for the opportunity. I wanted to understand that we've done quite well operationally. It's just that your other expenses has shot up by INR 150 per tonne on quarter-on-quarter basis. I believe this would be on account of the maintenance shutdown that we have taken, right? Is there anything else besides the maintenance shutdown? Just a second. Give us a minute. We are just recalling that sheet. Quarter two to quarter one, other expenditure increase is totally a function of the shutdown as well as the shutdown expenditure of the company. Okay. Nothing else, right? This will normalize going ahead. It will come down in the range of maybe INR 700-750. Your thoughts? I'm sorry. That is the only reason for Q2 to Q1 other expenditure increase. Okay. This will come down the moment our shutdowns are already completed, in Q3 this number will come back to normative levels. Okay. Sir, can you help me where the shutdowns were taken? If you could just name the plants. Basically, we have six kilns, we have completed shutdowns in five out of six kilns. Even in the sixth kiln in the month of September, we've done part work. For the year, more or less, our shutdown kilns is done and out. Mills, almost all mills are done. There are two ball mills in two four plants where small cost shutdowns are there, but that's not going to impact the results for this year at all. Okay. Shutdown and the kilns is done. Also, I wanted to know how many days these kilns were shut down for? That'll be very difficult for me to remember every kiln, how many days. I only remember the Nimbol shutdown because I was personally monitoring. It took 45 days for us to shut down the kiln and debottleneck for 6,000 TPD. Okay. That's it from my side, sir. Thank you so much. Thank you. We have our next question from the line of Navin Sahadeo from ICICI Securities. Please go ahead. Yeah, good evening, and thank you. Sir, can you speak a bit louder, please? Yeah, sure. Is it better now? Yes. Yeah. Thank you so much. Thank you for the opportunity. My first question was regarding the repayment schedule for, or towards acceptances. What I gather from the annual report is that of the total trade payables of INR 1,700 odd crore, roughly INR 1,467 crore is due or payable within less than a year. My question was that, are we likely to get a rollover of this acceptance facility or this trade payable facility, or this can see a meaningful decline, more like INR 1,100 odd crore of normalized levels that were there prior to the spike that we saw last year? Thanks, Navin, for the question. Basically this trade payables is all about our negotiated terms with the vendors, both on the raw material side, fuel side. Given the seasonality, this is on a higher side, and we have been able to get better negotiation on these payment terms. As the volumes pick up, this may go up, but obviously it is not going to go down to INR 1,100 level, for sure in the Q3 and Q4. Right. No, it's great. If you can get that kind of a credit facility, it's definitely great. I'm only trying to understand if there is a repayment due to it. There's no repayment cost, as I clearly mentioned. Navin, just to be more specific, in fact, I've been talking about in the previous quarter as well. Working capital management has always remained a paramount focus for us at Nuvoco, and on the side, we have been continuously negotiating our payment terms with the lenders and trying to see as to what sort of payment terms can be given to us. This is more through the routes of the trade financings of SBLCs and also the open credits that we enjoy given our position in the market. No, great. This is absolutely great. For this trade payment. No, this is absolutely great, and congratulations to you for doing such a great negotiation there. My second question, just a confirmation. In response to the call a couple of terms back, did Madhumita ma'am say that the exit for the exit price or the exit realization for September quarter was 7% higher versus the average for the quarter? No, I mentioned a quarter to quarter, June exit to September exit. Okay. September exit was 7% higher versus June. I get it. Sorry, Navin, as I mentioned, the increase was realized in the month of September. That is why an exit-to-exit comparison. Of course. That's great. Thank you so much. Thank you. We have our next question from the line of Tejas Pradhan from Citigroup. Please go ahead. Hello. I heard the call that you mentioned North saw 14% volume growth in this quarter, 2Q. Can you share the same number for the East? East has been very marginally lower, and we have a little bit of business in Center. Between East and Center, we've been about 1%-2% lower. Okay, thanks. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Ms. Madhumita Basu for closing comments. Over to you. Thank you, Yashasvi. In conclusion, firstly, thank you all for attending the call and for your questions. Cement demand is expected to be driven by housing and government-led infrastructure development projects. We continue to remain optimistic on the potential demand uptick from pending PMAY and infrastructure projects in East. We continue to focus on operational efficiencies and remain committed to our growth projects. As clarified with an early closure of the earnings call, we look forward to being available for any clarifications and further discussions that you would like to have with us. Thank you once again for joining us today. Wish you all a happy Diwali and a prosperous new year. Thank you, ma'am. On behalf of Nuvoco Vistas Corporation Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.