Ladies and gentlemen, good day and welcome to Q2 and H1 FY 2025 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Madhumita Basu, Chief Investor Relations. Thank you, and over to you. Thank you, Yashasvi. Good afternoon, everyone, and thank you for joining our second quarter of fiscal 2025 earnings conference call. Let me start by briefly discussing the broader macroeconomic landscape linked to cement demand, followed by a review of our performance for the quarter. The macroeconomic environment remained challenging, with key indicators signaling a slowdown in capital expenditure. YTD August, Union Government CapEx dropped 19% YoY. Central public sector enterprises and other agencies' capital expenditure fell 11% YoY in H1 FY 2025, led by slower pace of investments by Railways and the NHAI. State government CapEx declined by 6% YoY in the first five months of FY 2025, following a 40% surge in the previous year. States such as Bihar, Gujarat, Haryana, West Bengal, and Chhattisgarh witnessed 6% to up to 37% drops in State CapEx. Housing sales across top 30 tier two cities fell by 13% in Q2 FY 2025, while new launches declined by 34%. The industrial landscape is also under pressure, with India's manufacturing PMI dropping to an eight-month low in September, and core sector output contracting by 1.8% in August, the first decline in 42 months. As you are aware, the Union Budget for FY 2025 was presented only in July, following the general elections, with Presidential Assent received in August. This delay has led to a slower rollout of capital expenditures, particularly for government-funded infrastructure projects, including PMAY work and the Purvodaya Schemes. Furthermore, the prolonged and intense monsoon this year, while a boon for agriculture, has hampered construction activity, delaying projects and dampening demand for materials such as cement. Thus, the combination of delayed public spending and weather disruptions has created a tough environment during the current system. Now, let's turn our attention to our performance for the quarter, where we will explore our progress and outlook going forward. In Q2 FY 2025, the company recorded revenue and EBITDA of INR 2,269 crores and INR 229 crores, respectively. Let me take a moment to break down some of the key elements behind these headline figures. Firstly, let me touch upon the volume, which declined by 5% YoY in Q2 FY 2025, attributable to the subdued macro environment outlined earlier. East and North regions face a challenging landscape marked by demand contraction. The subdued demand has not only affected sales volumes across the industry but has also put significant pressure on prices. All India's cement prices experienced a dip of 4% quarter -upon -quarter. Notably, the North region saw a decrease of 3%, while the East region faced a more pronounced drop of 5%. In this scenario, Nuvoco has been working on a balancing act between volume and managing prices, resulting in a blended realization per ton drop of 2.7% quarter -on -quarter, which is lower than the industry average. We managed revenue per ton better than industry, primarily driven by our continuous focus on premiumization and geo-optimization. Premiumization remains a key focus area for the company, with premium products share in the trade segment reaching a record high of 43% in Q2 FY 2025. Amongst the offerings, Concreto Uno, a premium cement brand, is catering to the growing demand for high-quality construction materials in the East and is gaining traction. Secondly, given significant headwinds of weak demand and pricing pressure, the company remains focused on operational excellence. At this point, I'd like to provide an overview of the quarter's performance with respect to key cement cost elements. Power and fuel costs per ton reduced by 3% quarter -on -quarter. The company has reached the lowest blended fuel cost in the last 12 quarters at 1.54 per Mcal. I would like to reiterate that Nuvoco's power and fuel cost continues to be among the lowest in the industry. On the raw materials side, Nuvoco continues to be better placed due to its long-term SLAC supply agreement. Distribution costs per ton also declined by 1% quarter -on -quarter due to efficiency in operations. On cost efficiency, we are happy to report that Project Bridge 2.0 is on track and has yielded a reduction of INR 50 per ton in operating costs in Q2 FY 2025. We successfully commissioned new clinker wagon loading system at Sonadih, which enables enhancement of clinker dispatch via rail and is expected to aid in cost savings. Odisha railway siding project is expected to be commissioned by Q4 FY 2025. During this quarter, we also completed Grid Integration Project across integrated units in Chhattisgarh, enabling savings in power cost. Our net debt as of September 30, 2024, stands at INR 4,501 crores, which is a reduction of INR 233 crores on a year-on-year basis. Historically, we have maintained a declining trend in net debt, as debt reduction remains a top priority for us. It is important to note that net debt at the end of September is higher compared to the March period due to cyclical impact of market capital requirements. Regarding cement demand, as I mentioned earlier in my comments on the macroeconomic situation, the industry has encountered significant challenges due to slowdown in the overall CapEx environment, which has impacted the infrastructure sector as a whole. Additionally, this situation was exacerbated with a prolonged and intense monsoon. Going forward, the execution of projects announced under the Union Budget will be a key monitorable for any demand revival. Notably, in the Union Budget 2024-2025, the government has outlined several programs for the infrastructure development, including development in eastern regions. For example, INR 26,000 crores has been allocated for various infrastructure developments in Bihar. The Purvodaya Scheme also focuses on the overall development of the eastern region. This is promising for Nuvoco, given our substantial presence in the East. However, the timing and pace of demand recovery will depend on the on-ground execution of infrastructure and housing projects. Additionally, sustainability of price improvements is contingent upon sustained demand growth. Meanwhile, Nuvoco is navigating these volatilities with resilience by prioritizing on premiumization, geo-optimization, branch strengthening, and operational excellence. We are confident that with the main focus remaining on operational cost efficiency, we will also see the benefit when demand and pricing cycles turn. With respect to ready mix and MBM business, focus on innovation continues. In ready mix business, Ecodure thermal insulated concrete, which helps reduce indoor temperature, and Concreto Uno concrete, India's first hydrophobic concrete designed to protect against water damage, was launched in Q1 FY 2025 and has seen good momentum in Q2 FY 2025. The MBM business introduced Zero M Roof Shield, a single-component waterproofing coating that reduces surface temperature by up to 10 degrees Celsius, ensuring cooler living spaces. Our commitment to sustainability is a vital aspect of our operations, as evidenced by our position as one of the industry leaders in low carbon emissions. Our audited figure for FY 2024 shows an impressive emission rate of 457 kg CO2 per ton of cementitious material. We believe that our sustainable practice will continue to add value to various stakeholders, including the communities we serve. With this, I conclude my opening remarks. I am joined here by Mr. Jayakumar Krishnaswamy, Managing Director of Nuvoco Vistas, and Mr. Maneesh Agrawal, our Chief Financial Officer. 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 the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. We request participants to restrict to two questions at a time and to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take a first question from the line of Satyadeep Jain from Ambit Capital. Please go ahead. Hi, thank you. Just first question, I wanted to check on the entire debt situation. So maybe can you help us understand what is the debt repayment schedule, and are there any particular restricted covenants that can just on the leverage, wanted to get some idea. Yeah, absolutely. Good afternoon. Thank you for your question. So first of all, in terms of our debt repayment schedule, I guess everything is on course. This is the first quarter after many quarters where, I guess, the overall industry has not performed well, and then consequently, all the players have had a little bit of a downside. But suffice to say that in terms of our payment schedule, in terms of our governance, I think everywhere we are on course. And as informed to the investors in the past quarters, we are well on the way to kind of paring the debt to just about less than INR 4,000, between INR 3,500 crores-INR 4,000 crores in the next two quarters. Okay. But is there any major bullet payment or something coming during the next maybe 12 months or so? I think that's there. I think we have payments coming in the next every year, I think we've got payments in the next 10 months. Also, we've got payments coming. Certainly, I think we are well on the way to kind of ensure payments will happen when it happens, and even if the continued downward, not downward, somewhat muted demand is there, I think we always have the leverage of refinancing it, and it should not be a problem at all. Okay. Certainly. In terms of governance, I guess all the, I think, all of those various covenants which are net debt to EBITDA, net debt-to-equity, security coverage, that sort of thing. All of them are in the published results. We have to declare in our quarterly results to the Board as well as the shareholders and to the other regulatory bodies. I think all of them, we are comfortable meeting all the requirements. Okay. Thank you, Jay on that. Secondly, I think last quarter, you mentioned that certain particular micro -markets, I'm not sure if I mentioned the trade markets, certain micro -markets like West Bengal, Bihar, Chhattisgarh, particularly margins were low, and the company decided to walk away from certain low-profit micro -markets. Is that something that continued in this quarter? And you're still seeing that maybe in third quarter so far, these certain micro -markets where you are deciding not to maybe be aggressive in those? In general, as Mita mentioned in the speech, one of the key strategies for the company, which I mentioned in the previous calls as well as certainly one of the priorities is to ensure value over volume. That's something which we have been doing. Remember, you had asked this question two quarters ago also, and we had a conversation discussion around the objective of company prioritizing value over volume. I think as of now, we're still continuing. As regards the market scenario, I guess this is a little bit of in any case, monsoon months are weak demand months for the industry. But this year, specifically, the monsoon quarter has been a little bit worse than the previous monsoon quarters, at least in the last six, seven years I've seen the industry. But certainly, as regards our strategy of walking away from any market, so let me just clarify to you. Certainly, I think we will never walk away from a market, but it is not kind of participate aggressively in the market to ensure that we push volumes in this key market where the pricing is pretty low. But then if you really look at the market of Bihar, historical high Concreto sales have happened in the action of this period. We are continuously increasing our premium product share in East and as well as in North. Our Concreto, regular Concreto, Concreto Uno, Duraguard Microfiber, these numbers are all kind of trending at historical high levels in terms of percentage. This quarter, we had 43% premium product sale for the company, which is the highest, at least in the last six, seven years I've seen the business. So prioritizing value over volume is important. But in certain markets where the pricing is really bad, maybe certain West Bengal, one, two, three, there are certain markets where the freight cost is high, reach is expensive, and markets are inherently not that great. Certainly, we will not push volumes for the sake of pushing volumes. Yeah. Thank you so much, and wish you all the best. Thank you. Before we take the next question, we'd like to remind participants to press star and one to ask a question. Next question is from the line of Kunal Shah from DAM Capital. Please go ahead. Yeah. Hi, team. So just one question on this value over volume strategy. Now, one thing that I'm not able to understand is given the dealer incentives are inherently volume-driven in this business, for implementation of the strategy and pushing the premium products, we'd be paying more commission to the dealers to offset for the volume loss, right? I mean. Yeah. I guess it's not going to all the nitty-gritties of the discount schemes for the company because I think that's something which we monitor very closely, how do we run schemes and plan schemes. But if you really look at the various schemes in the market, we've got monthly target, quarterly target, annual targets. So the targets are all kind of based on overall volume link. But within the overall volume link scheme, we also have sub-schemes based on direct dispatch, sub-scheme based on the level of premium sold. So those things are all added benefits to the dealers. So I guess when we incentivize dealers to kind of on these lines, there's normally tendency for the dealers to sell some of these more. Given the fact that market itself is a little bit tepid, so there's a little bit of an added incentive for dealers to push premium or direct sale or SO dispatches, which is kind of helping them. So that's how we kind of structure the scheme. Understood. But just one or maybe just putting it the other way, so let's say selling these premium products, incurring more expenses on the costing, packaging, advertisement, dealer discounts, and taking some bit of hit on your potential operating leverage, what you're trying to say is we'd still be making more absolute EBITDA versus a volume-led strategy? If you really look at it, you have to look at it in two parts. One is when you push absolute volumes more, then I guess the overall absolute EBITDA with the company will be dependent on the total amount of volumes which we sell. But the fact that the market is a little bit tepid, one of the things for us is instead of participating in those markets where the contribution margin of the overall EBITDA is low, we prioritize pushing more premium in the more attractive market. And certainly, when we sell a Concreto or a Duraguard Microfiber, a Concreto Uno, the contribution margin for these products, vis-à-vis a normal product in the market, is much, much more. And hence the realization and hence the EBITDA levels for the company are better. That's one of the broad themes which we are working at this point of time. But in any case, our brands are so strong. In a place like Bihar, we are selling more Concreto than ever before. In Rajasthan and Chhattisgarh, we are selling more Duraguard Microfiber than ever before, actually. Duraguard Microfiber and all are trending at close to about 17%-18% numbers, and Concreto is much higher. In fact, in Bihar, Concreto volumes are close to 75%-80%. That's the kind of volumes we're able to push. Hence, net net in states where we have a strong position on premium category, we end up getting more realization and better EBITDA margins. Understood. And one last bit here. You mentioned twice on this market being tepid, and that gives some bit of cushioning. But in your experience, does the—I don't know how to put it—but does the market share loss sort of aggravate during inflationary times or cement pricing? I'm not going to quantify what's the kind of share loss which is happening. No, no, no. Not from a quantification. From a time perspective is something that I wanted to understand. Yeah. I would certainly admit that in these times, there's an option available for us to kind of go hammer and tongs in pushing volumes in market, but thereby not give up our space in the shelf. Given the fact that overall market growth itself is negative to neutral at this point of time, and pricing power for the industry is almost the lowest in the last five years in this quarter, we thought it's sensible to kind of play the premium game rather than to push volumes. Understood. And just one last bit. In terms of this October pricing, because we are getting some sense that prices have actually declined in October in your Eastern micro -markets. So could you just help us with how the trend is in October versus the September exit? A little bit on next quarter, so for me to kind of tell anything about this quarter is not appropriate in this call, but suffice to say, there has been an upward movement as well as a downward movement, so it's kind of yo-yo image. Literally, there is no firm trend, which is kind of giving any great confidence to the industry that it will go one way up. Understood. Understood. This is extremely helpful, sir. Thanks a lot for the detailed answers. Thank you, Kunal. Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. We'll take a next question from the line of Shravan Shah from Dolat Capital. Please go ahead. Yeah. Thank you. A couple of questions. First, a couple of data points. Lead distance for this quarter, trade share, and road /rail mix this quarter. Okay. Road /rail mix, for quarter two, is 60% road share and 40% rail share. Second decimal, some changes, but I'm not in all the specificity. Lead distance, we are at 330 km. We used to be 332 in Q1. 2 km reduction in the overall lead distance. In terms of trade mix, somewhat lower in Q2 when compared to Q1. We are at 71% trade mix. That's again 73% in Q1. Okay. And is it fair to say, let's say, when we said that our prices have declined just 2.7%, so the non-trade prices would have declined much higher in Q2 versus the trade prices? 2.7% net of trade and non-trade. And then if you see how my trade share is 71%, non-trade share is 29%, you've got to find a way to mathematical algorithm to get obviously 70% of trade less than 29% non-trade. Obviously, non-trade is a little bit more than trade, but then overall compensated at 2.7%. Okay. And then, given that for 1H, we have seen a 4.8% kind of a volume decline, so just wanted to understand the sense for second half, is it possible that we can still see the full year will be a negative on the volume front? Last year, H2 was not very great for the industry as such, actually. To that extent, I think the base number for at least Q3 and January and February was not that great for the industry last year. So I'm really looking at a 4% volume growth for the full year. So we would get growth from November post-Puja, post-Chhath Puja, and Dussehra. So come November till November 15th till March, I guess there should be a home stretch for the industry and certainly for us as well. Okay, so that means more than a kind of a 10% growth that we are looking at in the second half? Certainly, I'm targeting high single-digit growth. Only the coming October end and till 15th of November, we'll get a good sense of whether there's a little bit of a shift in momentum in the overall uptake. As Mita mentioned in her speech, post the budget, a lot of schemes are announced by the government, but they have not kicked off on the ground as of now. But I'm optimistic that once the Puja is done and then money has to flow into the market and construction will pick up, and then overall demand, demand, cement demand will also go up. Plus, the monsoon this year was a little bit severe. So that's something which has kind of adversely impacted. Some broad macro stuff, if you look at the states of Bengal, Bihar, Chhattisgarh, overall capital spend is not great. The other momentum change of government has happened. But from now on, things should improve. So overall demand uptake will also improve maybe November 15th onwards.. Got it. And on the CapEx front, so in the ongoing, we have done INR 220-odd crores, and we previously said INR 300 crores-INR 400-odd crores kind of a CapEx in the FY 2025 and for INR 900 crore-INR 1,000 crore in FY 2026. So that number holds? Absolutely holds good. We may even be shy of maybe INR 400 crore by INR 420-odd crores in H2. So there are no new projects which are kicking off. The big projects are basically the GU in Haryana, or the Railway Siding in Sonadih, Railway Siding in Jajpur, and then the Grid Integration Project as well as AFR. So all of them are completed at more or less the end of the year. I'm not kicking off any new project now till the March and just waiting for this year to tide over so that we start our expansion CapEx end of this fiscal early next fiscal. And the net debt of INR 470-odd crore, obviously, it is a seasonality which has increased in the 1H. So by end of this year, do we expect that it will come back to normal kind of a INR 4,000-odd level? Yeah. At this quarter, guys, as part of our presentation, if you see September 2021, we were 5718. September 2022, 5283. September 2023, 4734. September 2024, 4501. This is year -on -year, every quarter, we are better off than the previous same quarter, previous year. So end of March certainly will beat our this March's number. So we should be. We are in a good position to reduce the debt. So only then we will be another. I want you to join back the queue, please, as we have other participants waiting. Okay. Thank you. Thank you. We'll take a next question from the line of Aditya Desarda from Motilal Oswal. Please go ahead. Mr. Aditya? Hello. Yeah. Please go ahead with your question. Yeah. Hi. So basically, I just wanted to know, what's the current net debt position, and how much progress has been made towards achieving the targeted net debt reduction? You have to repeat your question. Mr. Desarda, can you use your handset mode, please? Yeah. Sure. Hello. Can you hear me now? Yes. Please go ahead. Please repeat your question. Yeah. So as I was mentioning, what is the company's current net debt position and how much progress has been made towards achieving the targeted net reduction? Can you repeat the second part of your question? You said something after the company net debt. What was the second part? Like how much progress has been made towards achieving the targeted net reduction? Still not clear. How much, what? Just repeat one more time, repeat it slowly. I didn't pick up the second part of your question, please. Yeah. I'm telling that I'm asking how much progress has been made towards achieving the targeted net reduction. Okay. Okay. Fine. I've kind of made something of your question. If I'm not giving the relevant answer, you can ask me a repeat. Current net debt for the company end of September is INR 4,700 crores. And our stated objective is we should pare the debt to INR 3,500 crores-INR 4,000 crores, 3.5x-4x EBITDA numbers. And the view currently I have for our company is by end of this fiscal, we should be lower than last year's INR 4,034 crores. So we should be thereabouts by end of this fiscal. And in the long term, we are comfortable operating the company at INR 3,500 crores-INR 4,000 crores, 3x-4x EBITDA. That is what we were comfortable running the company. Okay. One more thing. How has the realization per ton changed over the last quarter? Yeah. Realization per ton. Just give me a second. Yeah. The realization for the company in Q2 is INR 5,264 as against the Q1 realization of INR 5,120. Okay. Okay. Can you just let me know what? I'm just back. I made a mistake. I looked at the wrong year. Our Q2 realization is INR 4,843 as against INR 5,026. Good, good. INR 180 lower than Q1. Okay. So can you let me know what are the factors basically that contributed to these changes? Price, price, price. Okay. It was predominantly price. In terms of cost line, we are equal to or better than many competitors on line by line of the cost line. Our fuel cost currently is trending at INR 1,046, which is one of the lowest in the industry. We reduced fuel cost by INR 30 from Q1. Our distribution cost came down by close to about 1% over Q1. In terms of other expenditure, cost of materials consumed, we have come down by 2%. So the cost lines are well under control as Mita spoke and mentioned in her speech. The BRIDGE agenda is certainly benefiting us. So I'm really looking for a price movement in the market in a positive direction. We'll get the leverage going forward. Okay. Going forward or? Aditya, I request you to join back the queue, please, as we have other participants waiting for their turn. Sure. Thank you. We'll take a next question from the line of Rajesh Ravi from HDFC Securities. Please go ahead. Hello. Can you hear me? Yes. Can you use your handset mode, please? Okay. Is it better now? Yes. Please go ahead. Sir, just wanted to check this North Clinker expansion. What is the progress on that? Yeah. Thanks, Rajesh. We did Clinker expansion in two sites. One was in Risda. That's done and dusted, and we have the capability to take the Clinker to 11,500 tons. And in Nimbol, which is in North, we have taken the Clinker expansion to 6,000 TPD. Happy to report that we have already touched 5,700 tons per day throughput. So Grid Integration is under shutdown right now. Once the shutdown is done, by I think January, February, Q4 this year, target is to get to 6,000. Overall, Clinker capacity for the company would be 28,000 tons Clinker in East per day and North 12,000, 9.5 million tons in East, and 4 million tons in North. Was talking about the slag clinker brownfield expansion in North, which you are planning to take up by 2026. Talking about the brownfield expansion. As informed to you in the previous call, I'm looking at an expansion for the company happening end of this fiscal or early part of next fiscal. So the technical work is all happening currently, and then sometime end of this year, early next year, we should start our next expansion. How much time it will take for that project to complete when you start? Rajesh, I'm sorry. Just the last sentence, please. Can you repeat it? How much time it will take for commissioning once you start the project? I'm looking at close to about 18 months for the timeline for commissioning. Okay. Okay. That's all from my end. Thank you. Thank you. Thank you. We'll take a follow-up question from the line of Shravan Shah from Dolat Capital. Please go ahead. Hi. Ma'am, you have mentioned that we have seen a INR 50 cost reduction through Project BRIDGE 2.0. So this is QoQ we are talking about, and how much more further reduction are we looking at in the second half? Shravan, BRIDGE 2.0 agenda just to record the major heads. We were looking at the Grid Integration Project covered in my speech, Slag cost reduction, distribution cost reduction. These projects are well on track against a budget of INR 50 per ton, which we had shared earlier. In H1, we are already trending at IINR 50. We hope to see some upside on this figure. In H2, we should be looking at about INR 75 per ton given the pace at which these various projects are moving. Okay. Got it. And just to check this Chittorgarh expansion, so previously we have mentioned 2-2.5 MTPA Clinker, and in terms of the grinding level, broadly, it would be a 3.5-4 million ton that one can look at. And broadly, in terms of the CapEx, it would be a INR 1,500 crore-INR 2,000 crore kind of a CapEx? Yes, Shravan. And those specific updates over what we shared in the last call. Okay. Okay. Got it. Thank you. Thank you. Ladies and gentlemen, to ask a question, please press star and run on your phone now. I would now like to hand the conference over to Ms. Madhumita Basu for closing comments. Over to you. Thank you. Yashasvi. In conclusion, I would like to share we are cautious about the demand outlook and pricing dynamics in the cement industry. While the union budget has announced an infrastructure investment of INR +11 lakh crores, actual disbursement of funds and project execution on the ground remains a key monitorable. Despite these challenges, our strategic priorities will continue to focus on premiumization, geomix optimization, enhancing fuel mix efficiency, strengthening our brand, and maintaining focus on cost excellence. Our investor relations team will remain available for any further clarification required. I take this opportunity to wish you all a happy Diwali and a prosperous New Year. Thank you for being with us today. 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.