Ladies and gentlemen, good day, and welcome to the Shree Cement's Q1 FY 2024 earnings conference call, hosted by ICICI Securities. 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 would now like to hand the conference over to Mr. Navin Sahadeo from ICICI Securities. Thank you, and over to you, sir. Thank you, Karen. Good morning, everyone. On behalf of ICICI Securities, I welcome you all to the Q1 FY 2024 earnings call of Shree Cement. From the management, we have with us Managing Director, Mr. Neeraj Akhoury, and CFO, Mr. Subhash Jajoo, on the call. Without any further ado, I hand over the call to management for their opening comments, followed by interactive Q&A. Over to you, Akhouri ji. Thank you. Thank you, Navin. Good morning, everyone, and thank you for joining this call. I welcome all of you to the earnings call of Shree for the quarter ending June 2023. To begin with, I think Q1 was a challenging quarter for Shree, not for the operational performance, but for the some other reasons. The income tax department conducted a survey operations at few of the company's location from 21st June until 26th June. During the survey, the income tax officials were extremely cordial and with all our employees. Like to highlight that this, in this survey, no mobile, laptop or computer were seized or scanned when the survey was going on. Extended its fullest cooperation to the Income Tax Department, and we are, we have supplied all information that has been desired by them. We would like to reiterate on this platform that Shree is a tax compliant company and has never been charged any penal interest or penalized by the Income Tax Department since its inception. The company has also received a notice from the Ministry of Corporate Affairs for the inspection under Section 206(5) of the Companies Act, 2013. We will be complying with the actions given. As the matter is still in inquiry stage, we would not be able to share further details, and my request would be to respect this position of ours today. We are happy to share that during the last quarter, we successfully commissioned the trial production of our clinker unit at Purulia, that's been more in line with the timeline committed by us. With commission of this unit, total cement capacity has reached almost like 50 million tons for 9.9 million sites. The current macroeconomic environment in the country, combined with government's focus in supporting growth, is supporting growth in cement sector. Accordingly, we are accelerating our work plans to ensure that we seize the opportunity to the maximum. The board meeting held yesterday has approved additional capacity addition program involving the total CapEx of roughly INR 7,000 crores. In this phase, we will be adding about 3.65 million tons of clinker in Pali, Rajasthan, and which will also give us and also a cement capacity of about 6 million tons, both in Pali, as well as in Etah district of Uttar Pradesh. In addition to that, we'll be adding another 6.65 million tons at Kodla in Karnataka, and a cement capacity of 6 million tons in both Kodla and Bangalore. With this, we should be very close to a 68 million ton capacity at an India level. Both these plants are extremely modern and very designed on world-class technologies. For example, both will have a waste heat recovery-based power plants attached to them. I'm very happy to inform all of you that the company is also planning to diversify into Ready Mix Concrete business. We already constituted an organization for Ready Mix business, as well as plan to set up five units of Ready Mix in this year. Also would like to inform that the work at the existing project locations is going on very well. The Nawalgarh integrated unit is nearing completion now. We should be able to see this commissioning as per schedule in quarter three of this year. Guntur is also progressing strongly. The commissioning target of Q2 towards 2024-2025 will be complied with. We are very much on track to reach our ambitious goals of taking our capacity beyond 80 million tons in the coming years, and aggressively charting out action plans to achieve the same. Many locations are being continuously surveyed. We are in the process of now finalizing our next phase of growth beyond 68 million tons that has already been announced. We shared with you in the last call that Shree has started a new journey of remaining the greenest and technology most advanced cement company. Company is continuously investing in renewables in order to increase its share of green power. The same increased from 46% last year to about 56% during Q1 2024. I believe this is not only highest in the industry, but most probably even globally. We will be adding significant capacity of green power in the next 12 months, which would further increase this percentage. The company's focus on decarbonization remains solid. We have been able to reduce our Scope 1 emission to 502 kg per CO of CO2 per ton of cementation material, representing a reduction of around 4% compared to last year. The company is also steadily increasing the usage of alternative fuels, with an aim to take our company at an average of 15% of alternative fuel levels. Work is also progressing strongly on the technology side with our CRM app, Udaan, already undergoing trials. The migration from Oracle to ERP Business Suite SAP HANA is also as per schedule. We are deploying various advanced data solutions in our manufacturing, logistics, and sales operations. On the operational front, Q1 is again a healthy quarter, with sales growing by about 19% from 7.5 million tons - 8.9 million tons. Utilization levels, very happy to share, has also moved close to 80% now, 79% to be precise. Despite lower demand, industry was not able to increase the price realization. The same decreased by 4% on a year-over-year basis. Fuel cost, of course, is a rainbow. We are seeing about 10% reduction of fuel costs in this quarter compared to last year. The softening of fuel prices, coupled with increased volumes and higher use of alternative fuels, led to EBITDA increasing by 14% from INR 892 crores last year to INR 933 crores in the quarter ending June 2023. EBITDA per ton is more or less stable, standing at about 1,046 per ton, as against 1,092 last year. On sequential basis, sales were almost flat at 8.9 million tons in the last quarter, against 8.8 million tons in the quarter last year, quarter four of last year. Realizations were down 2% during this period. Total EBITDA increased from INR 892 crores - INR 933 crores, due to decline in fuel prices. With the current petcoke price around 1.80 per TV, we expect a downward trend in expenses, unless some untoward event happens globally. Given the overall positive economic environment, strong focus on infrastructure and housing, cement demand is expected to remain very strong. Higher spending of central government ahead of the general elections in 2024, along with good rainfall leading to healthy rice of plant production, is expected to boost cement demand, which we expect to be in double digits for the financial year. With this, I would now open the floor for Q&A. Thank you very much for supporting us in this in the last quarter. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and two on their 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 Shyam Sundar Sriram from Franklin Templeton. Please go ahead. Yeah, hi, good morning. Thanks for taking my question. Very strong volume performance. Congratulations on that, for the entire team, sir. My first question is on the CapEx announcement. We, even in our annual report, we had spoken about reaching the target 80 million earlier than F30. The latest announcements are on those lines. What has changed in the industry or the competitive landscape that we are accelerating our CapEx plans? Therefore, do we now revise our F30 aspirations upwards? How do we think of that? You know, a large part of acceleration of our CapEx is due to a very strong demand, cement demand evolution that I do see, not only in this year, but in years to come. We see that India has started strongly with investing in infrastructure, but also in housing development, and also in there is a resurgence of CapEx for different industries and commercial and commercial buildings. We are a little more optimistic now on the demand evolution in the next few years, and that is giving us confidence that we should be able to accelerate and pre-close some of the CapEx programs that we've announced earlier. Understood, sir. Therefore, does that also move up our F30 aspirations? At this point, as we said, we have said we will go beyond 80 million tons. As I said, we continue to identify various locations, various places where we should be going. For example, there are certain markets where we would be seeing like Uttar Pradesh. That's how we feel that currently the aspiration will be to reach your 80 million tons. In due course of time. With the more visibility on how the demand has moved, we will of course revise that target. India is a growing country, growing the cement demand, so I think 80 million tons is only the first stop. We will, as we reach there, again, review our situation and accordingly plan our growth. Understood. Sir, the next phase of growth will be more in the central region, UP, the, in that, in that region, and the west as well, that we are seeing now from the Gulbarga side. That is how we should think about it, sir? Well, we should be looking at west as well, which includes Gujarat market, for example. Yeah. We should be also be looking at some of the locations in central zone, including Madhya Pradesh. As you said, we are already going to be building a plant in Bangalore. We will continue to become a pan-India, with presence across regions. That is how we are tracking our plans. Sure. Sir, just one question on this, our latest announcement. The Pali and Etah are quite far off in that sense, from a freight cost perspective. This would be because, Pali would be a greenfield, I would presume. The reason for that is because of the deposits available, in Pali for further expansion, sir? Yes, yes, absolutely. Rajasthan will remain country's one of the major center for limestone. For any clinker requirement, we will need to look at those states where we have limestone. We have, we have the limestone in Rajasthan. Etah, despite the distance, is a very attractive market, and so seeing clinker from Pali, it should be able to give good realization for us. Understood. The other point, our utilization levels have been nicely going up over the last few quarters. You have also spoken about it as one of the key strategic priorities for us. If you can share some regional flavor, as in which regions we have gained share, some perspective would greatly help understand how the evolution of our business per se? You know, the improvement has been seen across India. I would be wrong to say it is a region-specific demand and investment sales growth that we have seen. Having said that, in the region, in east, we are almost nearing to the full utilization level now. Right, we moved from 66% last year, same quarter, to 92% now. In north, also we have moved closer to 80%. And in south, we have moved closer to 70%. Yeah, 68%, 70%. As you see, we are kind of moving across India. The growth is across India. Wonderful, sir. Wonderful. Thank you for that, sir. Before I, just one housekeeping question. Our purchase of stock and trade has sharply increased, sequentially. Did we resort to buying some finished cement to aid the demand, or is there something else? If you can also help with the cement revenues alone for this quarter. Thank you. Sriram, the stock in trade, that has increased because, one coal shipment, which we have proposed, that has been sold in normal course, and that is why you are seeing that figure. The same amount is also included on the revenue side. Thank you, sir. The cement revenues alone for the quarter? Thank you. Yes. Cement revenue, I can give you a rough figure. it is INR 4,771 for this quarter, as against INR 4,989 for last year. Thank you, sir. Thank you very much. Best wishes, sir. I'll fall back into queue. Thank you. Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead. Hi, thanks for the opportunity. My question is on the expansion. While you have mentioned that the units of 3.65 million ton each, is it like 10,000 TPD, or could you specify how much TPD is that? Yeah, it's 10,000 TPD. Okay. 365 factor is taken for the 3.65. Hello? Yes. Yes. Okay, okay. Also, like, is there any incentive tied to any of these units, any of these four grinding units and the clinker unit? We are approaching the limit. At this moment, we are not able to confirm it, but I'm sure, once we have an agreement with the governments, be it in Rajasthan or be it in UP or be it in other states, we should be able to give the details. Okay. Also, I was just wondering, in south, the Guntur expansion, which you did, had only 1.5 million tons clinker for 3 million in grinding. Here also in this unit, you have 6 million tons grinding for, let's say, 3.5 million in clinker. Usually, south, what we understand, is like a lower blending market, like 1.3x to maybe at best 1.4x. How do you think you will manage this 1.75x blending, based on this expansion? Or is there some further clinker that is supposed to come on this? The site plants will get clinker, of course, from Gulbarga, but we also have plans to bring clinker from other units and be able to utilize the grinding capacity to the fullest. Is the understanding right, that the blending in these plants will be 1.3x, 1.4x in line with market? Yeah, 1.4 looks to be reasonable. Yes, you can, you can make that assumption. Yes. Okay, okay. Also, like, any of these units coming in subsidies, like how the Purulia unit is? I beg your pardon. One question, please. Like the Purulia grinding in West Bengal in the subsidy, any of these units also come in subsidy or are they all in standalone? No, all the units we have just declared, they are all coming in the main company except the Bangalore unit, grinding unit. That may come up one of our subsidiaries. Okay, sure. Grinding units at Bangalore and Etah, that may come up in the subsidiary. Remaining all clinkerization units are going to come up in the main company. Okay, understood. Just lastly, on RMC, like, you're getting into RMC after a long, long time now. What's the strategy here? Like, you are looking to kind of... Generally, where we have seen UltraTech has been very aggressive in the RMC business. We anyways established players like ACC Nuvoco. Would you be, like, fighting with these guys, or would we be getting more share from the unorganized market? What's the strategy here? Be more to go into for the high performance concrete, but also in what I would call the mass market concrete. It is not right for me to say whom I will be fighting with. There is enough market room for everybody to grow in the Ready Mix Concrete market, especially in the urban towns of India. But with the high performance concrete, of course, there are not many suppliers, and therefore, the competition is somewhat limited in that segment. Okay, understood. I'll come back in the queue. Thanks. Thank you. The next question is from the line of Satyadeep Jain from Ambit Capital. Please go ahead. Hi. Thank you. Just a couple of questions, Mr. Akhoury. First one, the strategy in the last few months, the strategy had been to raise market share, raise utilization levels. The company is now adding almost 20 million ton capacity from 43 - 45. Given this large capacity increase, would the intent remain the same to increase utilization levels compared to historical levels? Even if, let's say, the demand scenario was not to play out as we've seen in this year, would the company continue to look at market share gain as a strategy or, raise utilization strategy? The market share is a resultant of the capacity shares of various players, right? Their ability to supply to those places where there is a demand acceleration. I think our supply chain and distribution fee is quite strong. We have those muscles, including long relationships with many of these partners, the transporters or the dealers and distributors. What we expect is a more of a stable market share strategy, but with somewhat increased due to new capacity additions that Shree has now including Nawalgarh in north or Purulia in east or Gulbarga in south. That is how I see it. It's not going to disturb the market, but at the same time, the capacity share to market share ratio will be maintained. Secondly, on the expansion in the regions you're looking at, starting with Bangalore, any thought from Gulbarga? Usually, the national market is maybe Maharashtra, but you're looking going 600 km south to Bangalore. What's the strategy behind looking at some of these markets in Madhya Pradesh also has historically been a challenge for cement in Satna? What is the strategy that now that you're talking about Madhya Pradesh also, how do you plan to expand in that particular market? Yes. The strategy is based on our set of assumptions of which local market is positioned to grow at what pace. For example, we believe Bangalore as a market is still growing and will continue to grow very fast in the coming years, in the coming decades, due to the fact that many investments around Bangalore will be coming. Yeah. We also looked at the historical trends of those markets. What we also see is our competitive advantage in terms of delivery cost, and very important, our position in terms of delivery cost, given the specific location. Wherever such things are found favorable is what we select for our growth footprints. Be it Bangalore or be it Gujarat or be it MP tomorrow, it is all based on a well-structured strategy which takes us closer to the market, closer to the high commercial centers, but also those commercial centers which have reasonable rationale that they will grow, also grow in the long term. From Madhya Pradesh, there is no asset position which we have agreed right now. Would that be so inorg that you're looking at from Madhya Pradesh? No, not at all. I mean, currently our scope of discussion is mostly on organic growth plans that we have. To our organic growth plan, we believe we can reach this beyond 80 million tons additionally. Okay. Thank you so much. Thank you. The next question is from the line of Pinakin Parekh from JP Morgan. Please go ahead. Thank you, very much, sir. My first question is, can you give us a sense of the CapEx that was announced? Where are we in terms of, the particular modules, equipment ordering, power plant ordering? Has already been everything been achieved, or it will be done over the coming months? Just after this call, I'll be signing orders for the equipment supply. Yeah. We are well positioned. All the formalities, including evaluations and engineering, have been done. By tomorrow, you should be seeing that we are well on the way to start ordering of equipment. Sure, sir. My second question is, so far with the results season, we have seen very different volume growth trajectories from different companies. Regarding Shree's volume growth of 19% seen in this quarter, can you give us some color of the regional volume? Was it higher in one particular region? And within that, can you also give us a sense of pricing? Which markets have seen pricing corrections in the month of July and the outlook for the same over the coming months? As I said, in the first question also, Shree's growth has been more or less consistent across regions. When I look at north or east or south, we have grown in all these places in double digits, in higher double digits. North, we, it is closer to 12%-14% growth, 12% growth. Whereas east, with our footprints, we have been able to grow at a little higher than 25%. South also is close to 20%. Overall, 19% is equally distributed amongst the entire India, and it's not focused on one specific location. Sure, sir. Sir, last question from my side. Very strong volume growth. The industry demand is very good, but the pricing has been weak. Now, all the large players are bringing on new capacity and ramping up new capacity. We had one of your peers last week comment that they lost market share in Eastern India, and they want to focus on regaining volumes and market share. In this industry background, how does Shree look at the trade-off between prices and volumes? Would it cede market share in order to keep pricing, or does it want to gain market share or at least grow faster than the industry, even if it comes at the cost of pricing? I think Shree has thus far followed a very rational and logical approach. Pricing and volumes both need to be balanced very well. It is wrong to say price over volume or volume over price. This is not the strategy. This is not what we are doing. What we are doing indeed is, and as I said in the last call as well, is now really focusing on the special products of our company. What we are doing is to make sure that Shree's presence is not only in one segment or one price segment, but also in other price segments. That is something that we are executing strongly. Our premium products, as we said, in this 19%, a much higher share has also come from premium products. The growth has been quite strong in the premium product segment of options. That is the strategy that we are following. We would fully respect this thought that volumes for the sake of volumes, we should not sacrifice prices, and that's what we continue to follow. Understood. Thank you very much, sir, for this call. Thank you. The next question is from the line of Ritesh Shah from Investec. Please go ahead. Hi, sir. Thanks for the opportunity. Sir, my first question is pertaining to how do we look water as a commodity, specifically given the expansion announcement at Pali? What is the source of water, and how do we take a call, say, 25, 30 years of plant life? That's the first question, sir. You know, I mean, we may not be able to give you full details, and I'm very happy to write to you separately. There is no Pali have a confirmed municipal source of water as well. That's what we have been using in most of our other units. Water source, but more specific answer to this is something that I will need some time to give it to you. My engineering colleagues are not with me. I'm sure, they should be able to respond to this adequately. Sure, sir. I'll circle back on this later, though. Sir, second is I missed out on the point on incentives. I think somebody did ask. For the incremental announcements, do we have incentives from the state governments? Has it already been locked in? No, not as yet. You know, I said that we are under discussion with the different state governments and very soon we should be able to agree on the incentives that all they are available in those states. Right. Third and last bookkeeping questions. Would it be possible for you to give the fuel mix, coke, and thermal coal for FY 2023 and FY 2022? I think there's the studios were there in the annual report before, but now, at least we couldn't locate it. Yeah. The coal mix for the current quarter is around 81% is petcoke and balance is our alternative fuel. Whereas last year it was around 60% petcoke, 30% coal, and balance alternative fuel. This is helpful. Thank you so much, sir. Thank you. Thank you. The next question is from the line of Rajesh Ravi from HDFC Securities. Please go ahead. Yeah, hi, sir. Thanks for taking the questions. First question is, you know, when you say the non-cement revenues, it means you exclude the incentives and other operating income, which we generally club along with, you know, for comparison with other cement companies. As I see for last year, FY 2022, your merchant power sales have more than doubled to INR 800 crore and have grown considerably over the last two, three years. How should we look at this? Because in this quarter, when you're saying INR 4,771, this is just the cement revenues. Should you not be clubbing the incentives and other operating income and just exclude the power revenues? Hello. Yeah. Hi, sir. Yeah, for looking at the cement revenue, obviously, those things have to be helped. Right now, we'll not be in a position to give you the power revenue separately. However, more or less, it is uniform, spread across all quarters. Mm-hmm. No. last year. Also for power sales, last year also. Last year, the power sales number have doubled. You know, how do we look? Because we generally want to exclude only the power revenues when we are talking about cement, because other are part of your ongoing cement business, other operating income, incentives and all. That is one. Second, could you talk on the in terms of two questions. First is incentives for the current ongoing expansion, Purulia, Rajasthan, and the Andhra plant. What sort of incentive structures are there in place for these three plants, which are about to get commissioned? We will not be able to share the incentive structure for the existing plants, which are still not yet been commissioned. Mm-hmm. Yes, because once the commissioning is start, then only we'll be able to share the details. Okay. For the power revenue, it will be difficult for us right now to give it separately. Mm-hmm. Yes, we are in discussion with our management. Maybe from, once we get a go-ahead, we will give further guidance on, or maybe give you the revenue separately, so it is better for you to understand the result. Got it. Got it. Got it. We understand this question, gentlemen, we clearly understand this question, we are making some of the changes in the way we present our figures. From next quarter, you'll see a little better levels of transparency so that such questions are avoided. Great. Great, sir. Also we see that now your Purulia will be in a subsidiary, even two more grinding units will come up in a subsidiary structure, because they will all be sizable from the company perspective, should we not talk of consolidated volume numbers, to make a more rational, you know, analysis Q2 onwards? Yes, we will definitely. We appreciate the point, and we will definitely take it into consideration. Till now, the even consolidated numbers were not that materially different. Yes. That is why the focus was only on the standalone. Going forward, more and more grinding units comes under the subsidiary, then we should start talking with on the basis of consolidated. Okay. Sir, you talked about the coal mix. Could you give us the per kcal costing in this quarter, and how did they fare versus Q4, and what is the status in Q2? Yes. In the current quarter, the coal per kcal cost for coal was around INR 2.37, as compared to INR 2.56 in the March quarter, and last year it was INR 2.64. With current, the current cost is around INR 1.8, INR 1.85. Going forward, we will see the benefit of this lower cost in the coming quarters also. This is your blended cost, INR 2.37, which you mentioned, or it is just the thermal coal costing? It is the fuel cost only, petcoke. Fuel cost. Okay, petcoke, which is 80%-81% in this quarter. Okay. Sir, you are 55%-56% on green power. Just wanted to understand, what is the average cost of your green power? Cost of green power. INR 45, around INR 45. Okay. yeah, all is from WHR? It is a mix of WHR, solar, as well as wind. Okay. No, I just wanted to mention, is it like on the total basis average, you are including INR 0.40, INR 0.50 type of electricity cost on this? On the total of green power, yes. Okay. Great, sir. Thank you. I'll come back in queue. Thank you. The next question is from the line of Jasdeep Singh from Nomura. Please go ahead. Hi, sir. Thank you for the opportunity. I have a couple of questions on the current quarter. I wanted to understand that, you know, this quarter, Shree Cement has reported strong realization growth, 3% up sequentially, whereas your peers who have reported so well, have reported a 4% decline. I wanted to understand whether this realization growth is coming largely from the product mix and higher trade sales, or, you know, there has been some structural changes, because we know that you guys are working on upgrading the realization. Can we consider this as going forward, or it happened only in this quarter? First question is on that. Requesting the participants to please stay connected while we reconnect the management back to the conference. Thank you. Requesting all the participants, please stay connected. We have the management connected. Sir, we have the question on line. You may please go ahead. Hello. Yeah. Yeah, I was disconnected. Can you just repeat the question again? Sure, sir. Sure. I want you to understand that this quarter, Shree Cement has reported strong realization, with 3% up sequentially, whereas, you know, other peers are reporting 4% decline. I wanted to understand whether this is just because you have a better product mix and a higher trade sale, or there has something structurally changed with the realization policy. Can we expect such strong growth in the, you know, year going ahead? I think, you have joined late, because at the beginning of the call only, we have clarified that the realizations are down by 4% as compared to last year and, 2% as compared to last quarter. Okay, sir. Secondly, on the capacity, sir, what sort of internal IRR are we building for the brownfield Kodla and greenfield Pali project, and how much WHRS will be in these plants? Hello. Yeah, the WHRS capacities are yet to be worked out, but both the units will be coming up with WHRS. More or less, it will go out around 40 MW-50 MW, something like that. Okay. 50 MW is what we see on this. On the project financials, we will come back to you. We are not carrying that paper now, yeah. You asked a question on the IRR, right? Yes, sir. I'll get back to you on offline later. Lastly, sir, I wanted to understand, Mr. Ashok Bhandari has joined as Senior Advisor. What sort of role will he be playing in the management? Just wanted to get clarity on that, sir. Mr. Bhandari has been a very old associate, a very old colleague in Shree. What we have got him is, as we now go from a company with very modern technologies, including SAP HANA, there are topics on which his expertise will be of help, including the topics around the CapEx funding, on topics around developing with our existing CFO and account heads, on the accounting norms and principles. There are many topics that which, on which we are working together. As I said just now that, we will come up with a better format for your presentation from next quarter, when we will be able to give you different, segment-based analysis, from power, also cement. All this is where Mr. Bhandari's expertise will be important to us, and that's why we have got him as a senior advisor. Thank you, sir. Thank you so much. I have other questions. I'll join the queue. Thank you. The next question is from the line of Hrishikesh Chandrakant Bhagat from Kotak AMC. Please go ahead. Good morning. Thank you for the opportunity. Last few calls, we spoke about the journey on brand consolidation. If you can help us understand, where are we on that? Second question is, there were few, I think on the moment-to-trade side, the journey, what kind of investments do we envisage? Say, probably, when I mean investment, it not be CapEx spend, but broadly on probably A&P or to some extent, technical staff to, or ground staff on that front, how much do we envisage over the next two, three years? Thank you. As I said in my last call as well, Shree's future journey is how to become a multi-segment player in India. When I say multi-segment, it is to make sure that you are able to bring sharper value proposition products for each requirement and each needs in the markets. That is where I said about special products. Our focus on special products continues. In fact, last quarter, we have seen healthy growth of special products in our company. This is not being done without any effort. A strong force of about little more than 500 people has been put in the field now, which will be working on our how can we help our consumers in construction, which we call technical services. This is this force is going across markets, meeting influencers, meeting end users, the consumers and other actors in our in our in our markets, to make sure that Shree equity and product quality is well recognized, is accepted, is, and if there is room for improvement, that is what there is, then we also improve. All in all, a lot of efforts are going on in to create a stronger brand equity for the company and for the products. We have engaged with some of the world-renowned groups, including McCann, to work on our communication strategy. You should be able to see some the campaign getting launched sometime in the first quarter with where we are very clear on the new brands and our new product extensions that we will be launching in the market. In all, on the marketing front, on the market front, significant work is being done both for supply chain as well as for improving our brand equity scores. Thank you for your support. You will see that, we should be able to, become from a single segment player to a multiple segment player in times to come. Thank you. Thank you. The next question is from the line of Navin Sahadeo from ICICI Securities. Please go ahead. Yeah, thank you for the opportunity. Sir, in response to the endeavor to, like, you know, overall brand, improving the brand, premiumization and in general, the brand equity, are we also looking at reducing the blending or in general, because I believe we also launched OPC 53 grade sometime back in the north market. As you said, if you're focusing more on premium or high-strength products, is there a possibility that the fly ash or the blending ratio will tend to go down here on a little bit because of overall premiumization aspect as such? No, I don't think so. I don't think so. You know, the word I use is not premium. The word we always use is sharper value proposition or special products, right? Each special product has its own market, has its own set of consumers, and that is what we want to cater. Those products, because of the sharper value proposition, are more expensive, is because of the nature of those products, right? That's part number one. Part number two, will it impact us, the clinker ratio? I don't think so, because the demand are also growing, and the percentage of percentage of lower cementation products, including OPC, as a percentage will remain positive going forward, et cetera. No, as a company in general, it should not adversely impact our clinker ratio. What it will do is to make some of these products highly specialized. OPC 53 is an example. Incidentally, we have not yet launched OPC 53. It will be launched in the coming months. We are still formulating the mix. We We are still working on how do you create a much better product from which is, which we not only the minimum standard of OPC, but goes beyond it. That is something that we are working on with our R&D and the quality department. That's how I see it. No, it will not adversely impact our clinker factor. Having said this is the current situation. Please note that the Indian market is expanding rapidly, and most of the expansions are most of the new projects are large projects, fast projects, and they have a specific requirement of the product type. You talk about dams or roads or bridges or if you have large construction, there will be specific requirement of the product characteristics, which is what we are trying to meet. Therefore, as the market evolves in the future, it becomes much more in terms of infrastructure and all. As a percentage of total cement demand, then most likely there will be an impact on the clinker factor as well. Thank you. Sir, second question was on the specific heat consumption, which you disclose in annual, like, you know, in the annual report, in terms of kcal per kg of clinker. I think there is a very steady increasing trend. In FY 2019, if we consumed, let's say, 719 kcal per kg, last latest annual report suggested it's going to 751. I believe in general, our energy requirement at clinkerization, while conversion ratio, of course, has been increasing great on that, as in the clinker factor has been going down, but the specific heat consumption at clinker is rising steadily. Is there any specific reason for it, deteriorating quality of limestone, or how should one look at it? Thanks. We will just check with you. For the current quarter, I don't think it is around 750. This quarter, it's the number is around 740 kcal. No, no, I was talking about only annual basis, not quarterly basis. In the annual report, FY 2023, it says 751. Whereas in FY 2019 annual report, it was 719. I'm saying it has been going, increasing steadily. Is there any specific reason or? We will just check the reasons for this increase and get back to you. One of the very likely causes for such increase is also a higher usage of alternative fuels. Yeah. Currently, we have not come to those levels at which alternative fuels should show so much impact. Over the years, we've also added new capacities, be it in Jaipur, be it in Kodla, and so on. Assuring all of you, there is a very, very, very high focus on heat consumption, and how do we manage it, how do we control it. We have launched a campaign called WeLead. In the WeLead, one of the specific topics for us to improve on is heat consumption. If there will be a deterioration, it is largely because we also be simultaneously increasing the alternative fuel consumption. That's all. Thank you. Thank you. The next question is from the line of Prateek Kumar from Jefferies. Please go ahead. Hello. Yeah, good morning, sir. Thanks for the opportunity. Couple of bookkeeping questions. There is this drop in depreciation during Q1. What was specific reason for this, and what is the annual number we are looking at for depreciation? The depreciation for the total annual depreciation for this year should be close to INR 2,000 crore. However, whenever, because accelerated depreciation actually follow the WDB method, whenever there is a capitalization in the quarter, the depreciation is higher, and then correspondingly for next year onwards, it gradually reduces. That is why for the depreciation number for this quarter is down. As and when the new unit comes up during the year, like Niwai, that is going to come up maybe in Q3, then the depreciation figure will increase. For full year, it should be close to INR 2,000 crore. Thank you. On second question on incentives, your last year incentive number was INR 120 crore as annual report, versus INR 160 crore-INR 170 crore previous year, and a INR 50 crore during years prior to that. I mean, I know that you book incentive based on the ships. Is there a general decrease in expectation of annual incentive now, or for some reason we didn't receive it and we should receive it later, that's why we're not booking? Incentive numbers will remain around this level, only INR 130 crore-INR 140 crore. As we go ahead, the incentive for some of the older plants gets over. Again, because of new commissioning, some of the states have an incentive policy, and we get it. Overall, for current year, we believe the number should be around INR 140 crore. For the ongoing set of expansion, we should expect that number to remain in the same for 2025, 2026 also? For the next set of incentives, as we have said, that we are still in negotiation with the government. What the final incentive will be, it is difficult for us to commit right now. Right. The last question on premium segment, which moved to, like, 9% of your trade mix this quarter. Firstly, what was the trade mix for the quarter, and what is the target for this number of 9% by end of financial 2024? As we said, we are working to bring it closer to 15%. I so far, we have reached somewhere around 9%, yeah, somewhere around 9%. Around 9%. 9%, 9% yeah. We have reached there. Last year we were at about six odd percent. Yeah, we have traveled from six to nine, and this will continue in the coming months also. I expect in the coming year, which is FY 2024, 2025, we should be somewhere around 15% with special products. Trade mix is 79% for this quarter. Thanks, sir. These are my questions. Thank you. Before we take the next question, I'd like to remind participants to please limit your question to one per participant only. You may come back in the question queue if you have a follow-up. The next question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead. Hi, hi. Thank you. All my questions have been answered. Thank you. Mr. Rahul Gupta, you may please go ahead with your question. All my questions have been answered. Thank you so much. Thank you. The next question is from the line of Devesh Agarwal from IIFL Securities. Please go ahead. Thank you, sir, for the opportunity. Just in terms of your capacity addition and expansions, I wanted to understand, in last five years, a significant capacity addition happened in the east, and you're talking about a very high utilization level as well. While over the next two years, you are not looking to add anything on the east side. What would be our strategy for the east, and would that be taking priority over a few other regions like west and central? It has just been commissioned. As I said, it will take some months or several months before we are able to fully utilize our Purulia capacity. The East is one of the priority markets for us. As you see, even in last quarter, our growth in East has been over 10%. Yeah. The East will remain a priority market for us. Once, as I speak, we are also looking at some more sites in East. We have a capacity in Chhattisgarh, in Odisha, in Jharkhand, and in Bihar, I mean, all over there. More or less, we have covered the entire East, entire East market. Depending on how Purulia stabilizes, we will also look at few more options for East markets. Understood. Sir, any trends on the July pricing, how the prices have been in different regions? Prices in cement are always under pressure. That's how I feel. We are seeing, we have been able to implement some price improvements, increases in certain regions in India, including that. By monthly, we'll be able to see how much we are able to successfully pass to the market. This is a little too early to comment on it. Yes, there will always be a focus on the seizing opportunities wherever there is possible to increase prices. Understood. Thank you, sir. Thank you. We'll move on to the next question. That is on the line with Shravan Shah from Dolat Capital. Please go ahead. Thank you. Before the question, just a request, even previous participant has also requested in terms of the console numbers, and which we mentioned what are we referring. Also requesting, if possible, to share the at least last couple of quarters console volume and maybe couple of years console volume to understand the... Which will help us historical trend. That was the one request. Second, in terms of the question, firstly, Shravan, you can send us a mail, and we will send you the console volumes. Sure, sure. Thank you. Thank you very much for that. Sir, the first question is if you can help us in terms of the overall CapEx for this year, FY 2024, 2025, including the INR 7,000 crore that additionally we need to spend. How much that will come in the plan console, if possible? That is one. Also the break up of this 6 million ton grinding. Will it be a 3 million ton across the four locations? The intention is to have grinding capacities of 3 million tons in most of our markets, as a standard, as a standard size. There are some markets where we will be going a little bigger, or in future, it will go little smaller. Standard, standard for us would be around 3 million tons of new grinding capacities. The second question, I understand, is what is the CapEx plan for 2024? We should look at 2024, we should look at about a cash outflow of about INR 3,500 crore. For 2025, sir? FY 2025. Almost similar amount. Okay, okay. Same amount. Okay. Okay, that is great. Second, in terms of the previously we mentioned that 36 million ton kind of a volume we were looking at for FY 2024. Definitely this quarter we have done much better. Will this number one can look at 37, 38 ton for this year? That is one. Some data points on the lead distance for this product and blended cement share for this product. On the targets, thank you very much. You know, we still continue to remain at 36 million ton target. We are hoping we should do slightly better. For a guidance, I would still believe 36 million tons is the right volume to aspire for whole year. On lead distance, there has been a reduction compared last year, though very minor, you know, just about 7, 8 km for channel reduction. This is one topic on which we as a company has to work little more, both through internal work, but also by putting up just as example, a Bangalore unit will, of course, reduce our lead distance to that extent, because we will be closer to the market. We will continue to do that. For the last quarter, we have gone down precisely by 14 km. There are more than 20 parties in the conference. Is that okay? Hello? Yes. Thank you so much. That was the last question. I would now like to hand the conference back to the management for any closing remarks. Thank you very much, everybody. As always, it was a great pleasure to interact with you. Hopefully, we have been able to answer and give clarity to most of the questions that were asked today. Do not hesitate to contact us in case you need any further clarification. As I said in my opening remarks, and I conclude with this, that we rest assured that we as a company, we are managed very professionally, and we are following the highest standards of corporate governance. We will continue to do that. We continue to respect the fact that Shree has a long journey ahead, and therefore, every step will be taken to improve our image, our reputation, and our brand equity, and our leadership in cost, as well as our leadership on sustainability criteria. Thank you a lot, everyone, and I look forward to see you at the end of the next quarter. Bye-bye. Thank you very much. On behalf of ICICI Securities, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.