Ladies and gentlemen, good day and welcome to the UltraTech Cement Limited Q3 FY 2023 earnings conference call. We must remind you that the discussion on today's call may include certain forward-looking statements and must be therefore be viewed in conjunction with the risks that the company faces. The company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, other places of subsequent development, information or events or otherwise. As a reminder, all participant lines will be in listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Atul Daga, Executive Director and CFO of the company. Thank you. Over to you, Mr. Daga. Thank you so much. Good morning and welcome to everybody to our earnings call for Q3 FY 20 22. This quarter, if I can sum up, in few words, it is much ado about nothing. That is what I would want to describe the quarter that has gone by. Coming to the brass tags, volumes are good, costs remain extended and prices are stable, though we would have wanted them to be better. The focus of the industry is now shifting on to managing its costs. Let's talk about the emerging scenario on costs. The biggest one, of course, is fuel. There are multiple factors that we need to keep in mind. The ongoing war situation, as you know is one of the reasons for global fuel supply upsets. The only silver lining is that we have seen peak prices behind us and don't expect too much of volatility. A small decline in prices of fuel and we start celebrating. This is not the wisest things to do. These small corrections are still significantly higher than the normal cost and quite often temporary. Like the stock markets, it is not possible for everyone and anyone to catch the bottom prices only. Second factor, of course, is China. You're all aware, China is going through the most turbulent time with COVID and industrial activity has come to a grinding halt. The economy has just opened up, I'm sure the consumption will rise. Some news articles said that 80% of the country had been already infected with COVID. The population has not grown at the pace at which India has grown, and India has become more populous than China now. China, in spite of their own capacities, has always been net importers. As and when the industrial activity picks up in China, there could be definitely increase in imports in China, which will impact the overall global supplies of fuel. Third important factor to keep in mind is that there are no new pet coke facilities capacities coming up globally and cement capacity in India is on the growth path. In the long run, we don't expect any significant softening in fuel prices. As I said, the worst is behind us, so I have spoken about cost. Let's look at the brighter side, demand. As expected, we are seeing Indian demand surge at a fabulous pace. First three quarters have already generated a double-digit growth for us. January-March quarter seems to be on a solid footing. Infrastructure story of the country is booming, as also urban real estate continues to do well. This is where I believe UltraTech has got its expansion strategy bang on, as always, a highly value-additive strategy. Our target is to start the next financial year with close to 130 million tonnes of capacity. Capacity utilization already improved to 83% in this quarter, in the reported quarter, and we expect it to go up further in the last quarter of the financial year. In fact, you know, if I go back in the last few years, January to March have been typically 95% or 100% capacity utilization. The way things are going, this quarter should be no less. Government's focus on developing good quality infrastructure bodes very well for the Indian economy and cement industry alike. All the highways, DFC corridors that has been developed will help move goods at a lower cost, lower wear and tear of vehicles, which will ultimately help improve efficiency and reduce costs. Airports in India have been growing the network slowly and steadily. Smaller towns are getting connected. The last I heard was the plan, the government's plan to increase the network of airports in India from 137 to more than 200 airports. Metro networks already commissioned or under implementation in 27 cities in the country and 17 more are on the drawing board. The natural extension of all this infrastructure growth is an improvement in demand for urban housing, and we are already seeing that right now. I believe we will see a strong growth in cement consumption in the country with all the infrastructure growth happening. The other point to keep in mind is that the demand for OPC cement will remain strong and perhaps grow over the years. This is where, yet again, UltraTech is very well-placed. As I mentioned in the earlier part, the first nine months have already delivered a double-digit growth, and this Q4 remains strong, and the future quarters also are expected to remain strong. To quickly tell you about our expansion plans and the way things are going, we've already commissioned 6.8 million tonnes during the first nine months and will commission close to 10 million tonnes in the next few months. Further, work has already commenced in full swing on the phase II expansion of 20.6 million tonnes. Long lead item orders have already been placed, and civil work has already started at most of the sites. We should be able to deliver this capacity expansion on time by 2025, 2026. Prices, you know, it's the commentary is half complete if the price is not spoken about. We do not see a significant move in prices. I guess the demand seems to be so good that the industry is focusing on opting leverages at the moment. In the current scenario, where several players might not have supplies to cater to the rising demand, prices seem to be safe. Unfortunately, higher prices than the current levels are required to cover the cost pressures. With the increasing capacity utilization, we expect prices should firm up. Sustainability continues to be our focus. We continue to march ahead in increasing the share of green energy in our overall fuel basket. With technology on power storage and battery storage in the offing in the next few years, we are confident of reaching the milestone of 50% of green energy in our overall basket by 2030. Thus, thereby reducing the requirements on fossil fuels. To conclude, I must share with you that cement industry in India and UltraTech seem to be going strong. Thank you so much. Over to you for questions. 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 telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use hand lifts 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 Indrajit Agarwal from CLSA. Please go ahead. Good morning. Thanks a lot for it. I have two questions. First, on the mix between trade, non-trade, has it changed significantly quarter-over-quarter? With elections coming ahead and infrastructure spend, as you correctly highlighted, picking up, do you think that non-trade would pick up more in this calendar year than what we have seen in June and May? Yeah. First, to your question on our mix. We were around 66%, 67%. Our quarter might be up or low. This particular quarter we were. 66%. 66% on trade and blended was about 68%. The interesting point to first, Indrajit, is our trade ratio was 66% and blended was higher than the trade ratio, which means that blended cement is going in other areas in markets other than trade as well. Secondly, I already mentioned, we expect OPC or, you know, non-trade segment, OPC sales to continue to remain strong as India sees a surge in infrastructure growth. Sure. Thank you. My second question is if you can throw some more light on the Super Dalla unit? Where exactly are we on that? What is the point of contention and what exactly is the road ahead? I understand you have entered into arbitration, what are the key milestones that we should look for? Okay. You know, the matter is subjudice right now, so I wouldn't want to color anybody's mind. It's under arbitration and perhaps will go through its own, find its own way, I would say, once the arbitration is over. Okay. Thank you. I have more questions. I'll join back later. Sure. Thank you. The next question is from the line of Pinakin Parekh from JP Morgan. Please go ahead. Thank you very much, sir. Sir, I have two questions. First is your commentary on pet coke. Now, even at current thermal coal prices on a per kcal basis, pet coke still remain relative attractive. You did highlight that, given structurally India's largest capacity addition and no big capacity additions globally, pet coke prices are unlikely to decline materially. Does this mean that at an industry level, the INR 1,000 energy cost per ton which the company was seeing, which is now at INR 1,800, we are unlikely to revert back, even if coal prices were to come off 10%, 20%, 30% from here, and the new normal is structurally higher on energy cost front. You are absolutely right, Pinakin. I think there's a new normal. Coal costs from a $70, $80 are now on a converted cost basis, more than double. 10%, 20%, 30% reduction will still not, you know, yield those numbers of, I remember we had seen INR 950 a ton energy costs also. There is in the near future, that does not seem to be a likely scenario. I don't know what will happen, how the world will change once and if the Ukraine war is over. As of now, we are, we are in a situation of extended fuel prices. Sure, sir. My second question is on cement prices. If you take a 12 to 18 months view, you have commented at the beginning of your this call that even though industry is seeing strong demand growth, the industry seems to be focused on meeting demand and you do not expect prices to move. From here, starting from March, April, you will be bringing on capacity. There will be other players who will be bringing on capacity. At that point of time, the incremental supply is higher. If the industry is struggling to take price hikes now when demand is in double digits, what happens to pricing in the latter part of 2024 when there'll be large new capacities on the ground? Shouldn't prices correct from here? I wouldn't expect that because I believe that the demand will continue to remain strong and in this fiscal 2024 pre-election things should remain stable. I'll request Jhanwar Ji to add further. Good morning to all of you. One, obviously the new capacity is going to be aided by us as well as some of the other players. As you know, the new capacity generally takes its own time to ramp up actually. Particularly, we all know this is going to be the election year, not only for the central government but number of state governments. I think the demand would be likely to be reasonably good, strong, robust. We don't think there would be unusual pressure on the pricing. Yes, you never know how the overall market shaped out. Can I think to include what Jhanwar Ji also mentioned, is that, there shouldn't be any undue pressure on prices. Mm-hmm. I would, you know, if I were to put on a chart, it would be stable to rising trend only. Sure. Sure, sir. Sir, just last one qualitative comment, if you can give us. The double-digit demand that the company saw in this quarter, how much would be driven by government spending on infra or the government projects? Would it be half? Would it be two-thirds? I know you cannot have an absolute number, but broadly just trying to understand the trend. Institutional sales have been good and, during the course of the call, I'm asking my colleagues to figure out a number and tell you. You have anything right now? Yeah. Government. Yeah, please. Yeah. The government spending, the particularly, you know, the major, segment is from the road and other segments. It is somewhere, maybe 18%- 20%, not more than this actually. The other is. It seems that retail demand continues to drive growth. If we have grown 13% and maintained a 66% retail therapy, then, you know, it's balanced and moving in the same direction onward. Sure. Sure. Understood. Thank you very much, sir. Thank you. The next question is from the line of Ritesh Shah from Investec. Please go ahead. Yeah, hi, sir. Thanks for the opportunity. Sir, my first question is on Dalla. Can you just explain us basically what led to the arbitration, what we are looking at right now? Secondly, what are the assets under contention? That's the first question, sir. The asset under contention is Dalla Super unit, which we had already acquired. As I mentioned earlier, right now the matter is sub judice under arbitration. Let's just get, let's complete that and then we can discuss it further. Right. sir, can you just, basically highlight what is the capacity over here? Is it 2.3 million tonnes? 2.3 million tonnes of clinker. Sir, would it also have 150 million tonnes plus of limestone, basically which is bought from JP and JP bought from UltraTech, ports? I don't think we should guess because still the limestone is under the forest litigation actually. As Atul said, it's a matter litigated actually, and would be unfair to talk much about those things because nobody knows what kind of results would be there. Sure, sir. My second question is how should we look at basically the situation in Himachal Pradesh? Have we got some increase in market share over there? Because I think other leading player, they have some trouble with the transporters. Are you making good out of the scenario? How should one understand it or should we also hope that there could be some reduction in transport costs overall for the economy? On to your question. first of all, once there is a shutdown of any plant actually belongs to any one of us actually in the industry, natural supply happens from the different place actually. if somebody assumed that by the closure of the plant temporary because of the transport union problem actually, I don't think there is a major swing in the market share or anything else. Just some here and there supply gets improved for a temporary period. This is a temporary phenomenon. Sir, are we vouching for reduction in freight costs like what we have seen in Chhattisgarh earlier? I think cement folks, basically they talk economics and actually they can actually play a hardball with the transporters. What is our thought process or are we okay to pay, say, INR 10 plus per kilometer per ton? How are we looking at it? Ritesh, we are watching the market and we'll see how to deal with the situation. Nobody is okay to pay. You know that it's a problem since last, not one decade, it is from two, three decades actually. We'll wait and see. Sure. I have two more questions. If you allow, I can go ahead, sir. I'll jump on this. Let others take the questions now because you will complete the time. Yeah. Sure, sure, sir. Thanks. Thank you. The next question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead. Yeah, good morning, everyone. I joined the call late, so I just missed the initial call because I just want to get some sense on the cost equation that we expect in, say, fourth quarter. I mean domestic coal availability improving, does it really swing the needle for us or cost in the recent term, or very little reliance on that? domestic coal, you know, from clinker perspective is used very limited. It is mostly used for power plants. we had a high cost of Q3. I expect the fuel cost to be lower in Q4 for us as well. Okay. Okay. Any quantification? I mean, just what any broad range? Don't want to give numbers for the future. Okay. Other than coal cost, fuel cost and say, operating leverage, any other cost items in addition with any raw material like- Others are benign. Others not too much, you know. Fuel is the most, the biggest driver right now. Other point which I can add is on logistics front, when this quarter the busy season surcharge was brought back. Effectively, our logistics, you know, play has been good to be able to absorb that cost and continue to deliver more or less around the INR 1,200 per ton, overall freight cost. This is spite of that, busy season surcharge getting added, which would be a significant portion. Okay. I was a bit surprised to see that fly ash costs index also rising sufficiently. I mean, any color, I mean, what's happening there and is it like any temporary phenomena which is likely to-? Fly ash, you know, it's all upon, all about availability. You know, if one power, particular power plant is shut down, then suddenly there is a surge in, you know, prices and availability is at issue. You won't see prices coming down because the number of thermal power plants in the country is not gonna go up. Fly ash consumption will keep going up. Got it. Got it. Atul, sir, just if I could get your logistics question now. With the medium term, FY 2024, do you expect energy cost normalization and operating leverage to play a bigger part or prices also should contribute equally and you should have- I think it should be a wholesome game. All the levers will have, will play. It's only about which lever which vehicle runs faster than the other. You will have operating leverage advantage for sure. Hopefully, the fuel cost should remain range bound. We don't expect them to go, spike up dramatically, you know, the way it had spiked up earlier. Prices should remain stable. As I think you must have heard in the comments earlier. Prices should remain strong. Should remain stable or in an upward move only. Got it. Got it. Just one last question. I mean. Can we, can you come back? Okay, I'm pretty sure. Another question. Okay. Okay, thanks. Thanks and all the best. Thank you. The next question is from the line of Prateek Kumar from Jefferies. Please go ahead. Yeah. Good morning, sir. My first question is on your fuel cost, on in your presentation on the energy cost trend slide. We have given this hydrogen guide, which we should have collected, 20%, in 20%, some of the clean and couple of other plants. While our energy cost index seems to be slightly higher. does that I mean, does this imply like we could be like looking at 20% kind of correction? You know, it is a catch-up game, so we had exhausted our old contracts and low price procurement. October to December was our highest cost of fuel. I expect the curve to again narrow as we progress in the future years. Future quarters. Just reaching at the green line in that chart, our index has gone up from 131 to 175 from energy for energy cost, while the other line of pet coke has come back from 204 to 203. Next quarter onwards, this 175 will also start dropping. You'll see that correction happening. Those impacts are largely benefits of it which will be coming on from next quarter. Yes. Okay. Secondly, on price, comment of sorts, remaining strong or stable. Like in 2019, we saw like prices because of the strong uncertainty in pre-election year, industry was not able to take price hike. Is this something which you are indicating that prices may remain sort of flat in first 3 seasons, and the industry might not be looking for the same like possibility we want season after season to be one. You have a point. You have a point. I think everybody wants price improvement, price increases given the cost curve. You know, at the same time nobody would want to lose on their market share. Typically in a very high growth time frame, focus will always be on meeting the demand. I don't expect prices to crash, correct. Stable to upward move is what I could expect. When and how much is very difficult to quantify. The last question, would you have like region wise usage and pricing data for the quarter? I don't have it right now. I'll give it to you later. Sure. Thank you, sir. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your questions to one per participant. If time permits, we will take the follow-up questions. The next question is from the line of Raashi Chopra from Citigroup. Please go ahead. Thank you. I have two questions. One is on this is your commentary on pricing as well as costs. From an EBITDA ton perspective, you know, where should we kind of see it settling on the up move? Number one. it should cross the four-digit mark for sure. I would expect January, March itself should cross four-digit mark. Okay. Okay, thanks. The second is any, you know, any sort of update on your expansion to 200 million tonnes financially? We have gone to the drawing board. Right now, our 22.6 is under execution, which will take us to 156. Once the concrete plan is ready, we will definitely announce it. 28, 29, it's a little slow it, but 28, 29, 30 we should hit that mark for sure. Thank you. Piles are in place, land is in place. You know, it will be again a mix of greenfield, brownfield. We'll present a complete picture. Sorry, just to add to that. Will it include any inorganic as well, or you can do greenfield, brownfield to reach 200? We can do greenfield to reach our milestone. Inorganic is always a top of opportunity because it, I cannot really forecast on that. Thank you. Thank you. The next question is from the line of Amit Murarka from Axis Capital. Please go ahead. Yeah. Hi. good morning, Mr. Agarwal. Just a couple of questions. firstly, on the working capital release, in the presentation, you have mentioned the INR 500 odd crores of release in Q3. How much more can we expect in Q4? Q4 should also give a higher release only because, you know, it's a high volume, high conversion, cash conversion quarter. This quarter we ended with a negative working capital of close to INR 125 crores, INR 124 crores. I think this will just go up. There are, you know, I'm glad you asked this question, Amit. There are some monies which are stuck, which we are trying to get released. This was the, you know, the upfront fee payment which was made and then Central Government issued the order for paying back the upfront fee, unutilized upfront fee. It is at various stages of, you know, clearance in various states. That will also help improve my working capital. Got it. In the last quarter, you had mentioned your fuel inventory had increased to 55 days. Like, is it coming back to normal levels now? March you know, if there are opportunistic transactions, we will spike up our inventory, will remain anywhere between 45-50 days. That is the norm that we want to follow. Right. The second question is on blending ratios. It's quite encouraging to see your consistent improvement in blending ratios. It's already gone to 1.42x. Is it because even the non-trade segment of the business is accepting the more of blended cement or is it more a push of blended cement in the trade channels only? No. It's a mix of everything. you know, firstly, Consuming fly ash to the maximum possible, not going a 0.01% beyond the permissible limit. Second is, obviously, the advocacy program which we continuously run trying to convince the institutional players to buy blended cement from us. It's not that they don't blend. They do the blending. I think it is our core competency and their core competency is construction and not blending. People are getting convinced, some institutional players are taking blended cement from us. Right. Is there any number in mind that you would say one year, two years down the line we should be 1.5x or anything like that? It will be a desire to definitely reach 1.5x, but 1.42x we have already reached, so maybe 1.45x will be the next step to look for. Got it. Thanks. That's all from my side. Thank you. Thank you. The next question is from the line of Pulkit Patni from Goldman Sachs Asset Management. Please go ahead. Yeah. No, it's not asset management. It's the research side. For my question is on pricing. Would it be fair to assume that it is not one or two players which are the full behavior prices are down? Is it just broadly excess supply in the market which has built and coming to being in the last couple of years? Would that be right assumption? You're putting me in a fix, Pulkit. Let's meet for a cup of coffee and discuss this. Sure. The second question is, despite our accounting costs on up, this is just because of the interest rate, readjustment. Marginal impact of interest rates, but bigger is accounting on foreign currency revaluation. We have $400 million of dollar bonds and lease charges. Yeah. The various foreign currency components have to be. Although it is fully hedged from the date the liability is crystallized, but accounting requires revaluation, so it's a revaluation. Cash flow versus accrual, there will be a big gap. Got it. Just very quickly, international operations, everything back to normalcy in terms of Sri Lanka et cetera now? The good news is Sri Lanka is back. I think I have somewhere around INR 65 crores overdue still to be received. Should get cleared by February. The volumes have started picking up. Government is continuously giving additional LCs so that we are able to increase our exports. It has fallen to nearly 1/3, but I'm sure in the next couple of months, or two or three months, it should be back to normal. Good. Thank you so much for that. Thank you. The next question is from the line of Ashish Jain from Macquarie. Please go ahead. Ashish, good morning. My first question was, you know, like, some of the comments you made earlier in the call in terms of the share of OPC rising, like, fly ash costing sticky and, you know, and even on oil cost and all. All of this is like margin deflation, deflationary in nature. Based upon that, are we kind of the view that structurally prices will go higher in India for a minimum of the next six months, 12 months and all? You know, do we need that or, you know, we have to settle with lower profit margins? No, no, it is required. Everybody is raising prices. Prices are required. Otherwise, you know, the, there'll be a huge amount of pressure on the margins and especially for players with lower margins will have problems. My expectation, my sense is prices have to go up. Otherwise, how will the industry be able to cover its cost and make money? At least it must cover the additional cost. Cost. Yeah. It's a normal margin for cement. Yes. Like normal margins, Atul sir, what do you mean? Like mention like, four-digit. Is that what you think is a normal margin? Yeah, yeah. Four- digit is a normal margin. Four digit is also a wide range. I. I know. -pinch back to INR 1,400, INR 1,500. Right now the focus would be to reach anywhere between INR 1,000- INR 1,200. In calendar 2023, you mean? Okay, Ashish. Okay. Sir, secondly, just, you know, on just considering the impact of railway season surcharge this quarter. Uh. The burden for this. It was, I'll have to get it, worked out and I think I'll ask Ankit to communicate to you because it was implemented middle of October. Yeah. I'll get that impact sent to you. No. My question actually was also then, you know, what has happened for us to maintain our, you know, overall cost based on freight? Are you giving us a compliment? Yeah, obviously, because like the freight cost hasn't gone up as much, so. Nobody asked, but we have managed our lead distances very well. The market mix, you know, plant to market combination, how we service the market is being handled very well. Lot of work has been done on improving efficiency at the ground level. You know, turnaround time of vehicles and to put on vehicles. Reduction of inventory, raw material. You name the lever, every lever is being pulled in the right direction. Just for the records, our lead distance dropped to 413 km this quarter as compared to 428 km in the previous quarter. That also helped a lot. Again, just please one more question. You know, on pricing, like whatever, you know, we had collated, it seemed like prices should be up quarter-on-quarter. Is it, you know, like a regional mix which has changed this quarter? If you can give some color on, you know... You know, you will see region-wide, we are a pan-I ndia player. You might see lesser impact on our P&L as compared to our regional players. Just wait for some more results. You will have more clarity. Our growth, was it more smooth in any particular region? Next question, please, Ashish. Sure. Sure. Yeah. We can talk separately. Yeah. Sure. Sure. All right. The next question is from the line of Navin Sahadeo from Nuvama Institutional Equities. Please go ahead. Navin Sahadeo from? Yeah. Hello. Good morning. Am I audible? Hello. Yeah, yeah. The name has changed, Navin? Yeah. Right. Edelweiss has now renamed to Nuvama Institutional Equities. Okay. All right. Right. Two questions. First is, of course, on the prices. Now, in North India, demand seem extremely good. The largest player, I mean, you know, large capacities in the region there. There couldn't be more ideal a situation to take price hikes, more so in January with the beginning of like, you know, busy season, the construction season as we call it. Yet there is some downward pressure, marginal downward pressure is completely, like, you know, different to what generally can be expected. What's the reason? Is it a, high competitive intensity which is driving or there is more supply that, we are not able to, like, you know, really get the best out of it? I think not, you know, the prices are not going down, prices are stable. The market is just absorbing, all the... The demand is getting serviced. That is the good part. The moment, you know, for the month of December, we were at a 92% capacity utilization. The moment industry starts going up and above 85% capacity utilization, there is no reason why prices will not go up. History has it, every January, March quarter, if the capacity utilization at the industry all India level goes up beyond 85%, it jolly well can happen this quarter also, prices will go up. Yeah. No, fair. I would love to see that. Just that, so far into January, I'm saying we are 23rd Jan. Yet, no news absolutely of any major price hike or even small price hike from any part of the country. just a little worried that if you are not able to take price hikes in busy season. Mm. should it not be a worry in the lean season? Let's see. I am sure, marketing people are working on it, so we'll have to wait and watch. Sure. Sir, my second question is about the cost. Now, your presentation, you've given blended fuel prices of USD like, you know, $200 being flattish quarter-on-quarter. Just a few clarifications. First of all, this $200, is it like, you know, includes both kiln and CPP and all the domestic coals and entire mix that we have put together, or it's only for the imported portion? Kiln. Kiln and imported. Huh? Kiln and imported. Fuel going into the kiln essentially. Sure. This $200, at current spot rates would be how much, sir? Should be 175, 180 now. Yeah. Wonderful. What kind of a decline we can ballpark see in Q4 then? Perfect. That's what I wanted to check. Thank you so much. Thank you. The next question is from the line of Girish Choudhary from Spark Capital. Please go ahead. Hello. Good morning. Thanks. My first question is on the capacity commissioning timeline. Guidance for the year was around 13 million tonnes. As you mentioned in the PPT, you have commissioned 6.8 million tonnes. If you can just guide us, when can we see this remaining 9 million-10 million tonnes? In the next, 45 days, most of the capacity is getting commissioned. Okay. Got it. Secondly, sir, I look at the demand slide which you have put out in the presentation, slide number five. Rural demand seems to have moderated, especially North, Central, East. So if you can just help us with the rural mix this quarter versus last quarter, and what are you seeing currently in terms of rural demand? Is it picking or is it staying flat? You know, a trend in this particular quarter has to be your views or analysis has to be restricted to this quarter. Next quarter it will change. The way I think, my analysis interpretation of crops is that the harvest has been good, cash flows will be good. April, June, you will start seeing rural demand in our charts also back to green instead of orange. Even the MSP is. MSP is also being improved, I am told. Yeah. Things are positive for rural market. The only handicap which rural markets run, I would say time and again, is monsoons. If monsoons are bad, things go haywire. Luckily, India has been having a good spell of monsoons over the last few years, things are going good on the rural front. Oh, fair. If you see then just tell us if you will... In this chart of ours, my only concern is intra-central, where no new projects were announced. Everything has got more or less completed. That is why suddenly we saw a complete slowdown. The moment, and I think that government, U.P. government is pretty aggressive in its growth ambition. The moment they are back on new projects, this red spot will also disappear. Yeah. particularly now, from March or April onwards, this Ganga Express Highway- That itself will trigger demand growth. Just started. It will give some relief to the central actually in terms of demand. All right. Lastly, if you can just help us with the rural mix report. How much? Rural mix. 62% of trade, sorry. Our trade was 66%. Okay. Thank you, sir. Thank you. The next question is from the line of Rajesh Kumar Ravi from HDFC Securities. Please go ahead. Yeah. Hi, sir. Good morning. Two questions. First, on the fuel cost, would it be possible to share the numbers on kilo ton, the average fuel cost for the quarter? INR 2.6 per kcal. Okay. This is against Q2. What was the number? Q2, INR 2.5. Okay. This is at $200 now, trending toward $175. Can we expect a similar cool off in the per kilo cal numbers? Sure. It should. Okay. Is it like when most of the players in Q4 would be looking at, good correction in the fuel prices, that may also, you know, subdue price rise, you know, pressure from the companies because margin expansion can be taken care of on account of this fuel price savings, fuel cost savings? It's a marginal saving only because, you know, I would love to have fuel cost back to $80. We are still talking about more than double. $200 to a 10% reduction in fuel cost does not really help me improve my margin expansion. Prices need to go up. On the electricity generation cost, what sort of savings, where are we on a per megawatt, you know, per unit of electricity generated, sir? In terms of cost per unit? Yeah, cost per unit. It's around INR 5. Okay. You're already. INR 5.9. It's close to INR 6 per unit. Okay. There you're not seeing major inflationary impact, despite... Yeah. Okay. Second, on the working capital side, we see that September quarter, your non-cash working capital numbers show almost INR 4,000 crore versus INR 700-800 crore in the preceding period. In this quarter, December, you have seen a cool of around INR 400 crore in that, out of this INR 2,000 crore. And you guided that in Q4 there will be some higher savings of INR 400 crore. What sort of number are we looking to go back to a non-cash working capital levels below INR 1,000 crore? Our ambition would definitely be to increase the negative working capital, which was INR 125. Yeah. INR 1,000 crore seems to be doable. Okay. Great. Thank you. All the best. Thank you. Thank you. The next question is from the line of Rakesh Vyas from HDFC Asset Management. Please go ahead. Yeah. Hi, good morning, Mr. Jhanwar and Mr. Daga. Two questions from my side. First one, if you could just also talk about price trend, between trade and non-trade, in last quarter and how is it trending now? That's the first question. As far as the prices are concerned, I would say it's by and large in a stable zone actually. Certainly we would have loved to have better prices. I don't think there is a major change in that trend actually. The trade prices are marginally up actually marginally, and then non-trade is also in the same direction, marginally up. There is any significant change in that trend. What Jhanwar Ji is saying is the pattern continues to be the same. Yes. Okay, got it. The second question, unfortunately, again, is on pricing itself. Mr. Daga, you mentioned that fourth quarter we should see improvement in the profitability upwards of four digits. Given the context that the costs essentially, especially on the energy side, will see some cool off, you will probably also have better operating spread moving into 4Q. I'm just a little concerned as to why industry is not looking at reasonable price hikes in this context itself. Because cost in particular you highlighted will not moderate significantly as we move forward as well as this quarter is generally the best in terms of utilization. 4Q is going to be only a better proposition compared to 3Q marginally. FY 2024 doesn't look very great. You want EBITDA improvement or no? We do. Just focus on that, and we'll deliver, EBITDA improvement. You sounded very conservative in terms of your commentary moving into next 12 months or so. That's the only concern I have. We can turn, you know, industry is in good hands. Great, sir. I wish you luck for it. Thank you so much. Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead. Thank you so much for the opportunity. Sir, what was the fuel mix for this quarter? In terms of the CapEx, previously we said that the INR 6,000-7,000 crore CapEx of for next till FY 2025 yearly basis. Is that remains the same? Yeah, the CapEx remains same. I think anywhere between INR 6,000 crore-INR 7,000 crore is what we will spend. Fuel mix. 89% imported coal and pet coke, the fuel mix for this quarter in kiln. Okay. In terms of the, you have already mentioned that, the remaining 9.9 million tonne out of 19.9 million, the first phase expansion, the entire will be to start by first quarter. What about the clinker? I think 6.4 MTPA clinker is also pending from that 19.9 million. Clinker, I mean clinker from, now which one remaining. Yeah, only one clinker. Yeah. Only one small bottlenecking of Maihar plant is pending. Otherwise, we have commissioned all the other clinkerization unit actually. Though the cement production is lower, which will get make up in this quarter. Okay. Out of 22.6 MTPA, likely to come by FY 2025, 2026. How much, and where we can see, 2 million, 4 million tonne, to come in FY 2024 itself? We will target early 2025, to start commissioning. any capacity to come in FY 2024 out of the 22.6 million tonne, next phase of expansion? Not at the moment. Okay. Okay. Okay. That's what I was thinking. Thank you. The next question is from the line of Ritesh Shah from Investec. Please go ahead. Sir, thanks for the opportunity. Two questions. One is, you have indicated a slide on construction chemicals. Also, you have indicated it's 50 + products and growing. Yeah. Just wanted to understand, if you can spell out any numbers, that's one. What's the overall game plan in this segment three years out? You know, this year, if I look at an annualized run rate, we should be clocking INR 800 crore-INR 1,000 crore and continuously growing. At the same time, we will look at consolidation opportunities. Because these are very small consolidation opportunities in case something lucrative comes by, we will consider that. The biggest play for us for construction chemicals is it, you know, it gives the, what should I say? It gives our offering or a complete offering as part of a building solutions play. For dealers, it gives them something additional to do instead of just selling cement. The focus is to build on to the stickiness which construction chemicals will bring to the table. Sure. Sir, my second question was on logistics. Is there anything different that we are doing now, given a lot of capacities which are coming up across the industry? Anything more on coastal state or anything more on adding number of silos? Sir, anything that you would like to highlight? Lot of these are, you know, very, very micro things. Whether a silo needs to be added, it does get added as and when required. Ocean movement is obviously restricted to our coastal markets only. We are moving from our Gujarat plant to down south, right up to Colombo. We are adding a bulk terminal at Tuticorin port that will further bolster our supplies to the rich Tamil Nadu market. There's a lot of digitalization effort which is under play, which is helping us optimize our logistics cost. Today, each dealer, each regional manager of ours or a territory manager of ours knows where the truck is, what time the truck will reach the destination, and how much time it will take to unload. You know, as I said, which ultimately helps improve efficiency. There are a lot of efforts which are being, lot of investment being done and efforts being put in to improve the efficiency of logistics, which is now visible. Sure. Just a related question. Does DFC change things for us? Is it a viable proposition or it's still some way out, before it actually becomes viable? Are we doing anything to make it actually viable for us? DFC? Yes, sir. Yeah. Nothing as yet. There are small movements which have started. I have seen governments make plans of increasing the rake sizes, capacity of the rakes going up, which will definitely help move bulk cement in a big way. My guess is we'll have to wait for a couple of years more before big sizes improve and benefit. Sure, sir. Thank you so much. Next question is from the line of Sanjay Nandi f rom Ratnavali Investment Private Limited. Please go ahead. Yeah. Thank you for this opportunity, sir. My all questions were answered. Thank you so much. Wish you all the very best, sir. Thank you. Thank you. The next question is from the line of Girija from Systematix. Please go ahead. Hello. Thanks for this opportunity. Yeah, all of my questions are answered. If you can tell me which region we have sold more volume. We have sold everywhere more, don't worry. Okay. Thank you. Thank you very much. Thank you. The next question is from the line of Rajesh Kumar Ravi from HDFC Securities. Please go ahead. Hi, sir. Just one follow-up question. This others when you report where you say construction chemicals, Waterproofing and exports, you mean this is all non-cement revenues expense? Is it including any exports from India as a cement export from India? It's very small, about 40,000 tons. Okay. Which goes to Sri Lanka, essentially, our own bulk terminal. Okay. Sorry. In the quarter onward I'll give the breakup. Right. Right. Great. So that we can track the. Is gaining shape. I Exactly. for us to highlight it. Great. Great. The same number, what do you have for this others number for, March 2022 quarter, please? March 2022 quarter. Exports and others. The presentation, last quarter presentation is there. Okay. Thank you, sir. I'll get it from there. Yeah. Thank you. Thank you. The next question is from the line of Shravan Shah from Dolat Capital. Please go ahead. Sir, just to follow up on WHRS. By end of this how much more we will be adding, for, till March? For FY 2024 how much more we will be adding WHRS? 30 megawatts this quarter. Huh? 30 MW this quarter. This quarter 30- No. In last quarter we have added 16 MW WHRS. In March quarter we'll be adding again 30 MW, which will take us to what total? 238 MW. We should end with 238 MW of WHRS by March 2023. There'll be further addition because in the next phase of expansion of 22 million tonnes. In all that clinkerization units we will have WHRS as well. Okay. Okay. Sir, any broad idea in terms of the, we have previously mentioned that, 15 million-16 million tonnes of clinker will be there for 22.6 million tonnes expansion, which region? Because, previously for 19. 9 million we have given the breakup. here, the breakup is not available. It was provided in last presentation where we gave the detailed geography, geographical analysis of where the expansion is coming. No. Sir, we mentioned about the grinding unit and not the clinker, where the clinker is coming. I'll ask Ankit to give it to you separately instead of, you know, passing out numbers here. He'll give it to you separately. Lastly, on the employee cost for last quarter, we mentioned that because of the incremental cycle our employee cost has increased in Q2. This quarter also the employee cost remain on the same as it should have declined on through basis. Will this INR 694 crore employee cost certainly is the new normal? Once the increase, compensation takes place that becomes a norm for the next future quarters also. Okay. No, I thought, there may be some one time, incremental bonus would be there. No. Nothing one-off, but it's normal increment. Okay. Okay. In terms of the other expenses, do you want to highlight anything where we can see a further reduction in the other expenses? We are constantly making efforts, and you will see it in our results. Okay. Okay. Thanks, sir, and all the best. Thank you. Thank you. Ladies and gentlemen, that was the last question. On behalf of UltraTech Cement, let us conclude this conference call. Thank you for joining us, and you may now disconnect your lines.