Q1 2027 Star Cement Ltd Earnings Call

August 10, 2026

Speaker #1: Ladies and gentlemen, you are connected to the Star Cement Limited Q1 FY27 earnings conference call. Please stay connected. The call will begin shortly. I repeat, ladies and gentlemen, you are connected to the Star Cement Limited Q1 FY27 earnings conference call.

Speaker #1: The call will begin shortly. Thank you. Ladies and gentlemen, good day, and welcome to Star Cement Limited Q1 FY27 Earnings Conference Call, hosted by ICICI Securities Limited.

Operator 1: Ladies and gentlemen, good day, and welcome to Star Cement Limited Q1 FY27 Earnings Conference Call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Naveen Sahadeo. Thank you, and over to you, sir.

Operator: Ladies and gentlemen, good day, and welcome to Star Cement Limited Q1 FY27 Earnings Conference Call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Naveen Sahadeo. Thank you, and over to you, sir.

Speaker #1: 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.

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star, then zero, on your touchscreen phone. Please note that this conference is being recorded.

Speaker #1: I now hand the conference over to Mr. Naveen Sahadeo. Thank you, and over to you, Sir.

Speaker #2: Thank you, Anushka. Good evening, everyone. On behalf of ICICI Securities, I welcome you all to the Q1 FY27 earnings call of Star Cement Limited.

Naveen Sahadeo: Thank you, Anushka. Good evening, everyone. On behalf of ICICI Securities, I welcome you all to the Q1 FY27 earnings call of Star Cement Limited. From the management, we have with us MD and CEO, Mr. Tushar Bhajanka, and the company CFO, Mr. Manoj Agarwal. Without any further ado, I hand over the floor to the management for their opening comments. Over to you, sir.

Navin Sahadeo: Thank you, Anushka. Good evening, everyone. On behalf of ICICI Securities, I welcome you all to the Q1 FY27 earnings call of Star Cement Limited. From the management, we have with us MD and CEO, Mr. Tushar Bhajanka, and the company CFO, Mr. Manoj Agarwal. Without any further ado, I hand over the floor to the management for their opening comments. Over to you, sir.

Speaker #2: From the management, we have with us the MD and CEO, Mr. Tushar Bhajanka, and the company CFO, Mr. Manoj Agarwal. So, without any further ado, I hand over the floor to the management for their opening comments.

Speaker #2: Over to you, sir.

Speaker #3: Hi, good afternoon, everyone. My name is Tushar Bhajanka, and I'm the MD of Star Cement. I welcome you all to the conference call for Q1 FY27.

Tushar Bhajanka: Hi, good afternoon, everyone. My name is Tushar Bhajanka, and I am the MD of Star Cement. I welcome you all to the conference call of FY27 Q1. I would like our CFO, Mr. Manoj Agarwal, to give his remarks regarding the numbers, then we can start with the Q&A. Thank you.

Speaker #3: I would like our CFO, Mr. Manoj Agarwal, to give his remarks regarding the numbers, and then we can start with the Q&A. Thank you.

Speaker #4: Yeah. Thank you, Tushar ji. Hi, friends. Very good afternoon. I, on behalf of Star Cement, welcome you all to our call to discuss our numbers for Q1, FY27.

Manoj Agarwal: Yeah. Thank you, Tusharji. Hi, friends. Very good afternoon. I, on behalf of Star Cement, welcome you all to our phone call for discussing our numbers of Q1 FY27. I would like to clarify that we are discussing on the historical numbers, there is no invitation to invest. Having said that now, I will just take you through the Q1 number. Starting from clinker production, during the quarter ending June 2023, we have produced 9.10 lakh ton of clinker as against 8.90 lakh ton same quarter last year. As far as cement production is concerned, we have produced 13.08 lakh this quarter as against 12.31 lakh ton same quarter last year. Now I will take you through the sales volume.

Speaker #4: I would like to clarify that we are discussing historical numbers, and there is no invitation to invest. Having said that, I will now take you through the Q1 numbers.

Speaker #4: Starting with clinker production, during the quarter ended June 26, we produced 9.10 lakh tons of clinker as against 8.90 lakh tons in the same quarter last year.

Speaker #4: As far as our cement production is concerned, we have produced 13.08 lakh tons this quarter, as against 12.31 lakh tons in the same quarter last year. Now, I will take you through the sales volume.

Speaker #4: During the quarter, we have sold 13.02 lakh tons of cement and 0.52 lakh tons of clinker, as against 12.22 lakh tons of cement and 0.74 lakh tons of clinker in the same quarter last year.

Manoj Agarwal: During the quarter, we have sold 13.02 lakh ton of cement and 0.52 lakh ton of clinker as against 12.22 lakh ton of cement and 0.74 lakh ton of clinker, same quarter last year. This is as far as cement and clinker sales is concerned. As far as geographical distribution of cement is concerned, in Northeast we have sold around 8.71 lakh ton as against 8.67 lakh ton during same quarter last year. As far as outside Northeast is concerned, we have sold 4.31 lakh ton of cement this quarter as against 3.55 lakh ton same quarter last year. In terms of blend mix, it is almost 15% of OPC and the rest is PPC. These are the quantitative number of this quarter. Now, I will take you through the financials. The total revenue figure this quarter is around INR 902 crore as against INR 847 crore same period last year.

Speaker #4: This is as far as cement and clinker sales are concerned. As far as geographical distribution of cement is concerned, in the Northeast we have sold around 8.71 lakh tons as against 8.67 lakh tons during the same quarter last year.

Speaker #4: And as far as outside Northeast is concerned, we have sold 4.31 lakh tons of cement this quarter as against 3.55 lakh tons in the same quarter last year.

Speaker #4: In terms of blend mix, it is almost 15% OPC, and the rest is PPC. These are the quantitative numbers for this quarter. Now, I will take you through the financials.

Speaker #4: The total revenue figure this quarter is around ₹902 crore, as against ₹847 crore in the same period last year. As far as the EBITDA figure is concerned, this quarter we have achieved an EBITDA of around ₹203 crore, as against ₹230 crore last year.

Manoj Agarwal: As far as EBITDA figure is concerned, this quarter we have done an EBITDA of around INR 203 crore as against INR 230 crore last year. This is mainly on account of reduced subsidy, increase in packing material cost, and also shut down expenses which we have taken in our one of our kiln. Profit after tax is INR 74 crore in this quarter as against INR 98 crore last year. On per ton EBITDA front, it is INR 1,497 during this quarter as against INR 1,774 per ton same quarter last year. This is what our quarterly numbers are. I request all of you, if you have any query you can ask the same, and I will request Naveenji to moderate the query wherever it requires. Thank you.

Speaker #4: This is only on account of reduced subsidy, increase in packing material cost, and also shutdown expenses, which we have taken in one of our teams.

Speaker #4: Profit after tax is ₹74 crore in this quarter, as against ₹98 crore last year. On the EBITDA front, it is ₹1,497 crore during this quarter, as against ₹1,774 crore in the same quarter last year.

Speaker #4: This is what our quarterly numbers are. Now, I request all of you, if you have any query, you can ask the same, and I will request Naveen ji to moderate the query wherever it requires.

Speaker #4: Thank you.

Speaker #1: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star one on their touch-tone telephone.

Operator 1: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the questions do assemble. We take the first question from the line of Shravan Shah from Dolat Capital. Please proceed.

Operator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the questions do assemble. We take the first question from the line of Shravan Shah from Dolat Capital. Please proceed.

Speaker #1: 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.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. We will take the first question from the line of Shravan Shah from Dalit Capital.

Speaker #1: Please proceed.

Speaker #3: Oh, thank you, sir. Just a couple of data points before my question: trade share, premium share, CC ratio, lead distance, and KCal for this quarter.

Shravan Shah: Thank you, sir. Just a couple of data points before question. Trade share, premium share, clinker-cement ratio, lead distance and KKL for this quarter.

Speaker #3: So, I think the premium sales are about 15.9% of the overall sales. The lead distance was about 210. The clinker factor was about 66.5%.

Tushar Bhajanka: I think the premium sales is about 15.9% of the overall sales. The lead distance was about 210. The clinker factor was about 66.5%. What was the fourth parameter that you'd asked?

Speaker #3: And what was the fourth parameter that you had asked?

Speaker #4: Trade, sir.

Shravan Shah: Trade share.

Speaker #3: Trade share was about 80%.

Tushar Bhajanka: Trade share was about 80%.

Speaker #4: Okay. And KCal for this quarter?

Shravan Shah: Okay. The CKL for this quarter?

Speaker #3: Was about 1.55.

Tushar Bhajanka: Was about 1.55.

Speaker #4: Oh, jumping to that. So now, two things. First, on the volume — this quarter was slightly on the lower side. So we were looking at 10–12% cement volume growth and a similar number for clinker for the entire full year versus 26.

Shravan Shah: 1.55. Oh, significant jumping there. Now, two things. First, on the volume. This quarter slightly on the lower side. We were looking at 10%, 11% cement volume growth and similar number of the clinker for entire full year versus our 2026. Any change in there? Can we now say that from Q2 onwards or that volume growth would be slightly better?

Speaker #4: So, any change in that? So, can we now see—from Q2 onwards—the volume growth would be slightly better?

Speaker #3: So, in Q2, you know, as we all know, the assignments are completely flooded at the moment. So, I don't see much of a spike in terms of volume.

Tushar Bhajanka: In Q2, as we all know, the Assam is completely flooded at the moment, so I don't see much of a respite in terms of volume in Q2. I think from Q3, Q4 onwards, I think we can see, hopefully, a double-digit growth. On the overall year, I think we expect to probably revise the numbers a bit from 11% to 12% to about 8% to 9%.

Speaker #3: In Q2, but I think from Q3, Q4 onwards, I think we can see, hopefully, a double-digit growth. And for the overall year, I think we expect to probably revise our numbers a bit from 11–12 percent to about 8–9 percent.

Speaker #4: Okay. But for the clinical sale or for the full year, could it be similar to what we have done in FY26?

Shravan Shah: For the clinker sale for the full year will be similar of what we have done in the FY26?

Speaker #3: I think the clinical sale in FY27 would probably be stagnant or may degrow by about 5 to 10 percent compared to FY26 because I think the clinical is also coming from outside now, in the Northeast.

Tushar Bhajanka: I think the clinker sale in FY27 would probably be stagnant or may de-grow by about 5% to 10% compared to FY26, because I think the clinker is also coming from outside now in Northeast. It may be a case that there may be a de-growth in the sale of clinker.

Speaker #3: So, it may be the case that, you know, there may be degrowth in the field of clinical.

Speaker #4: So now on the cost difference, so given the fuel cost as supply jump up to 1.55 from 1.24 in Q4, so overall, this and even the we heard that there's some packing that cost has also recently has gone up.

Shravan Shah: On the cost difference, given the fuel cost has sharply jumped up to INR 1.55 from INR 1.24 in Q4. Overall, this and even we heard that there's some packing cost has also recently has gone up. Overall, how do we see the cost moving up in Q2? At the same time, still the prices holding on versus the June average?

Speaker #4: So overall, how do we see the cost moving up in Q2? And then at the same time, are prices still holding on versus the June average?

Speaker #3: So, in the fuel cost, you know, in FY26 Q4, it was about 1.33, which has gone up to 1.55. We expect that from Q2 onwards, the cost should come down to about 1.45.

Tushar Bhajanka: In the fuel cost, in FY26, Q4 was about INR 1.33, which has gone up to INR 1.55. We expect in Q2 onwards, the cost should come down to about INR 1.45. Hopefully in Q3 and Q4, we can hopefully reduce the cost further on fuel. The PP bag prices are completely related to the international turmoil and war situation which is going on, and thereafter prices are up. That I think really is hard to predict of how will it pay out. On the prices, I think if I compare, I think the prices have broadly stable in Northeast as well as in outside Northeast markets of Bihar and West Bengal, even in Q2.

Speaker #3: And hopefully in Q3 and Q4, we can reduce the cost further. On fuel, the PP bag prices are completely related to the international turmoil and the war situation which is going on, and the raw material prices are up.

Speaker #3: So that, I think, really is hard to predict — how it will play out. And on the prices, the prices, I think if I compare, I think the prices are broadly stable.

Speaker #3: In the Northeast, as well as in markets outside the Northeast—so Bihar and West Bengal—even in Q2.

Speaker #4: Okay. So broadly, kind of a 1,500-plus, kind of an EBITDA pattern that we were previously looking at for at least two to three years, once our Rajasthan plant comes in.

Shravan Shah: Okay. Broadly, kind of an INR 1,500 plus kind of EBITDA pattern that we were previously looking at for at least two, three years once our Rajasthan plant comes in. That we are still seeing that is kind of still manageable given whatever the new capacity will come up in the Northeast. Still it will have a time, we should be having the similar kind of an INR 1,500 kind of EBITDA pattern can be doable.

Speaker #4: So, we are still seeing that this is kind of still manageable, given whatever the new capacity will come up in the Northeast.

Speaker #4: So still, it will have a time. So we should be having the similar kind of a 1500 rupees kind of a EBITDA pattern can be doable.

Speaker #3: Yeah, I mean, over the entire year, yes, it can be doable. I think 1,500–1,600 is still a good estimate, only for Q2, because the shutdown cost also gets added in the cost in Q2.

Tushar Bhajanka: Yeah. Over the entire year, yes, it can be doable. I think INR 1,500, INR 1,600 is still a good estimate. Only for Q2 because the shutdown cost also gets added in the cost in Q2. Also because in Northeast it rains more, of course the fixed costs are getting absorbed by a lower volume. It may be about INR 1,400 for Q2, but I think we'll catch up in Q3 and Q4 there.

Speaker #3: And also, because in the Northeast it rains more, the fixed costs are getting absorbed by a lower volume. So, it may be about 1,400 for Q2, but I think we'll catch up in Q3 and Q4, yeah.

Speaker #4: Okay. Okay. Thank you, sir. All the best.

Shravan Shah: Okay. Thank you, sir. All the best.

Speaker #3: Thanks. Thanks.

Tushar Bhajanka: Thank you.

Speaker #1: Thank you. We will take the next question from the line of Jyoti Gupta from Ashika Institutional Equities. Please proceed.

Operator 1: Thank you. We take the next question from the line of Jyoti Gupta from Ashika Institutional Equities. Please proceed.

Operator: Thank you. We take the next question from the line of Jyoti Gupta from Ashika Institutional Equities. Please proceed.

Jyoti Gupta: Thank you so much for taking my question. Good set of numbers. I just wanted to understand how does the pricing demand scenario looks like in Q2, and what should we expect, given the kind of situation in the EPC and especially roads and highways? Do you see demand slowing down in Q3 or Q4, or it's likely to remain stable in H2 as well?

Speaker #2: Thank you so much for taking my question. Good set of numbers. I just wanted to understand, how do the pricing and demand scenarios look in the second quarter?

Speaker #2: And what should we expect, given the kind of situation on the EPC, and especially on roads and highways? Do you see demand slowing down in the third or fourth quarter, or is it likely to remain stable in the second half as well?

Speaker #3: So I think that because of the lack of demand in the first two quarters, like quarter one, quarter two, and because of the floods which have completely overlooked Northeast at the moment, I think that when the floods subside, which is basically quarter three and four, I think there should be some pent-up demand which gets relieved in those two quarters in the second half of the year.

Tushar Bhajanka: I think that because of the lack of demand in the first two quarters, like Q1, Q2, and because of the floods which have completely engulfed Northeast at the moment, I think that when the floods subside, which is basically Q3 and Q4, I think there should be some pent-up demand which gets relieved in those two quarters in the H2 of the year. I would expect a bit higher than usual growth in those two quarters. Of course, the demand in the first two quarters have been quite mute.

Speaker #3: So, I would expect a bit higher than usual growth in those two quarters. And of course, you know, the demand in the first two quarters has been quite muted.

Speaker #2: Yes, sir. Sorry, I missed you. Hello?

Jyoti Gupta: Yes, sir. Sorry, I missed you. Hello.

Speaker #3: Yeah, yeah. I was just saying that in the second half of the year, we would probably see a pickup because of the pent-up demand.

Tushar Bhajanka: I was just saying that in the H2 of the year, we would probably see a pickup because of the pent-up demand. Right now, there is heavy rain and flooding going on in the entire Northeast. Of course, the demand for cement is quite mute. As soon as the situation gets better, I am sure there will be a pickup in the demand as well.

Speaker #3: Right now, there's heavy rain and flooding going on in the entire Northeast. So, of course, the demand for cement is quite muted. But as soon as the situation gets better, I'm sure there will be a pickup in demand as well.

Speaker #2: Okay. When should we expect the Rajasthan plant to come on stream, and by when do you think it will be coming up in stepped phases—maybe starting with a 30 percent utilization level?

Jyoti Gupta: When should we expect the Rajasthan plant to come on stream, and by when do you think it will be in step-up phases, maybe start with 30% utilization level? Should we expect in FY20?

Speaker #2: Do we expect an FY28 end?

Speaker #3: So basically, we have now gotten the plant time for the clinical and the integrated vending unit plant. So we have applied for the, you know, public hearing and for the EC.

Tushar Bhajanka: Basically, we have now gotten the plant plan for the clinker and the integrated grinding unit plant. We have applied for the public hearing for the EC. By, I think, about September end or October, we should be getting our EC for the plant. Between mid-October to November is when we plan to start our work on ground on the Rajasthan project.

Speaker #3: By, I think, around the end of September or October, we should be getting our EC for the plant. And between mid-October to November is when we plan to start our work on the ground for the Rajasthan project.

Speaker #2: So, effectively, is it 26 months for the plant to come up, or 22?

Jyoti Gupta: Effectively 26 months for the plant to come up or 22?

Speaker #3: So it would be about 18 to 20 months from, like, November onwards, I guess. So it means about quarter one of FY29 or quarter four of FY28.

Tushar Bhajanka: It could be about 18 to 20 months from November onwards, I guess. It means about Q1 FY29 or Q4 FY28.

Speaker #2: Okay, great. Thank you so much. That's good.

Jyoti Gupta: Okay. Thank you so much.

Operator 1: Thank you. We take the next question from the line of Rajesh Ravi from HDFC Securities. Please proceed.

Operator: Thank you. We take the next question from the line of Rajesh Ravi from HDFC Securities. Please proceed.

Speaker #1: Thank you. We take the next question from the line of Rajesh Ravi from HDFC Securities. Please proceed.

Speaker #4: Okay, good evening. Am I audible?

Rajesh Ravi: Hi, June. Good evening. Am I audible?

Tushar Bhajanka: Yes.

Speaker #3: Yes.

Speaker #4: Yeah. My first question pertains to demand in the Northeast, given prices. I understand we have seen a similar decline in Northeast sales, so what do we attribute that to?

Rajesh Ravi: My first question pertains to demand in the Northeast. I understand we are seeing a decline in the Northeast sales. What do we attribute that to? It's all because of elections, which impacted sales in the month of April, or also because of the rising competition from Dalmia's capacity ramp-up in the same market?

Speaker #4: Is it all because of elections, which impacted sales in the months of April, or is it also because of the rising competition from Dalmia's capacity ramp-up in the same market?

Speaker #3: No, I think it's not because of the competition. I think because, I mean, in Q1, the best month is, of course, April, because from May and June.

Tushar Bhajanka: No, I think it's not because of the competition. In Q1, the best month is, of course, April because from May and June in Northeast, monsoon starts playing a role. In April, we had the election in Assam, which is almost 60% to 70% of the Northeast market. I think that is why I think there is a bit of a dip. I don't think it's because of the competition, and I don't think we've lost any market share in Northeast, compared to last quarter or same quarter last year.

Speaker #3: In the Northeast, the monsoon starts playing a role. And in April, we had the election in Assam, which is almost 70% of the Northeast market.

Speaker #3: So, I think that is why there is a bit of a dip. I don't think it's because of the competition, and I don't think we've lost any market share in the Northeast, you know, compared to last quarter or the same quarter last year.

Speaker #4: Okay. So, to be clear, what is your estimate in terms of growth in Northeast sales on a year-on-year basis?

Rajesh Ravi: Based on a clear basis, what are your estimations in terms of growth in the Northeast sales on a year-on-year basis?

Tushar Bhajanka: The growth rate in Northeast on a year-on-year basis.

Speaker #3: What is the growth rate in the Northeast on a year-on-year basis?

Speaker #4: Sir, are you talking about the Rajesh market growth or about our growth?

Manoj Agarwal: You're talking about, Rajesh, market growth or our growth?

Speaker #3: Yeah, yeah. Staff growth and growth for industry as well as for market in FY27.

Rajesh Ravi: Yeah. Star's growth and growth for industry as well as for market FY27.

Speaker #4: Industry is 2 percent, whereas our growth in the Northeast is more or less flat, or maybe minor growth.

Manoj Agarwal: That is 2%, whereas our growth is more or less flat or maybe minus growth somewhere.

Speaker #3: So, for FY27, you're saying key industry growth is 2 percent?

Rajesh Ravi: For FY27, you're saying our industry will grow at 2%?

Speaker #4: Growth for us, I

Tushar Bhajanka: For us, I think the growth was about 0.4% in Northeast, and I think the industry may have grown by about 1% or 1.5%. It was flattish.

Speaker #3: I think the growth was about 0.4 percent in the Northeast. And I think the industry may have grown by about 1 or 1.5 percent.

Speaker #3: It was flattish.

Speaker #4: No, for the full year, what are your expectations you’re looking at?

Rajesh Ravi: No. Hopefully, what is the expectation we are looking at?

Speaker #3: I think we still are hopeful that, you know, we can catch up in the quarter four and quarter three and quarter four. So I think for the industry, I would say that the growth rate should be about 7 percent.

Tushar Bhajanka: I think we still are hopeful that we can catch up in Q3 and Q4. I think for industry, I would say that the growth rate should be about 7%. For us, I hope that we can do about 8% to 9% in Northeast.

Speaker #3: For us, I hope that we can do about 8 to 9 percent in the Northeast.

Speaker #4: Okay. And fuel cost—you mentioned 1.55—was that for Q1 or for Q2?

Rajesh Ravi: Okay. Fuel cost, you mentioned 1.55 was for Q1 or in Q2?

Speaker #3: No, 1.55 is the estimate for Q1. I think in Q2, we should bring it down to probably about 1.45. Yeah.

Tushar Bhajanka: The 1.55 is the estimate for Q1. I think in Q2, we should bring it down to probably about 1.45.

Rajesh Ravi: Understood. Okay, sir. I'll come back. Lastly, on this north project, the equipment ordering is already in place? Or after the EC is in place?

Speaker #4: Understood. Understood. Okay. Sir, I'll come back. Now, lastly, on this north project, is the treatment ordering already in place, or does it happen after the EC is just in the field?

Speaker #3: So we are, you know, we have just completed the purchase of our plant land. Our public hearing is at the end of the month in August.

Tushar Bhajanka: We have just completed the purchase of our plant land. Our public hearing is end of the month in August. Our EC should come in first week of October. We have already started calling vendors for quotations, I think we should be able to lock those by, I think end of August or start of September. Then we'll start with the engineering work.

Speaker #3: Our EC should come in the first week of October. We have already started calling vendors for quotations, and I think we should be able to lock those by, I think, end of August or start of September.

Speaker #3: So, and then we'll start with the engineering work.

Speaker #4: Understood. Okay, that's all from my end. Thank you.

Rajesh Ravi: Understood. That's all from my end. Thank you.

Speaker #3: Thank you.

Speaker #1: Thank you. A reminder to the participants.

Tushar Bhajanka: Thank you.

Operator 1: Thank you. A reminder to the participants, in order to ask a question, you may press star and one on your touchtone telephone. We take the next question from the line of Naveen Sahadeo from ICICI Securities Limited. Please proceed.

Operator: Thank you. A reminder to the participants, in order to ask a question, you may press star and one on your touchtone telephone. We take the next question from the line of Naveen Sahadeo from ICICI Securities Limited. Please proceed.

Speaker #2: In order to ask a question, you may press star and one on your touchtone telephone. We will take the next question from the line of Naveen Sahadeo from ICICI Securities Limited.

Speaker #2: Please proceed.

Speaker #3: Yeah. Good evening, sir, and thank you for the opportunity. My first question is: Assam comprises what percentage of our sales volume? Also, if you could throw some color on volumes, if at all, we would have done in Q2, or at least in the month of July.

Naveen Sahadeo: Yeah. Good evening, sir, and thank you for the opportunity. My first question was, Assam comprises what percentage of our sales volume? Also if you could throw some color on volumes, if at all we would have done in Q2 or at least in the month of July. I mean, to just ask, is there a risk of a negative YOY growth because of the flood situation?

Navin Sahadeo: Yeah. Good evening, sir, and thank you for the opportunity. My first question was, Assam comprises what percentage of our sales volume? Also if you could throw some color on volumes, if at all we would have done in Q2 or at least in the month of July. I mean, to just ask, is there a risk of a negative YOY growth because of the flood situation?

Speaker #3: I mean, just to ask, is there a risk of a negative year-over-year growth because of the flood situation?

Speaker #5: So in quarter sorry,

Tushar Bhajanka: In Q2 in July, of course, the volume de-growth was about 12%. The reason was because July was completely flooded in Assam, and Assam was completely shut down in many areas. I think we are seeing marginal growth in August. Last year in September, there was GST revision from 28% to 18%. Last year, September numbers for us were very bad. This year, September, we expect to be without much of floods and without any regulatory changes. I think whatever volume de-growth we have done in July, we hope to catch up in September month.

Speaker #3: In quarter two, in July, of course, the volume growth was about 12 percent. The reason was because July was completely flooded in Assam, and Assam was completely shut down in many areas.

Speaker #3: I think we are seeing marginal growth in August. Last year, in September, there was a GST revision from 28 percent to 18 percent. So, last year, September numbers for us were very bad.

Speaker #3: This year, in September, we expect not to have much flooding and no regulatory changes. So, I think whatever volume degrowth we have seen in July, we hope to catch up in the month of September.

Speaker #4: Understood, sir.

Naveen Sahadeo: Understood, sir. Sir, my second question was about the grinding units. Is there a plan that we see some grinding units proposed or planned in West Bengal with the change in government or some industrial policy around it?

Navin Sahadeo: Understood, sir. Sir, my second question was about the grinding units. Is there a plan that we see some grinding units proposed or planned in West Bengal with the change in government or some industrial policy around it?

Speaker #3: Sir, my second question then was about grinding units. So, is there a plan that we will see some grinding units proposed or planned in West Bengal with the change in government, or some industrial policy around it?

Speaker #3: So we are actually waiting. I think about the 15th of August is when West Bengal is supposed to come up with their industrial policy.

Tushar Bhajanka: We are actually waiting. I think about 15 August is when West Bengal is supposed to come up with their industrial policy. Looking at the industrial policy and looking at the potential benefits that one can accrue, I think we will take a call. Of course, in case the benefits are favorable, I think the CapEx in West Bengal, especially in the Siliguri plant, may make sense because we've done pre-expansion and will cost much lesser in terms of CapEx and will also give a benefit of SGST in our existing Siliguri factory.

Speaker #3: So, looking at the industrial policy and considering the potential benefits that one can accrue, I think we will take a call. Of course, you know, the capex—in case the benefits are favorable—I think the capex in West Bengal, especially in the Siliguri plant, may make sense.

Speaker #3: Because, I mean, we have downplayed expansion and it will cost much less in terms of Capex, and it will also give us the benefit of SGST in our existing schedule.

Speaker #3: So, is there a possibility, sir, that we would contemplate or compare between the Bihar grinding unit and West Bengal for us to take a call if the industrial policy is out or, as and when, whenever we get clarity?

Naveen Sahadeo: Is there a possibility, sir, that we would contemplate or compare it between Bihar grinding unit and West Bengal for us to take a call if the industrial policy is out or as and when whenever we get clarity, we will be able to decide based on that?

Navin Sahadeo: Is there a possibility, sir, that we would contemplate or compare it between Bihar grinding unit and West Bengal for us to take a call if the industrial policy is out or as and when whenever we get clarity, we will be able to decide based on that?

Speaker #3: We will be able to decide based on that? Yeah, I think what we are hearing in the short term, at least, is West Bengal and Bihar.

Tushar Bhajanka: Yeah, I think what we are in the short term at least considering is West Bengal and Bihar, as alternatives that we can probably invest in. If there is a favorable policy in West Bengal, then we may have to reconsider our CapEx in Bihar and probably may redirect it to West Bengal. That I think we can probably have a longer discussion after the policy is out in the next investor call. I think we'll have more clarity.

Speaker #3: You know, as alternatives that we can probably invest in. So, if there is a favorable policy in West Bengal, then, you know, we may have to reconsider our capex in Bihar and probably may redirect it to West Bengal.

Speaker #3: But that, I think, we can probably have a longer discussion about after the policy is out and the next investor call. I think we'll have more clarity then.

Speaker #4: Understood, sir.

Naveen Sahadeo: Understood, sir. Regarding the north region, I wanted to understand if there is clarity on the incentives that we will likely or potentially get or what is the status on that front, sir?

Navin Sahadeo: Understood, sir. Regarding the north region, I wanted to understand if there is clarity on the incentives that we will likely or potentially get or what is the status on that front, sir?

Speaker #3: And regarding the North region, I wanted to understand if there is clarity on the incentives that we will likely or potentially get, or what is the status on that front, sir?

Speaker #3: So yes, I think we have already gotten the standard approved package in Rajasthan, you know, for the Nembol Klinka plant that we plan to set up.

Tushar Bhajanka: Yes, I think we have already gotten the standard approved package in Rajasthan for the Nimbol clinker plant that we plan to set up. I think I will share a slide of those benefits in the next presentation. It involves a degree of capital subsidy along with SGST benefits. The exact quantum is not in front of me at the moment, but I will just add it to the slide so that everyone can see it.

Speaker #3: You know, I think I will share a slide of those benefits in the next presentation. It involves a degree of capital subsidy, along with SGST benefits.

Speaker #3: The exact quantum is not in front of me at the moment, but I will just add it to the slide so that everyone can see.

Speaker #4: Sure, sir. Thank you. Thank you so much, sir.

Naveen Sahadeo: Sure, sir. Thank you. Thank you so much.

Navin Sahadeo: Sure, sir. Thank you. Thank you so much.

Speaker #3: Thank you.

Speaker #1: Thank you.

Tushar Bhajanka: Thank you.

Speaker #2: We take the next question from the line of Shravan Shah from Dalit Capital. Please proceed.

Operator 1: Thank you. We take the next question from the line of Shravan Shah from Dolat Capital. Please proceed.

Operator: Thank you. We take the next question from the line of Shravan Shah from Dolat Capital. Please proceed.

Speaker #4: Oh, sir, just to continue that—so, if the West Bengal policy phase is favorable and if we find it fit, then will we, entirely through Millington grinding that we were looking at in Begusarai, Bihar—this entire Millington—will we be shifting to West Bengal?

Shravan Shah: Sir, just now continuing that, if the West Bengal policy is favorable and if we find fit, we will then entirely 2 million ton grinding that we were looking at Begusarai, Bihar, this entire 2 million ton we will be shifting to West Bengal or it could be a 1 million ton in West Bengal and 1 million ton in Bihar?

Speaker #4: Or it could be one Millington in West Bengal and one Millington in Bihar?

Speaker #3: I mean, you know, we will get back to the details. I do not know if, you know, what the policy will be. I hope it is favorable.

Tushar Bhajanka: We will get back to the details. I do not know what the policy will be. I hope it is favorable and I think it may make sense for us to put a plant in West Bengal. I don't think it makes sense to put 1 million in West Bengal and 1 million in Bihar because the overall CapEx of a grinding unit along with the railway siding in a greenfield project sometimes may need economies, which may not come with the 1 million ton grinding unit. I think we will have to redo the working depending on the demand scenario. Right now, the demand in West Bengal has been quite good.

Speaker #3: And I think it will, you know—it may make sense for us to, you know, put a plant in West Bengal. I don't think it makes sense to put one million in West Bengal and one million in Bihar, because the overall Capex of a grinding unit, along with the railway siding in a greenfield project, sometimes may need economies that may not come with the one million-ton grinding unit.

Speaker #3: So, I think we'll have to redo the workings depending on the demand scenario. Right now, the demand in West Bengal has been quite good.

Speaker #3: So, I think, if the demand continues like that, then we will have to, in the next two to three years, plan to commission, you know, either one of them. For that, we'll get back to you in the next call, after we have analyzed the industrial policy of West Bengal as well.

Tushar Bhajanka: I think if demand continues like that, then we will have to, in the next 2, 3 years plan to commission either one of them, for which we'll get back to you in the next call after we have analyzed the industrial policy of West Bengal as well. In the existing grinding unit in Siliguri, we already have a plant land enough for another grinding unit. We also have railway siding in Siliguri, and we are planning to put a wagon tippler for the movement of clinker as well as for the movement of fly ash. I think the economics of Siliguri grinding unit will be changing and the CapEx decision we'll let you know in the next call.

Speaker #3: In the existing grinding unit in Siliguri, we already have a plant land enough for another grinding unit. We also have railway we also have railway siding in, you know, in Siliguri.

Speaker #3: And we are planning to put a wagon tipper for the movement of clinkers, as well as for the movement of fly ash. So, I think the economics of the Siliguri grinding unit will be changing, and the Capex decision—we'll let you know in the next call.

Shravan Shah: Okay. Got it. Understood. In terms of now, I understand this is pending, but broadly in Q1, how much CapEx we have done and for full year, for 2027, 2028, how much CapEx are we looking at? And out of that, particularly the Nimbol, how much we want to spend this year and next year?

Speaker #4: Okay, okay. Got it. Understood. And in terms of now, I understand this is pending, but broadly in Q1, how much Capex have we done? And for Puliar, for '27, '28, how much Capex are we looking at, and out of that?

Speaker #4: Particularly for the Nembol, how much do we want to spend this year and next year?

Speaker #3: Sir, this quarter we have spent around ₹93 crore. And our planning, what we have given — ₹500 crore for this year — that will continue.

Tushar Bhajanka: Now, this quarter we have spent around INR 93 crore odd. Our planning was we have given INR 500 crore for this quarter, this year. That will continue. That will still holding on the same.

Manoj Agarwal: Now, this quarter we have spent around INR 93 crore odd. Our planning was we have given INR 500 crore for this quarter, this year. That will continue. That will still holding on the same.

Speaker #3: That will still be holding on the same.

Speaker #4: Okay. And next year for '28?

Shravan Shah: Okay. Next year, FY28?

Speaker #3: We already have that same thing. There is no change as such right now.

Tushar Bhajanka: That we have already that same thing. There is no change as such right now.

Manoj Agarwal: That we have already that same thing. There is no change as such right now.

Speaker #4: So, Rs 1,500-odd crore is the kind of number we should be looking at in FY28.

Shravan Shah: INR 1,500 odd crore kind of a number we should be looking at in FY28.

Speaker #3: Yeah.

Tushar Bhajanka: Yes.

Manoj Agarwal: Yes.

Speaker #4: Okay. And then this will be largely for the Nembong. So, their overall Capex, what we previously talked about — ₹2,400 crore, ₹2,500 crore — so that remains the same.

Shravan Shah: Okay. This will be largely for the Nimbol. There overall CapEx, what we previously talked about INR 2,400 crore, INR 2,500 crore, that remains the same.

Speaker #3: Yeah, so I think in that, the Capex that we have planned for Rajasthan is about 3 million tons of grinding and about 3.3 million tons of clinker.

Tushar Bhajanka: Yeah. I think in that, the CapEx that we have planned for Rajasthan is about 3 million tons of grinding and 3.3 million tons of clinker, but that we are still finalizing the exact specs for the machine and 2 million tons in Jhajjar. Overall CapEx of this thing is about INR 2,600 to 2,700 crores. Is that what we are expecting? I think we are focusing in the next 2 years to primarily get this CapEx going in North. That will be the primary focus of all the CapEx that we do.

Speaker #3: But we are still finalizing the exact specs of the machine. And 2 million tons in hedges. The overall Capex for this is about ₹2,600 to ₹2,700 crore.

Speaker #3: Is that what we are expecting? And I think we are focusing, in the next two years, primarily on getting this capex going in the North.

Speaker #3: So, that will be the primary focus of the Capex—all the Capex that we do.

Speaker #4: Yeah, because in the latest presentation that we have, we were saying that ₹2,250 crore is for integrated Nembol and ₹650-odd crore is for Haryana.

Shravan Shah: Yeah. Because the latest presentation what we have, we were saying that INR 2,250 crore for integrated Nimbol and INR 650 odd crore for Haryana. That is close to INR 2,900 odd crore that we will be.

Speaker #4: So, that is close to 2,900-odd crore that we were looking at.

Speaker #3: So that is, so I'm also talking about the combined amount. I think it may be about 2,700. We are still doing the math. It may be ₹100–200 crore up or down.

Tushar Bhajanka: Yeah. I'm also talking about the combined amount. I think it may be about INR 2,700. We are still doing the math. It may be INR 100, 200 crores up or down. That I think once we start finalizing the machinery, we will be able to give clarity in our presentation as well. I think we'll be able to take a definite budget for the expansion. I think it will be about INR 2,700 odd. With the GST, it may be about INR 2,900. I think the difference in numbers because of the GST which I may not be including in my number, but the presentation includes.

Speaker #3: I think once we start finalizing the machinery, we will be able to give more clarity, including in our presentation as well. I think we will then be able to take a definite budget for the expansion.

Speaker #3: I think it will be about 2,700-odd. But with the GST, it may be about 2,900. So, I think the difference in numbers is because of the GST, which I may not be including in my number, but the presentation includes.

Speaker #4: Okay, okay. Got it. So, for the QIP previously, which we are looking at—1,500-odd crore—so there, anything that we are now looking at?

Shravan Shah: Okay. Got it. For the QIP previously which we are looking at INR 1,500 odd crore. Is there anything that we are now looking at? Once we have 1.5 times Net Debt to EBITDA, then we will go for it or how? Anything change in there?

Speaker #4: So once we have 1.5 times net debt to EBITDA, then we will go for it? Or does anything change in there?

Speaker #3: So I mean, right now, because you know, we have we're only focusing on Rajasthan for the next Rajasthan and north for the next Capex.

Tushar Bhajanka: I mean right now because we're only focusing on Rajasthan and north for the next CapEx for the next two years. I think if our approvals are healthy then we should be able to manage it with about 1.5, 1.6x Net Debt to EBITDA. We are not at the moment actively thinking of QIP. We will do it at the opportune time in case there's opportunities available for which we need to further raise money. That may be organic or inorganic.

Speaker #3: For the next two years, and I think if our approvals are healthy, then we should be able to manage it with about 1.5 to 1.6 times net EBITDA.

Speaker #3: So, we are not at the moment actively thinking of QIP. We will do it at the opportune time, in case there are opportunities available for which we need to further raise money.

Speaker #3: That may be organic or inorganic.

Speaker #4: Okay. Okay, okay. Got it. And this year for Puliar, in terms of incentive, would it be ₹130 to ₹140 crore?

Shravan Shah: Okay. Got it. This year for full year in terms of incentive would be INR 130 to 140 odd crore?

Speaker #3: So, I think it should happen. But there is a restriction that the Assam government has come up with, where they are, you know, dividing the overall subsidy benefits across the number of years that the subsidy is valid for.

Tushar Bhajanka: I think it should happen, there is a restriction that the Assam government has come up where they are dividing the overall subsidy benefit across the number of years that the subsidy is valid for. What I expect for this year is not about INR 145, but about INR 115 crore.

Speaker #3: So what I expect for this year is not about ₹145 crore, but about ₹115 crore.

Shravan Shah: Okay. Got it. In this quarter, what was the green share and by this year and where we can be reaching?

Speaker #4: Okay, okay. Okay, got it. And in this quarter, what was the green share, and why this year? And where can we be reaching?

Speaker #3: Green share for this quarter, it was about 3%. This, of course, includes the WHRS as well.

Tushar Bhajanka: Green shares for this quarter was about 3%. This of course includes the WHRS as well.

Speaker #4: Yeah, yeah.

Shravan Shah: Yeah.

Speaker #3: And this we are planning to, you know, we are planning to institute solar as well. You know, some group captive opportunities. That we are evaluating.

Tushar Bhajanka: We are planning to institute solar as well or some group captive opportunities that we're evaluating. I think in Q3 or Q4 we will also share the details of those contracts.

Speaker #3: I think in Q3 or Q4, we will also share the details of those contracts.

Speaker #4: Okay. And lastly, the fuel mix for Q1 would be, in terms of the FSA, AFR, and biomass, would be how much?

Shravan Shah: Okay. Lastly, the fuel mix for Q1 will be in terms of the FSA, AFR, and biomass will be how much?

Speaker #3: So fuel mix for FSA, would be about 42 would be about 40, 45%. And for from FSA, and the other source was spot contract.

Tushar Bhajanka: Fuel mix for FSA would be about 45%.

Tushar Bhajanka: Fuel mix for FSA would be about 45%. From FSA. The other fuels were spot contracts. What has happened in Q1 is that all the coal has been directed to the power plant by Because I think there was a surge of power requirement. All the Coal India coal was diverted. We did not have that many rakes come in of FSA, and we had to focus on buying spot contracts of coal, which are of course at a higher price, and that is why the fuel cost has gone up.

Tushar Bhajanka: From FSA. The other fuels were spot contracts. What has happened in Q1 is that all the coal has been directed to the power plant by Because I think there was a surge of power requirement. All the Coal India coal was diverted. We did not have that many rakes come in of FSA, and we had to focus on buying spot contracts of coal, which are of course at a higher price, and that is why the fuel cost has gone up.

Speaker #3: What has happened in Q1 is that all the coal has been directed to the power plant because, you know, I think there was a surge in power requirement.

Speaker #3: So all the Coal India coal was diverted. So, we did not have that many rakes come in under FSA, and we had to focus on buying spot contracts of coal, which are, of course, at a higher price.

Speaker #3: And that is why the fuel cost has gone up. For now, I think that we will be able to get two rigs from FSA more frequently.

Shravan Shah: Okay.

Tushar Bhajanka: For now, I think that we will be able to get few rakes from FSA more frequently, and that is why we expect the fuel cost to go down to INR 1.45.

Speaker #3: And that is why we expect the fuel cost to go down to 1.45.

Speaker #4: Okay, I got it. But still, you said the FSA was 45% in terms of the fuel mix in Q1. What was the balance?

Shravan Shah: Okay. I got it. Still, you said the FSA was 45% in terms of the fuel mix in Q1. What was the balance?

Speaker #3: So, about 30% was spot contracts of coal, which is basically us buying off the market, right? And then there was a component of biomass, and some from—yeah, and then there's a component of biomass.

Tushar Bhajanka: The balance, about 30% was spot contract of coal, which is basically we buying off the market. There was a component of biomass. I think this was the broad fuel mix.

Speaker #3: So I think this will be a broad fuel mix.

Speaker #4: Okay, okay. Got it, sir. Thank you.

Shravan Shah: Okay. Got it, sir. Thank you.

Speaker #3: Thank you.

Speaker #1: Thank you. We will take the next question from the line of Pratik Kumar from Jefferies. Please proceed.

Tushar Bhajanka: Thank you.

Operator 1: Thank you. We take the next question from the line of Prateek Kumar from Jefferies. Please proceed.

Operator: Thank you. We take the next question from the line of Prateek Kumar from Jefferies. Please proceed.

Speaker #2: Yes, within that, I have more of an industry question. Can you discuss the cement demand effort effect in 2026, or maybe estimate the effect in 2027 on clinker capacity and grinding capacity for 2027?

Prateek Kumar: Yeah. Good evening, sir. I have more of like an industry question. Can you discuss the cement demand for FY26 or maybe estimated FY27 clinker capacity and grinding capacity for 2027, and how do you look at it somewhere in three years?

Speaker #2: And how do you look at it, say, over the next three years?

Speaker #3: So, in FY27, I do not see any clinker capacity coming in. The demand seems to be a bit muted in the first two quarters, primarily because there was an election.

Tushar Bhajanka: In FY27, I do not see any clinker capacity come in. The demand seems to be a bit muted in the first two quarters, primarily because there was election. Now there is like tremendous amount of flood. In the latter quarters, I expect the demand to improve. In terms of capacity additions, I think in the next three years, I would expect a capacity addition of about 1 million each of two players, and besides that, I am not aware on ground of any other capacity additions.

Speaker #3: Now, there have been a number of floods. But in the last two quarters, the latter quarters, I expect the demand to improve. In terms of capacity addition, I think in the next three years, I would expect capacity addition of about 1 million each from two players.

Speaker #3: And besides that, I am not aware, on the ground, of any other capacity addition.

Prateek Kumar: Okay. These are clinker capacities you're mentioning, 1 million each of clinker and similar grinding, right?

Speaker #2: Okay. Well, you were mentioning clinker capacity—1 million each of clinker and similar for grinding, right?

Speaker #3: Yeah, like proportionately, I think.

Tushar Bhajanka: Yeah. Proportionately, I think that.

Speaker #2: Okay. And what will be the, like, maybe FY26 ending clinker and grinding capacity of the region?

Prateek Kumar: Okay. What will be maybe FY26 ending clinker and grinding capacity of the region?

Tushar Bhajanka: That number I'll have to get back to you on. I don't have it offhand like that, but I think it should be about fifteen and a half to 16 million. That should be my estimate of the clinker capacity in Northeast currently.

Speaker #3: That number I'll have to get back to you on. I don't have it off hand like that. But I think it should be about the 15 and a half to 16 million.

Speaker #3: That should be my estimate of the clinker capacity in the Northeast currently.

Speaker #2: Do you have an estimate for grinding capacity as well?

Prateek Kumar: Do you have, Okay, grinding capacity as well.

Tushar Bhajanka: Grinding capacity would be about 23 million. 23 to 24 million.

Speaker #3: Grinding capacity would be about 23 million, 23 to 24 million.

Speaker #2: And besides yourself and Dalmia Bharat, have other smaller players been able to expand, or has most of the expansion come from the top two players in the region over the past three years?

Prateek Kumar: Besides yourself and Dalmia Bharat, other smaller players, have they been able to expand or most of expansion is from the top two players in the region past three years?

Speaker #3: So, I mean, besides us and Dalmia, we are the two people who have majorly expanded. I think other companies are doing downstream expansion, and they're trying to be bottlenecks.

Tushar Bhajanka: Besides us and Dalmia, we are the two people who majorly expanded. I think other companies are doing brownfield expansion, and they're trying to de-bottleneck of about 0.5, 0.6 million. I don't think there's anything significantly that they're expanding at the moment.

Speaker #3: Of about 0.5, 0.6 million. So I don't think there's anything significant that they're expanding at the moment.

Speaker #2: Sure, sir. Just one more question. Thank you.

Prateek Kumar: Sure, sir. This was my question. Thank you.

Speaker #3: Thank you.

Speaker #1: Thank you. We will take the next question from the line of Harsh Mittal from MK Global Financial Services. Please proceed.

Tushar Bhajanka: Thank you.

Operator 1: Thank you. We take the next question from the line of Harsh Mittal from Emkay Global Financial Services. Please proceed.

Operator: Thank you. We take the next question from the line of Harsh Mittal from Emkay Global Financial Services. Please proceed.

Speaker #2: Yeah, thank you for the question. Good evening. Good evening, team. I have only one question. How have the prices behaved in the past one and a half months, basically post-Q1 exit, given the flood situation in Assam?

Harsh Mittal: Thank you for the opportunity. Good evening, team. I have only one question. How have the prices behaved in the past one and a half months, basically, the post-Q1 exit, given the flood situation in Assam? If you can give color on that.

Speaker #2: Okay, if you can give color on that.

Speaker #3: Yeah, so I think the prices have broadly been quite flat. You know, so from Q1 to now, I think there's almost like a 2 to 3 rupees increase.

Tushar Bhajanka: I think the prices have broadly been flat. From Q1 to now, I think there's almost like a INR 3 increase in the price, it has broadly been flat. I think because the demand has gone, I don't think there's any reduction in the price, there's a cost pressure, we had to maintain the price, and that's why the price is a bit flat. I think ideally, because of the cost pressures, I think once the demand opens up, I think there will be a requirement to increase the prices a bit to absorb the cost.

Speaker #3: And the price, as such, has broadly been flat, you know, because—I mean, yeah, so I think because the demand has gone, I don't think there's any reduction in the price.

Speaker #3: But there's cross-pressure. So we had to maintain the price, and that's why the price is a bit flat, you know. But I think ideally, because of the demand and because of the cost pressure, once the demand opens up, I think there will be a requirement to increase the prices a bit to absorb the cost.

Speaker #2: And this flat pricing is the case in both of your markets—in the Northeast as well as outside the Northeast. Is this assumption correct?

Harsh Mittal: This flat prices is same in both of your markets, this Northeast as well as in outside Northeast. Is this assumption correct?

Speaker #3: Yeah, I think in Bihar the prices are a bit higher—by about ₹10. But in West Bengal and the Northeast, the prices are up by only about ₹3.

Tushar Bhajanka: I think in Bihar the prices are a bit higher, up by about INR 10. In West Bengal and Northeast, the prices are up by about only INR 3.

Speaker #2: Okay, thanks, sir. Is there any number you can give about what could be the cost per ton reduction in quarter two, or are you saying it may be flat?

Harsh Mittal: Okay. Sir, any number you can give about what could be the cost per ton reduction in Q2? Or you are saying it may be flat. If any indication you can give on the operation cost per ton.

Speaker #2: If there's any indication you can give on the operating cost per ton.

Speaker #3: So, operational cost, you know, besides the fuel cost, it may go down to about 1.45. I don't see a lot of costs going down because, you know, the bag prices are also high at the moment.

Tushar Bhajanka: Operational cost, besides the fuel cost, may go down to about INR 1.45. I don't see a lot of costs going down because the bag prices are also high at the moment. I don't see that also going down. It depends on the war and the crude oil prices and raffia prices. That is beyond our control. I think from a longer horizon, we are introducing a few things which should help us in reducing our cost. I think by October, November, we will get a railway siding in Silchar. We start operationalizing our Silchar capacity fully. I think there will be a lot of operational logistics savings that we may be able to accrue because of that, because that will help us in serving the South Assam market more effectively, along with other states in Northeast.

Speaker #3: So I don't see that, you know, also going down. I mean, it depends on the war and the crude oil prices and transfer prices, and so that is beyond our control.

Speaker #3: I think we are introducing—I mean, from a longer horizon—we are introducing a few things which should help us in reducing our costs.

Speaker #3: I think, you know, by October–November we will get a daily siding in steel chair, you know, and these are operationalizing our steel chair capacities fully.

Speaker #3: I think there will be a lot of operational logistics savings that we may be able to prove because of that. You know, because that will help us in serving the, you know, in serving the South Assam market more effectively, along with other states in the Northeast.

Speaker #3: We are also planning, in the next five to six months, you know, to introduce EVs on some typical routes. I think that would also lead to significant savings.

Tushar Bhajanka: We are also planning in the next five, six months to introduce EVs in some typical routes. I think that would also lead to significant savings. We are planning to introduce a wagon tippler in Siliguri, which will reduce its clinker transportation costs and fly ash cost to Siliguri significantly. We expect about INR 150 savings from the sales that we make from Siliguri after we introduce wagon tippler there. I think these are just a few cost initiatives that we're taking, which will materialize in the next three to six months, basically.

Speaker #3: We are planning to introduce a wagon tippler in Siliguri, which will significantly reduce clinker transportation costs and fly ash costs to Siliguri. We expect about ₹150 savings from the sales that we make in Siliguri after we introduce the wagon tippler there.

Speaker #3: So I think there are just a few cost initiatives that we're taking, which will materialize in the next three to six months, basically.

Speaker #2: And Harsh, in addition to that, because there are some one-offs in Richmond or donation, and some incentives that will also reduce in the next quarter.

Manoj Agarwal: Harsh, in addition to that, because there are some one-off in the receipt of donation and some incentive that will also reduce in the next quarter. That INR 60 to 70 saving will be there as compared to this quarter.

Speaker #2: So, that will be a ₹60 to ₹70 saving, as compared to this quarter. Got it. Last question from my side.

Harsh Mittal: Got it. Sir, last question from my side. Are we staying at our guidance of INR 150 crore of non-cement revenues this year, or there is some downside risk on that?

Speaker #2: Are we staying at our guidance of ₹150 crore of non-cement revenues this year, or is there some downside risk to that?

Speaker #3: I'm sorry, can you repeat that?

Tushar Bhajanka: I'm sorry, can you repeat that again?

Speaker #2: Sure. My question is, regarding the ₹150 crore revenue guidance for the non-cement part of the business. Are we staying intact with this guidance, or is there some downside risk to this number?

Harsh Mittal: Sir, my question is, in the last call, we gave a revenue guidance of INR 150 crore for the non-cement part business. Are we staying intact? Is this guidance intact, or is there some downside risk to this number?

Speaker #3: No, so that $150 million was not— that $150 million was not actually the EBITDA increase. That was a revenue increase that we had suggested, that we will do about $150 million by our Building Solutions division, right, by A, C, and R and C, and that is actually a revenue estimate.

Tushar Bhajanka: No, that INR 150 was not actually the EBITDA increase. That was the revenue increase that we had suggested, that we will do about INR 150 by our Building Solutions Division, that is by AAC and RMC. That is actually a revenue estimate. That's not an EBITDA estimate.

Speaker #3: That's not an EBITDA estimate.

Speaker #2: Yes, I said that. It's a revenue estimate only. I was talking about revenue.

Harsh Mittal: I said revenue estimate only. I said about revenue estimate.

Speaker #3: Yeah, yeah, yeah. So, that revenue estimate, I think, again, because the demand has been a bit sluggish, we are not right now at the ARR where we'll touch 150.

Tushar Bhajanka: Yeah. That revenue estimate, I think, again, because the demands have been a bit sluggish, we are not right now at the ARR where we touch INR 150, but we are increasing our RMC plants. We are focusing on AAC, and I think we should be able to reach that ballpark figure. At least on a ARR basis, we should be able to reach that INR 150 number by this Q4.

Speaker #3: But we are increasing our R and C plans. We are focusing on AC, and I think we should be able to reach that ballpark figure, at least on an ARR basis.

Speaker #3: We should be able to reach that 150 number by Q4.

Speaker #2: Got it, got it. Thank you. These were my questions. Thank you.

Harsh Mittal: Got it. Thank you. These were my questions. Thank you.

Speaker #3: Thanks.

Speaker #1: Thank you. We will take the next question from the line of...

Tushar Bhajanka: Thank you.

Operator 2: Thank you. We'll take the next question from the line of Naveen Sahadeo from ICICI Securities.

Operator: Thank you. We'll take the next question from the line of Naveen Sahadeo from ICICI Securities.

Speaker #2: Yeah. Hello? Hello. Am I audible?

Naveen Sahadeo: Yeah. Hello, am I audible?

Navin Sahadeo: Yeah. Hello, am I audible?

Tushar Bhajanka: Hi. Yes.

Speaker #3: Thanks. Yeah.

Speaker #2: Right. Sir, a couple of questions. My first question was that if North as a project is certain, is there a from a strategy point of view, are we contemplating entering the region with some R and C units?

Naveen Sahadeo: Right. Sir, a couple of questions. My first question was that if north as a project is certain, from a strategy point of view, are we contemplating entering the region with some RMC units? Because you already have some experience for RMC in your home turf, and given the way north is typically a OPC market, incrementally, I think other companies are also talking about RMC increase. As a strategy, would you be contemplating putting more RMC units in the region to begin with so as to make brand visible or indirectly seed the market, and then probably once your product is launched or once your factory is launched, that could help us gain a better traction. Is that something on the card?

Navin Sahadeo: Right. Sir, a couple of questions. My first question was that if north as a project is certain, from a strategy point of view, are we contemplating entering the region with some RMC units? Because you already have some experience for RMC in your home turf, and given the way north is typically a OPC market, incrementally, I think other companies are also talking about RMC increase. As a strategy, would you be contemplating putting more RMC units in the region to begin with so as to make brand visible or indirectly seed the market, and then probably once your product is launched or once your factory is launched, that could help us gain a better traction. Is that something on the card?

Speaker #2: Because you already have some experience with R and C in your home turf, and given the way North is typically an OPC market, incrementally I think other companies are also talking about R and C increases.

Speaker #2: So, as a strategy, would you be contemplating putting more R and C units in the region to begin with, so as to make, like, you know, the brand visible or create or indirectly seed the market?

Speaker #2: And then probably once your product is launched, or once your factory is launched, that could help us gain better traction. Is that something on the cards?

Speaker #3: So, I personally — you know, I — you know, that's a good suggestion. We had not, you know, got down to thinking about that yet. But I think it's a good suggestion.

Tushar Bhajanka: I personally agree. That's a good suggestion. We had not got down to thinking about that yet, but I think it's a good suggestion. I think I would ask my team to kind of evaluate it, probably we can have a discussion about it in the next earnings call. Right now, I think we read the market. I agree with you that a lot of cities have the RMC culture, I think we'll have to eventually get to it. We haven't really modeled it out, we haven't really explored it in detail. We'll do that, we'll get back.

Speaker #3: I think, you know, I would ask my team to kind of evaluate it, and then probably we can have a discussion about it in the next earnings call.

Speaker #3: Right now, I think we will just, you know, we, we've read the market. I agree with you. There are a lot of cities that have, you know, the R and C culture.

Speaker #3: And I think we’ll have to eventually get to it. So we haven’t really modeled it out, and we haven’t really explored it in detail.

Speaker #3: So we'll do that, and we'll get back.

Speaker #2: Sure, we'll look forward. My second question, then, was about the incentives. You mentioned the Assam government did some things where, instead of the earlier payout, they would now do a much more equated kind of a payout.

Naveen Sahadeo: Sure. Will look forward. My second question was about the incentives. You mentioned Assam government did some things wherein from the earlier payout, they would now do a much more equated kind of a payout. Two things here, wanted to understand what is the amount outstanding, are there any receivables there from the Assam government which will take longer than expected?

Navin Sahadeo: Sure. Will look forward. My second question was about the incentives. You mentioned Assam government did some things wherein from the earlier payout, they would now do a much more equated kind of a payout. Two things here, wanted to understand what is the amount outstanding, are there any receivables there from the Assam government which will take longer than expected?

Speaker #2: So, two things here I wanted to understand. What is the amount outstanding? And are there any receivables there from the Assam government which will take longer than expected?

Speaker #3: So, Manoji, do you have the numbers?

Tushar Bhajanka: Manojji, do you have the numbers?

Speaker #2: Currently, we have around—because we have received this quarter also—this quarter, we have received ₹50-odd crores. ₹140 crores we have received. Till June, we have a total of ₹165 crores.

Manoj Agarwal: Currently we have around INR 40 crore. We have received this quarter also INR 140 crore. Till June, we have an accrual of INR 165 crore, we have received INR 140 out of it, INR 25 we are left with. Up to 25 June, everything will be clear. After that, just let me give the number. INR 85 is the accrual till March 2026. That is, suppose it will be INR 85 plus INR 25. This is INR 110 crore is outstanding till March 2026. Further, this quarter we have accrued around INR 16 crore. INR 130 crore is the outstanding from Assam.

Speaker #2: And we have received 140 out of each, and 25 we haven't received. So, up to June 25, everything will be clear. Then after that, just let me give the number.

Speaker #2: Five minutes. Then 85 is the approval till March 26. That is, suppose it will be 85 plus 25. This is ₹110 crore outstanding till March 26.

Speaker #2: And further, this quarter we have approved around ₹40 crore. ₹17–16 crore. That is outstanding. ₹130 crore is the outstanding from Assam. ₹130 crore is outstanding.

Naveen Sahadeo: I'm sorry, INR 130 is outstanding. How many years now? What is the total book size or incentive amount that we can get irrespective of the period? I believe they have changed the period now. What is the total duration in terms of years and maybe the annual amount?

Navin Sahadeo: I'm sorry, INR 130 is outstanding. How many years now? What is the total book size or incentive amount that we can get irrespective of the period? I believe they have changed the period now. What is the total duration in terms of years and maybe the annual amount?

Speaker #2: And sorry, how many years now? What is the total book size or incentive amount that we can get, irrespective of the period?

Speaker #2: I believe they have changed the period now. So, what is the total duration in terms of years, and maybe the annual amount?

Speaker #3: Total was ₹794 crores. Okay. That has to be, we will get.

Manoj Agarwal: Total was INR 794 crore, okay. We will get.

Speaker #2: Okay.

Naveen Sahadeo: Okay.

Navin Sahadeo: Okay.

Speaker #3: Yeah. So, I think ₹794 crore that we were supposed to get—you know, earlier, there was no restriction on how fast you could get it. It depended on, you know, the amount of SGST that you gave to the government.

Tushar Bhajanka: Yeah. I think it was INR 794 crore that we were supposed to get. Earlier there was no restriction of how fast you will get it, depended on the amount of SGST that you gave to the government.

Naveen Sahadeo: Correct.

Navin Sahadeo: Correct.

Speaker #3: Right. And I think that you have to get the net SGST—you have to get it deducted from that amount, from the overall subsidy. Right?

Tushar Bhajanka: Right. I think the net SGST used to get deducted from that amount of the overall subsidy, right. Now what they've done is that they've divided the amount of subsidy by 12 years, right. Out of that, 2, 3 years have already gone. Whatever remaining subsidy was there, they divided it by the remaining number of years, right, as per this new circular. The impact of that is about INR 2,030 crore, which is why I said that the estimate of overall subsidy will reduce from INR 145 to 115.

Speaker #3: But now, what they've done is they've divided the amount of the subsidy by 12 years, right? So, out of that, two or three years have already gone.

Speaker #3: So whatever remaining subsidy was there, they divided it by the remaining number of years. Right. As per as per their new circular. So the impact of that is about, you know, 20, 30 crores.

Speaker #3: Which is why I said that the estimate of overall subsidy will reduce from 145 to 115.

Speaker #2: Understood, sir. And sir, my last question. Because there was a change in the government in West Bengal, and from whatever local articles that we were reading, or maybe through some friends, I could just understand that there was a big crackdown on the illegal plant mining in West Bengal, so to say.

Naveen Sahadeo: Understood, sir. Sir, my last question, because there was a change in the government in West Bengal, whatever local articles that we were reading through some friends maybe, I could just understand that there was a big crackdown on the illegal sand mining in West Bengal, so to say. Do you have any idea if the upcoming industrial policy will have Is there a proposal by the state to formalize the sand mining, which will also then, in a way, lay ground for having more organized RMC business in West Bengal as a state?

Navin Sahadeo: Understood, sir. Sir, my last question, because there was a change in the government in West Bengal, whatever local articles that we were reading through some friends maybe, I could just understand that there was a big crackdown on the illegal sand mining in West Bengal, so to say. Do you have any idea if the upcoming industrial policy will have Is there a proposal by the state to formalize the sand mining, which will also then, in a way, lay ground for having more organized RMC business in West Bengal as a state?

Speaker #2: So do you have any idea if the upcoming industrial policy will have any or any any like, you know, is there a proposal by the state to formalize the stand mining which will also then in a way lay ground for having more organized R and C business in the West Bengal as a state?

Tushar Bhajanka: I think you're right. In West Bengal, there were problems because of the illegal sand mining and the crackdown on it. That is also the reason why the demand for cement has also been a bit mute, I think, in that area. I do not know if the government is trying to formalize this and what steps they're taking to counter this. I think that once the rainy season gets over, I think they will, in some form or the other, open the sand mining, because I think it will be critical for them to do that. Right now they can't do it because anyway it's raining. It won't be possible for them to do it right now.

Speaker #3: You know, so I think you're right. I mean, in West Bengal, we did—I mean, there were problems because of the illegal sand mining and the crackdown on it.

Speaker #3: So that is also the reason why the demand for cement has also been a bit muted, I think, in that area. I do not know if the government is trying to formalize this.

Speaker #3: And what steps they are taking to, you know, counter this. But I think that once the rainy season gets over, I think they will, in some form or the other, open the sand mining because I think it will be critical for them to do that.

Speaker #3: I mean, right now they can't do it because it's raining. So, it won't be possible for them to do it right now.

Speaker #2: Understood. Thank you so much. Thank you so much. And let me again congratulate you for still being one of the highest EBITDA per ton companies, even excluding incentives.

Naveen Sahadeo: Understood. Thank you so much. Let me again congratulate you for still being one of the highest EBITDA per ton companies, even excluding incentives. We look forward to similar such leadership or that margin gain going ahead as well. Thank you.

Navin Sahadeo: Understood. Thank you so much. Let me again congratulate you for still being one of the highest EBITDA per ton companies, even excluding incentives. We look forward to similar such leadership or that margin gain going ahead as well. Thank you.

Speaker #2: We look forward to similar leadership, or, you know, that margin gain going ahead as well. Thank you.

Speaker #3: Thank you. Thank you so much. Thank you.

Tushar Bhajanka: Thank you so much. Thank you.

Speaker #1: Thank you, participants. I am going to note the questions from the participants. I would now like to hand the question to Dr. Manoji.

Operator 2: Thank you. Participants. As there are no further questions from the participants, I would now like to hand over to Mr. Balaji for closing comments.

Operator: Thank you. Participants. As there are no further questions from the participants, I would now like to hand over to Mr. Balaji for closing comments.

Speaker #2: Naveen ji, we have to go to the closing remarks by Prasad ji, as no participant is there.

Manoj Agarwal: Naveen-ji, we actually need closing remarks by Susant-ji as no participants are there.

Speaker #3: Yeah, yeah. I think she said the same. She requested the same—Anushka requested the same—which she couldn't do.

Naveen Sahadeo: Yeah. I think she said the same. Anushka requested the same.

Navin Sahadeo: Yeah. I think she said the same. Anushka requested the same.

Tushar Bhajanka: Yeah. No. I think, I'd like to just say that, of course, Q1 was not as per any of our expectations, I think because of unforeseen events globally as well as in the States. I think Q2 seems to have a similar trajectory. This is also because the GST has been significantly revised. I think first hit on the subsidy side was because the GST had reduced from 28% to 18%. I think in Q1 alone, INR 40 crore was a hit because of that. If we actually exclude that hit of INR 40 crore, then I think we were positive EBITDA in terms of percentage in absolute terms, which shows that there was resilience. I think from September onward, any further subsidy impact last year had also already hit us.

Speaker #2: Yeah. I mean, there were some—no. So, I think I'd like to just say that, of course, Q1 was not as per any of our expectations.

Speaker #2: I think because of unforeseen events globally, as well as in the state, quarter two seems to have a similar trajectory. You know, this is also because the GST has been significantly revised.

Speaker #2: I think the first hit on the subsidy side was because the GST had reduced from 28% to 18%. So, I think in quarter one alone, ₹40 crores was a hit because of that.

Speaker #2: If we actually exclude that hit of ₹40 crores, then I think we were positive EBITDA, both in terms of percentage and in absolute terms, which shows that there was resilience.

Speaker #2: I think from September onward, anywhere the subsidy impact last year had also already hit us. So, I think from quarter three onward, we will see that there's not much of a loss that we're making because of the reduction in the subsidy.

Tushar Bhajanka: I think from Q3 onwards, we will see that there is not much of a loss that we are making because of the reduction in the subsidy. That part in the books would seem to be taken care of. Then I think, the profitability also in terms of the percentage growth in EBITDA will start reflecting in the books. The first two quarters, because last year till September 2025, the GST rate was 28%, and now it is 18%. Right now we are absorbing the hit of the subsidy. I think from September onwards, last year also it came down to 18%. I think the hit that the books are facing because of the subsidy will stop being felt after September onwards, and we will start seeing a growth thereafter.

Speaker #2: And that part in the books would seem to be taken care of. And then, I think the profitability also, in terms of the percentage growth in EBITDA.

Speaker #2: We'll start reflecting in the books. So, the first quarter—the two quarters—because last year, till September 2025, the GST rate was 28%, and now it's 18%.

Speaker #2: So right now, we are absorbing the hit of the subsidy. But I think from September onwards—last year also—it came down to 18%.

Speaker #2: So, I think the hit that the books are facing because of the subsidy will stop being felt after September onwards, and we'll start seeing growth thereafter.

Speaker #1: Thank you. On behalf of ICICI Sikkim, that concludes today's conference. Thank you for joining us, and we will now conclude.

Operator 2: Thank you.

Operator: Thank you.

Manoj Agarwal: Thank you.

Operator 2: On behalf of ICICI Securities Limited, that concludes today's conference. Thank you for joining us. We now ask you to-

Operator: On behalf of ICICI Securities Limited, that concludes today's conference. Thank you for joining us. We now ask you to-

Manoj Agarwal: Okay. Thank you.

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Q1 2027 Star Cement Ltd Earnings Call

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