Operator: Ladies and gentlemen, good day and welcome to the earnings call of J K Cement Limited for quarter and H1 ended 30 September 2026, hosted by PhillipCapital India Private 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.
Operator: Should you need assistance during this 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. Vaibhav Agarwal from PhillipCapital. Thank you, and over to you, sir.
Vaibhav Agarwal: Yeah. Thank you, Nirav. Good afternoon, everyone. On behalf of PhillipCapital India Private Limited, we welcome you to the Q2 and H1 FY27 call of J K Cement Limited. On the call we have with us Mr. Ajay Kumar Saraogi, Deputy Managing Director and Chief Financial Officer, and Mr. Prashant Seth, President, Business Information and Investor Relations at J K Cement.
Vaibhav Agarwal: I would like to mention on behalf of J K Cement and its management that certain statements that we made or discuss on today's conference call may be forward-looking statements related to future developments and statements which are based on current management expectations. These statements are subject to a number of risks, uncertainties, and other important factors which may cause actual developments and results to differ materially from the statements made.
Vaibhav Agarwal: J K Cement Limited and the management of the company assumes no obligation to publicly update or alter these forward-looking statements based on, whether as a result of new information or future events or otherwise. I will now hand over the floor to the management of J K Cement for their opening remarks, which will be followed by interacting with you. Thank you and over to you, sir.
Ajay Saraogi: Thank you, Vaibhav. Good afternoon and welcome to Q2 and the six months ended 30 September call. The board of directors met on 24 October to review the company's performance for the quarter ended 30 September, as well as the H1 ended 30 September. The major highlights, the net sale during this quarter, increased by 21% year-on-year, to INR 3,561 crore as compared to INR 2,932 crore.
Ajay Saraogi: However, as compared to previous quarter, it was down by 9%. H1, it was higher by 21% at INR 7,457 crore as compared to INR 6,167 crore. The increase in net sale is primarily because of increase in the grey cement volumes. For the H1, the grey cement volumes have increased by 19.38% at 11.3 million tonnes as compared to 9.49 million tonnes.
Ajay Saraogi: Also, the white cement, the volume has increased by 19% at 10.32 lakh tonnes in the six-month period as compared to 8.62 lakh tonnes in the previous year. The EBITDA standalone. Sorry, I read the consolidated numbers last time. I would repeat again, the standalone financial results, quarter-on-quarter had actually increased by 28% at INR 3,516 crore as compared to INR 2,754 crore. For the H1 period, it is higher by 25% at INR 7,301 crore as compared to INR 5,823 crore.
Ajay Saraogi: The EBITDA during this quarter was INR 500 crore as compared to INR 440 crore in the previous year, and INR 639 in the previous quarter. For the six-month period, it is higher by 2% at INR 1,138 crore as compared to INR 1,113 crore. The board, while reviewing this, also noted that during this period, we have commissioned the Wall Putty plant at Nathdwara of 0.6 million tonnes.
Ajay Saraogi: So that increases our total white cement and putty capacity to 3.65 million tonnes. They reviewed the working of the projects basically at Jaisalmer. So at the integrated site, the work is in advanced stage and it is on schedule, and we are confident to commission the plant in H1 of FY28. Similarly, at the grinding stations at Bikaner, the work is also progressing, and we are confident of commissioning in the H1 of FY28.
Ajay Saraogi: The Bathinda, we have received the approval, and the work should shortly start. There also, I think by within September, as of we are targeting with the September 2027, we should commission the plant. The board also noted and approved the JK Maxx proposal, which was to put up a paint plant of 75,000 KL and with an overall cost of INR 130 crore, which is within the overall limit sanctioned for the paint business of INR 600 crore.
Ajay Saraogi: So with this investment, we would be just submitting the overall investment in the paint business. As the working, the paint business is already on course of breakeven in this fiscal. We do not see that going forward there will be any further requirement or any investment in the paint business. So with this and the future investment can be made by the paint business on their own. As regards to the balance sheet, the gross debt position as on 30 September is INR 6,255 crore as compared to INR 5,136 crore.
Ajay Saraogi: The cash available, as on 30 September, is INR 1,684 crore as compared to INR 1,765 crore. The net debt is INR 4,571 crore as compared to INR 3,370 crore. The net debt to equity is 0.63 and net debt to EBITDA is 1.95. These are the major highlights. If you have any questions, I will now take up the questions and answers. Thank you.
Operator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and 1 to ask a question. First question is from the line of Naveen Sahadeo from ICICI Securities. Please go ahead.
Navin Sahadeo: Yeah, good afternoon, sir. Am I audible?
Ajay Saraogi: Yeah.
Navin Sahadeo: Yeah. Okay, great. Thank you for the opportunity and also congratulations on good set of numbers. My first question was on the volume front. With H1 volumes growing 19%, how should one look at volume growth in H2, given that Karnataka and Maharashtra are probably facing some water shortage related issues. How much is the exposure there? Are you seeing any impact of that? Also in UP, that state going in for elections, so how should one look at the volume growth in H2, please?
Ajay Saraogi: Naveen, if we look at first on Maharashtra and Karnataka, though we are already mostly sold out in the region. Yes, we do not foresee that any significant impact would be there. Whatever is about, we are hopeful that we will achieve our annual target numbers in those regions. As far as your question on UP is concerned, yes, it is going on for elections, but I do not think so election will be held before March. If it is so, there could be some disruption. Otherwise, but still we are confident that the guidance which we gave at the beginning of the year of closing at 23 million tons, we are well on track on that number.
Navin Sahadeo: No, that is not the case. I am actually expecting 24 million tons. That is what it looks like, at least from the H1 performance.
Ajay Saraogi: Yeah, see again. See, I am saying that is the guidance given at 23 million tons, it would be 23 million tons plus. If we get 24, it will be better. But as of now, because next month is a festival month, Diwali. There will be a lot of, I mean, some volumes will get affected in terms of Diwali. There is already some construction ban imposition at New Delhi because of pollution and other things. You have to factor all those uncertainties, as you mentioned about drought and other things. If they are bearing that, I mean, if nothing happens, we will definitely be closer to the 24 or something. But as we gave a guidance 23 million, we are confident we will be there.
Navin Sahadeo: Thank you. Sir, my second question then was on the cost. Your cost per Kcal was about 1.71 in Q2. If you could just help us understand that at the current spot rates wherein pet coke has surged past $185 or between $185-$190, and also the domestic coal premiums have surged or almost doubled. At the current spot rates, what will be the cost per Kcal, and will it be felt in Q3 or only in Q4 or beyond? How should we undertake that cost? Thank you.
Ajay Saraogi: There will be impact both in Q3 as well as Q4. Partially, we will get some benefit of the inventory in Q3, but the entire impact would be felt in Q4. I think the total impact from INR 1.71 as a cost, which was there on exit of how the things look, and if they continue like that, the cost may go up to close to INR 2. With that INR 2, we may say, about half should come in, which is an impact of INR 80, 90 coming in this quarter and maybe similar amount in the next quarter.
Operator: Thank you. Naveen, do you have any follow-up question?
Navin Sahadeo: No. Thank you.
Operator: Thank you very much. Next question is from line of Sanjeev Singh from Motilal Oswal. Please go ahead.
Sanjeev Singh: Yeah. Thank you for the opportunity, sir. My first question is on the demand when you said about drought and rain deficiency. So in your experience over the last 10, 15 years, whenever this kind of a situation has happened, what has been the impact on demand in your view?
Ajay Saraogi: See, it was a very difficult. It was a point raised by Naveen. We really are not factoring the drought impact. In any case, the drought impact regions, our total share is quite nominal. If you look at out of the total share of our volume, it combines about 15% of our volumes coming in from the south plant of the total volumes. So it is not very substantial. I would say that if we see the impact will not be anything significant. It could be a marginal impact.
Sanjeev Singh: Okay. Secondly, in the presentation, you have given the guideline for achieving 50 million tonnes capacity by FY30. Considering the growth plans, how do you expect the balance sheet in terms of net debt and net debt to EBITDA to be at the peak level? So where could you be comfortable, and you think that in the current given kind of a profitability, you should hold on to your plans for this kind of a growth?
Ajay Saraogi: See, as we said, if you can talk about gross debt or net debt to EBITDA may reach say about 2.3, 2.35, between 2.25 to 2.35. That is the peak which will be mostly at end of fiscal 2027. Thereafter, we would see because this is a greenfield project having a big investment. The other expansion for the 50 million tonnes are brownfield expansions where the cost will be lower, and then we would add the capacities.
Ajay Saraogi: Overall capacity is increasing. We are expecting better profitability. It is maybe from FY29 onwards, we again come back to our specific target is that once we complete this, we should be well within 1.5. But it will take two or three years when we start reaping the profits of the expansion.
Sanjeev Singh: Then my last question would be on CapEx. What should be the CapEx we should assume over the next 3 years between FY28 to 2030? I think FY27, you earlier had said INR 35 billion.
Ajay Saraogi: Yes. As we continue with the expansions, CapEx would be in the range of INR 2,500 crore yearly in the coming years. What he is saying, see, we are doing INR 3,500 crore in this fiscal, and then subsequently as a brownfield expansion, every year it will be in the vicinity of INR 2,500 crore to meet out the targets.
Sanjeev Singh: Okay, sir. Thanks a lot.
Operator: Thank you. Operator, do you want to ask a question? Next question is from line of Gaurav Nagori from Avendus Spark. Please go ahead.
Gaurav Nagori: Yes, thanks for the opportunity. Sir, I want to understand more on your profitability. If I look at your H1 EBITDA,
Operator: Gaurav, sorry to interrupt. Can you speak through the handset, please?
Gaurav Nagori: Is it better?
Operator: Slightly. Go ahead.
Gaurav Nagori: Yeah. I wanted to understand more on the profitability front. H1 EBITDA pattern is about INR 900 per ton, last year it is INR 1,000. What I am trying to understand is that if I exclude the incentive per ton for you, which is typically around INR 120 to INR 150 per ton. Given that Fujairah EBITDA margins have also gone up for the year, I am assuming that would have gone up for you also.
Gaurav Nagori: If I exclude the white cement Wall Putty margins in the domestic market, is it fair to say that excluding incentives, excluding this domestic and the global white cement Wall Putty volumes, your EBITDA per ton in grey cement would be around INR 500 per ton. Is that understanding correct in H1?
Ajay Saraogi: I do not know from where you got these numbers. One, on the subsidy, our cost is not INR 120, INR 150. Our subsidy is only about INR 80 a ton.
Gaurav Nagori: Okay.
Ajay Saraogi: What we are talking about, we are dividing it by volume numbers, and I do not know on what basis. I think whatever numbers per ton we are seeing, it is a consolidated. If you see the EBITDA margins are same for the grey and the white business, more or less same as a company.
Gaurav Nagori: Okay.
Ajay Saraogi: I do not know, maybe the 500. We have never had INR 500 a ton grey cement for EBITDA. We never had that.
Gaurav Nagori: Okay. I understand that, sir. What I am trying to understand is that because H1, when you have the blended number of INR 900, we are saying that the margins in white cement, Wall Putty, and grey cement are same.
Ajay Saraogi: Sorry, I will not be able to share each business' profit numbers. But if you have been seeing.
Gaurav Nagori: Understood.
Ajay Saraogi: If you see INR 500 a ton, if you are imagining, then if you say that 50% of the profit is from the white business, it is your judgment. I will not like to comment on that.
Gaurav Nagori: Understood. How much margin increase that you would have seen, let us say, in the Fujairah volumes in this year compared to last year, if you would be.
Ajay Saraogi: The margin increase there is reflected in the EBITDA. The EBITDA, because the costs have increased more than the realization.
Gaurav Nagori: Okay.
Ajay Saraogi: That is a direct impact on the EBITDA and the margin. That is why the EBITDA is lower, because the margins are lower.
Gaurav Nagori: Understood.
Ajay Saraogi: EBITDA is not lower only, say, on account of any fixed cost or anything.
Gaurav Nagori: Okay.
Ajay Saraogi: It is because the margins are lower, because the costs have increased, and we have not been able to pass on the costs to that extent.
Gaurav Nagori: Understood. Got it, sir. That's it from my side. Thank you.
Operator: Thank you. You may press star and 1 to ask the question. Next question is from the line of Philip Matthias from Geojit Investments. Please go ahead.
Philip Mathai: Thank you, sir, for taking my question. First of all, congratulations on a great set of numbers. I just want to know with regard to the paints business, what was the revenue this quarter? Earlier, you had given a guidance that FY27, the revenue from paints business would be somewhere around INR 500 to 550 crore, and 2028 will be plus INR 150 on the 2027 base. Has the guidance changed or just want to know regarding that. That's my first question.
Ajay Saraogi: Yeah. Paint revenue in this quarter is INR 116 crore. We maintain our guidance for the year as a whole, because we have already reached a level of around INR 250 crore in H1.
Philip Mathai: Sir, my second question is with regard to the expansion post 2028, where you have given 11 MTPA brownfield in Muddapur and Panna. What is the breakup like? How much capacity are you going to add in Panna, and how much are you going to add in Muddapur?
Ajay Saraogi: It is around 5 to 6 million tons at each location.
Philip Mathai: Thank you, sir. That is it from my side.
Ajay Saraogi: Okay.
Operator: Thank you. Participants, you may press star and 1 to ask a question. Next question is from the line of Patanjali Srinivasan from Sundaram Mutual Fund. Please go ahead.
Pathanjali Srinivasan: Hello.
Ajay Saraogi: Yeah, I have a question.
Pathanjali Srinivasan: Yes, sir. Sir, congrats on good set of numbers. I have a couple of questions. First is your execution this H1 has been very good. Like, a lot of peers are actually reporting much smaller volume growth numbers. Is it fair to assume that we would have gained a decent amount of market share this quarter?
Ajay Saraogi: Well, basically what you see in the volume numbers is basically we have completed an expansion in central India. The results of the expansion are quite evident. In last fiscal, we completed a 6 million ton expansion. So the expansion volumes are there. Yes, we have in the other markets also, but it is not to that extent. The major volumes are from central India.
Prashant Seth: Actually, overall growth of the north market has been good in this quarter. Normally the players of the north have reportedly higher growth numbers, and east was a slightly depressed market. This is because of the regional imbalance also.
Pathanjali Srinivasan: Is it fair to assume that we have gained market share or that is not?
Ajay Saraogi: No. North we are at par with the market. Since we do not have extra volume in the north, we have maintained our market share in the north, and we have definitely gained market share in the central India, the markets of central India.
Pathanjali Srinivasan: Got it. Second thing, one of the data points that you gave is your trade share and share of premium. I see very healthy growth in trade share and share of premium is also picking up over the last, I would say, seven or eight quarters. How does this improve our profitability? Also, if you can explain, where are we making more inroads? Is it more new micro markets where we are able to do this better, or is it newer markets that we are entering? Where are we benefiting from?
Ajay Saraogi: This is actually across share, like premium products. We are trying to increase the premium share across all markets. Again, while working on premium products, it is again related to trade basically. When you push more premium, you try to get more insights into the trade market. Yes, definitely trade markets helps us to have a better profitability. We continue to work towards that, and you see, we are making a lot of, as you see as a part of our expenses, we are doing a lot of investment into the marketing, looking to our future expansion.
Ajay Saraogi: That is one of the reasons that we are able to capture the market, sell our expansion volumes at a much faster pace. As a part of expansion, we continue to work in the market so that whenever we come with expansion, like now we are coming up with a big expansion in the north. In the next fiscal, we have to see that we get a good market share in the north also.
Pathanjali Srinivasan: Got it, sir. Just one last question related to this, sir. When you mentioned that the profitability is higher in a premium product, I just want a general range. What would be the additional percentage of margin that you will make on a premium product?
Ajay Saraogi: Yeah. A premium product, normally you get between about INR 150 average extra profit. But there is a segment taking premium products. If you do not produce and sell, so the premium segment is also in-
Operator: Participant. Sorry to interrupt you. Sir, we lost your audio in between. Can you repeat the last few sentences once again, please?
Ajay Saraogi: What I said that the premium market demand is also increasing, and you have to keep the pace, otherwise this will result in losing the market share for trade.
Pathanjali Srinivasan: Got it, sir. Thank you, sir. Very detailed and very great set of numbers. Thanks. Thank you very much.
Operator: Thank you. Participants, you may press star and 1 to ask a question. Next question is from the line of Prateek Kumar from Jefferies India. Please go ahead.
Prateek Kumar: Yeah. Good afternoon, sir. I have one question on your unit EBITDA performance. It has been trailing some of the larger peers' performance for past few quarters. It used to be in line or higher at times in the past. Also with commissioning of Jaisalmer now next 12 months, how do you see profitability compared to your peers? Have you kind of settled with a lower EBITDA per ton versus peers, or how should we think about your EBITDA per ton performance, particularly versus peers?
Ajay Saraogi: No, see, vis-à-vis peers, I think if you compare, we will continue to be amongst the top 3, 4 in terms of EBITDA per ton. Which if you see even as of now, whatever results have come in, we are there. Despite the fact that we had some higher costs in the H1, if you look at the 6 months working. More or less, we are there, and we are confident that we will be able to maintain our profitability. Even I think Jaisalmer is going to help maintaining this profitability. It should not result in any dilution of profit.
Prateek Kumar: Okay. Jaisalmer is expected to help. It will be as similar because location-wise it is like off.
Ajay Saraogi: Yeah, because today, because there is no capacity, we are not able to service certain segments and certain markets because we have a limitation of supply.
Prateek Kumar: Okay. Other question, can you further explain your justification for entry into paint segment, which is already oversupplied? Does this significantly help you cross-sell putty, and as a result, you are wanting that expansion instead of just wanting to set up that as an independent unit?
Ajay Saraogi: See, one is that we are already going to touch INR 500 crore in this. The existing plant will get fully utilized when we achieve this number, or maybe going forward in the subsequent years. So we have to plan out to have a new capacity by the time this plant gets fully utilized. This plant itself will take certain time. By the time we commission this new plant, the existing plant would have been fully used. So we need to have a source of supply.
Ajay Saraogi: Otherwise whatever efforts have been done to build up this segment and along with putty, we are meeting out the customer's demand. That will take a backward. It was necessary to ensure that we are able to continuously supply the increased demand, because next year also, FY28, we don't have exact, but I think we will definitely be growing another INR 150 crore minimum, if not more. So we are working out on those details. With that, how will we meet out that demand?
Prateek Kumar: Sure. But how should we understand from business IRR return perspective? I know cement operates independently, but does this business operate on, as I was asking earlier, on an independent basis from IRR perspective?
Ajay Saraogi: Independent, as we have said that from the paint business this year, IRR takes some time, but we should have a positive EBITDA this fiscal. Going forward also, gradually as we increase our market share and we increase our reach in the market, definitely, we would see EBITDA from the business. So this year it should be an EBITDA positive next year. Maybe 3% to 5%.
Operator: Sorry, Chandra, we again lost your audio in between.
Ajay Saraogi: What I said is that this year in paint business, we should end up with a positive EBITDA. Going forward, as we grow the paint business along with putty, we would see in the paint segment itself, profitability increasing year-on-year. It will not be a very sharp increase, but yes, definitely 2% to 3% increase in profitability year-on-year.
Prateek Kumar: Sure. These are my questions and thank you.
Operator: Thank you. You may press star and one to ask a question. Next question is from the line of Amit Murarka from Axis Capital. His line had dropped, has reconnected. Please go ahead with your question.
Amit Murarka: Yeah. Hi, thank you. Firstly on the Kcal itself. Fuel cost Kcal at, I think INR 1.75 this quarter is 15% to 20% lower than what other companies have reported. I just wanted to understand what is driving this lower fuel cost. Is it like higher domestic coal? If you could just tell me a bit more on that.
Prashant Seth: Yeah. See, Amit, it is because of the change in the blend also. One is the automatic change with the start of Panna line 2, where we are actually using Indian coal. Practically, we have reduced our pet coke consumption to 30% to 35% only now, and the Indian coal is 55%. Fortunately, we were having some stocks of the old rate and even now the Indian coal rates are going up, but our consumption in this quarter is at a quite low rate. That has resulted into the lower overall per Kcal cost. In the next quarter with the rising Indian coal prices and the pet coke prices, we will definitely be above INR 2.
Amit Murarka: In Q3 or by Q4 as in INR 2?
Prashant Seth: As we said, both in Q3 and Q4. Partial impact would be there in Q3, and remaining in Q4 will have the full impact.
Amit Murarka: Sure. Second question is on the plant utilization. The PPT says that the clinker utilization was 95%, whereas cement I think was 67% or 70% something that is mentioned there. Will all of this clinker inventory be consumed in Q3 itself, or there will be further carryover to Q4 of this?
Prashant Seth: No, actually clinker inventory has depleted in the previous quarter because we took maintenance of most of our kilns. One is that we have reached to the mean the normal clinker inventory, plus there is some surplus clinker because normally because of the seasonal impact, the volumes are down in this quarter.
Amit Murarka: Right. My question is that there is decent amount of clinker inventory as we can see from the inventory movement line item also. Will all of these get consumed, the excess inventory?
Prashant Seth: Not all of this, because as I said, that last quarter clinker inventory was lower than the normal. One is the normal level of the clinker inventory, which will continue from Q3 onwards.
Amit Murarka: Okay, understood. Just a last question on the revenue. You give a breakup between grey revenue, white revenue and the paints revenue is mentioned as INR 116. But if you add all that up, there is still a gap of like INR 60 odd crore which comes in.
Prashant Seth: That is RMC and the CC revenue.
Amit Murarka: RMC and what revenue, sorry? Construction chemicals. Okay.
Prashant Seth: Construction chemicals and RMC. Mainly the RMC, because we started from the previous quarter only. INR 60 crore is the RMC and the construction chemical.
Amit Murarka: Okay. But looks like it scaled up mostly in this quarter because earlier the gap was not there so much in Q1.
Prashant Seth: In Q1 it was INR 50 crore.
Amit Murarka: Okay. Q1 is INR 50 and this quarter you are saying INR 60 crore for these two businesses. Would there be any EBITDA being made on these two businesses?
Ajay Saraogi: RMC is at a developing stage. If you look at it, there is no EBITDA at this stage because each RMC plant, as of now, we have 23 plants in operation. We target to be, by March 2027, 50 plants. Each plant takes about six months to get to break-even. Initially you set up a plant, and since it is on a tolling model, we have to assure a fixed cost to the tolling agency irrespective. By the time the break-even volume starts coming, it takes three to four months time to get the break-even volume.
Operator: Thank you. I am going to request to come back for a follow-up question. Participants, you may press star and 1 to ask the question. Next question is from the line of Sarthak Tita from DSP Asset Managers. Please go ahead.
Sarthak Tita: Yeah. Hi, good afternoon. Thank you for the opportunity. I do not know if this was asked earlier. I just wanted some color from you, sir, on the pricing part in current spot prices versus the average of Q2. If you get some color in our core regions, that would be very helpful. Yeah.
Ajay Saraogi: So actually, we started seeing some price increase in latter part of September, which we could not, very marginal realization has been there in Q2. But yes, in Q3, beginning in the month of October, if we say from mid-September, there has been an overall increase in price of around INR 20 for bag, both trade, non-trade combined. So that is the increase across, if it is an average for us.
Sarthak Tita: Got it, sir. So fair to assume that this would be reflecting on the Q3 part, if at all these are stuck through, right?
Ajay Saraogi: Yeah. If they sustain, definitely it will be quite good.
Sarthak Tita: Okay. Got it. Thank you.
Ajay Saraogi: If they can cut off the cost increase and everything which has been there.
Sarthak Tita: Fair enough. Got it. This was very helpful. Thank you very much, and all the best.
Operator: Thank you. Next question is from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah: Hi, sir. Congratulations on good set of numbers. Couple of questions, sir. Just on the paint to get a data point. So in Q2, what was the EBITDA?
Ajay Saraogi: Q2 was a loss of INR 2 crore.
Shravan Shah: INR 2 crore. And for full year, we are looking at some positive-
Ajay Saraogi: Break-even for the, yeah, positive EBITDA.
Shravan Shah: For FY28, will it be a kind of a 5% to 6% kind of EBITDA margin which is doable or given kind of a INR 650 crore to INR 700 crore revenue we will be doing?
Ajay Saraogi: INR 700 crore is basically 5%. Initially, we say yes, we will be targeting 5%, but I am definitely 3% to 5% should be the EBITDA.
Shravan Shah: Okay. For RMC this quarter, INR 60 crore. We were looking at a kind of INR 100 crore revenue from Q4. That should be kind of doable.
Ajay Saraogi: Yeah. There will be higher in RMC in this quarter and then Q4 definitely make that INR 100 crore.
Shravan Shah: Okay. Got it. And incentive for this quarter was how much, sir?
Ajay Saraogi: Incentive?
Shravan Shah: Yes.
Ajay Saraogi: We just get back to you.
Prashant Seth: INR 25 crore.
Ajay Saraogi: INR 25.45 crore is for the quarter.
Shravan Shah: Okay. INR 45 crore. The similar run rate should be there in Q3 and Q4, or it could be a kind of INR 50, 55 crore?
Ajay Saraogi: Yeah. It will be about INR 50 crore because, see, we are not getting any incentives. Aligarh is not there, in North we don't have because we are taking the import credit, so it is not available. It is basically coming from a few grinding units. So it could be around the same number.
Shravan Shah: Okay. On the white cement front, on a console level for H1, we have seen a 4.9% kind of a volume growth. For full year, last time we said that we are looking at 8%, 10% kind of a growth. So that number is doable for this year?
Ajay Saraogi: See, we have to see what has happened, because on console basis when we talk about in the UAE, Fujairah operations are affected. Yes, there is an increase in the India operations, but we will not be able to compensate the entire loss because we are not able. Whatever Fujairah was feeding into the Indian market, that we are able to feed from the India operation.
Ajay Saraogi: But we are not able to meet the shortage for other countries. Fujairah is not able to export any cement or clinker to any other part of the world except for the GCC nations. They are not able to send material anywhere else. It will be difficult to meet out that shortage. Otherwise, there could be some shortfall in that numbers.
Shravan Shah: Okay. Sir, given that the clinker utilizations are as Prashant Seth has mentioned, the 95% utilization. Obviously for H2, we definitely, given the 20% grey cement volume growth is there, we should be able to reach across to a kind of a 24 million tons.
Ajay Saraogi: No. 1 minute. Our guidance is 23 million plus. I am not committing anything on 24 million.
Shravan Shah: Yeah. I understand, sir, but the investors are making that number, sir. Definitely you always
Ajay Saraogi: Try to aspire to that number. There are many other factors, 20% growth with the Q1 base, and we have to see other things. I am not too sure that, though we will definitely try to see whatever best can be done, but we are not committing anything on a 24 million ton volume number.
Operator: Thank you, Shanawan. I request you to come back for a follow-up question. I request to all the participants, please limit yourself to two questions per participant and rejoin for a follow-up. Next question is from the line of Pinakin Parekh from HSBC. Please go ahead.
Pinakin Parekh: Thank you very much. Sir, my first question is, can you give us a sense of where do you see the absolute net debt peaking out? You have mentioned on an EBITDA per ton ratio level, but where can we see this net debt number peaking?
Ajay Saraogi: The net debt today is about INR 4,571 crore. It could peak up to closer to INR 6,000 crore.
Pinakin Parekh: Sure, sir. This is based on the 40 million ton plan or the 50 million ton plan?
Ajay Saraogi: I think 6,000 is on a 50 million ton. That is where it should peak out, net debt.
Pinakin Parekh: Okay, got it. Second question, sir, on cement pricing is that you mentioned that the INR 20 per bag between mid-September and mid-October. Given what you are seeing on the ground, do you think the industry would try to push for further price hikes after Diwali or the current price hikes are enough to cover all the cost pressures that we are seeing on the ground?
Ajay Saraogi: No, actually, there is still a requirement of INR 10 to INR 15 in the price to meet out all the cost increases because it is not only the fuel. The packing cost continues to be very high, the PP granule cost and packing cost which started falling has again increased. The geopolitical situation continues to be there.
Ajay Saraogi: Fortunately, in between we saw a big dent on rupee devaluation. The rupee has been quite strong over the last few days, say for the last 15, 20 days. So we do not see, but in case there is again, if the rupee gets weaker, that will also have some impact. So I think another INR 10 to INR 15 minimum is required. That gap would still be there.
Pinakin Parekh: Got it. You see this happening around after Diwali or do you think it is on the ground it is difficult to absorb the price increases?
Ajay Saraogi: Well, I think it can happen after Diwali because now, Diwali, people will start moving in next 10, seven, eight days or so. The construction activity will get slowed down because the laborers start moving out and then they will only join back around the 20th, not before that.
Pinakin Parekh: Got it. Thank you very much, sir.
Operator: Thank you. Participants, please limit to 2 questions per participant and rejoin for a follow-up. Next question is from line of Parvez Qazi from Nuvama Wealth Management. Please go ahead.
Parvez Qazi: Hi, good afternoon, sir, and congratulations of a great set of numbers. Just needed two data points. What was our C/C ratio this quarter and what was our fuel mix? Thank you.
Ajay Saraogi: C/C ratio was 1.5 and fuel mix was 55% Indian coal, 13% alternate fuels and balance is pet coke.
Parvez Qazi: Sure, sir. Thanks and have a good day.
Operator: Thank you. Next question is from line of Ritesh Shah from Investec Capital. Please go ahead.
Ritesh Shah: Hi, sir. Thanks for the opportunity. Sir, can you please update us on the status of Mahan and West of Shahdol coal blocks? What is the status? By when it can actually help us on the cost cut?
Ajay Saraogi: We have already started work on the Mahan coal block at the site. We have got all the approvals and the work has started at the site. We see that sometime in Q1 or H1 of FY29, that is mine. This is what we are targeting in H1 of FY29 to make this Mahan operative. We are still working out on the second mine, so we are first concentrating on the first Mahan, which is the larger block, and then concentrate on the maybe we will be in a position, say, another six to eight months on a definite schedule for the Shahpur mine.
Ritesh Shah: Sure. Sir, would it be possible for you to indicate how much will be the landed cost, say, FY29 a little far, but just to understand from a cost-savings standpoint? I understand it is a 1.2 million mine. Please correct me if I am wrong.
Ajay Saraogi: Yeah. We expect the coal cost to be within INR 1.25.
Ritesh Shah: Okay. This is encouraging. Thank you so much. Sir, my second question is on fuel mix. You did indicate AF or pet coke and local coal on a percentage basis. But is there any further scope to optimize this, or if I have to put it the other way around, is there any challenge in procuring local coal wherein we will be forced to go more for pet coke or the other way around?
Ajay Saraogi: No. So see what happens. It is a location thing. Our central plant will be more based out of the local field. So there it is more economical. The imported fuel will not be economical. It is only used as a blender, some high calorific as a blender, which is, say, limited up to 10%, not more than that. Now, when we come to north and the south plants, there Indian coal, one, it is very difficult to get Indian coal of that volume.
Ajay Saraogi: We do not have any linkage for these plants. So from the open market to get a consistent quality and the volume required for those operations is not feasible. So there the imported US coal or pet coke will always be there, and we will have to primarily use that fuel in the north and the south plants.
Operator: Thank you. A final reminder to all the participants, you may press star and 1 to ask the question. Participants, please limit to one question per participant and rejoin for the follow-up. Next question is from line of Simran Kumari from Narnolia Financial Services. Please go ahead.
Simran Kumari: Hello, and congratulations on the good.
Operator: Simran, you are not audible. Can you speak through the handset, please?
Simran Kumari: Yeah, I am using handset. Am I audible now?
Operator: Ma'am, your voice is not coming clear.
Ajay Saraogi: If you could be louder.
Simran Kumari: Am I audible now?
Operator: Yes, go ahead.
Simran Kumari: Hello. Yeah. Congratulations on a good set of numbers. Most of my question has been answered. Just wanted to get some sense on the power and fuel costs going forward, like, the way I am seeing the power and fuel cost in this quarter, how it will be going into Q3 and Q4?
Ajay Saraogi: As I said earlier, we should see power and fuel cost increasing by between INR 80 to INR 100 in each of the quarters.
Simran Kumari: Okay. Thank you so much. That was my question.
Operator: Thank you. Next question is from line of Harsh Mittal from Emkay Global. Please go ahead.
Harsh Mittal: Yes. Good evening, sir. Good afternoon, sir. Thank you for the opportunity. My question is on the white cement realization per ton. We have seen some sharp jump sequentially this quarter as well, around 7.5%. Well, you did allude it last quarter that it was due to the restricted material movement from the Fujairah. Do you see further improvements here in ensuing quarters, or how should we look at it, sir?
Ajay Saraogi: Whatever increase you see year-on-year is because, yes, as a part of the cost increase in the white business, the white cement prices have also been increased. I mean, it was increased, in fact, in the Q1 itself at the end. But the possibility of further increase is quite challenging. We are not expecting any further increase in the white cement because again, there is some, I mean, it's a barrier in our cost prices beyond a particular price. The customers are not ready, so it is quite challenging. Yes, though, we are trying to work out if there is any, whatever how we are able to pass on the further cost increase. But as of now, it is a bit challenging.
Harsh Mittal: Yeah. Understood, sir. Sir, any guidance on the white cement volumes, given that we have commissioned the new white cement plant this year for this FY27?
Ajay Saraogi: The putty plant is actually which we have commissioned. Whatever number we have as a guided number, it will continue with that number. This is to meet out the peak demand and we are already operating at about 90% capacity utilization. If we had not commissioned that plant, then we will not be able to grow going forward.
Operator: Thank you. Next question is from the line of Siddharth Malhotra from Kotak Securities. Please go ahead.
Siddharth Mehrotra: Thank you for the opportunity. Sir, just wanted to confirm, we have obtained the EC and CTE approvals for the Bathinda project in Punjab. Is that understanding correct?
Ajay Saraogi: Yeah. It is under the approvals. We are expecting the formal letters very shortly. Everything is fine.
Siddharth Mehrotra: Okay, so we have not received them, but we expect them shortly. Is that the correct understanding?
Ajay Saraogi: Yeah. Within this month, it should be there.
Siddharth Mehrotra: Understood. Slightly delayed versus our previous expectation, if my understanding is correct, right?
Ajay Saraogi: Yeah. We are hopeful that immediately upon receipt, we will start the work at the site.
Siddharth Mehrotra: Got it, sir. Just, sir, one small follow-up question, if I may. Sir, we are seeing in the standalone white cement volumes, the growth is 13%, 14% odd year-over-year. Could you just maybe explain why such a sharp recovery, and maybe is it expected to continue?
Ajay Saraogi: Which is serviced from India. Earlier, the volumes were serviced from Fujairah last year, and now this is serviced from India. That is the reason the growth is there. Yes, also with the growth in market, both for white cement and putty, there is a growth in the market, and we have sold more material.
Siddharth Mehrotra: Okay. That is very clear. Sir, India capacity remains as is, which is roughly 2.6, 2.7 MTPA a year, like white and putty, right?
Ajay Saraogi: India capacity for white and putty is 3.05. 0.6 is the white cement capacity in UAE. Total capacity of white cement putty is 3.65.
Operator: Thank you. Next question is from the line of Chinesh Kodali from Equirus Securities. Please go ahead.
[Analyst] (Equirus Securities): Yeah. Hi, sir. Thank you for the opportunity. I just wanted to know about the cost pressures you mentioned about heating, renting, and fuel parts. Are we expecting any cost pressure on that front? Also wanted to know if we have any one-off cost regarding maintenance that were recurring in Q3.
Ajay Saraogi: No, I do not think the packaging cost has already peaked out. I think we should not see any further increase in the packaging costs. But definitely on all these costs, if there is impact of if rupee depreciates, then there could be some cost impact because it has a direct impact on the randers cost.
[Analyst] (Equirus Securities): Okay, sir. The one-off maintenance cost, if you have undertaken any maintenance costs during the quarter, specifically to it.
Ajay Saraogi: No, sir. Routine basis, all planned maintenance, sir. Nothing specific.
[Analyst] (Equirus Securities): Sir, just last question on, sir, what will be the utilization that we would have achieved on our Bihar plant since we have commissioned eight months now into the period. What will be the utilization approximately now?
Ajay Saraogi: About 50% is there. Closer to 50%.
[Analyst] (Equirus Securities): Sure, sir. Thank you, sir.
Operator: Thank you. Next question is from the line of Girija Ray from Nirmal Bang. Please go ahead.
Girija Ray: Hi. Thanks for taking my questions. Coming back to the white cement business.
Operator: Girija, your voice is coming muffled. Can you speak through the handset, please?
Girija Ray: Is this fine now? Clear?
Operator: Slightly better.
Girija Ray: Am I audible? Yeah. Coming back to Harsh Mittal question, he was asking about white cement business. Again, see, the thing is that realization I can see sequentially Q1 and Q2 it has improved and as you mentioned because of higher cost. Up to certain level, we can take a price hike. Just for assuming, let's say Q4 is always a volume-driven quarter for the grey cement and Q1 is a price-driven quarter, what we believe. Similarly, can someone assume any quarter where we see a volume sprout in white cement or realization depends likewise?
Ajay Saraogi: No, I would not say the white cement, the fluctuation is not so much there on quarter-on-quarter. Definitely this quarter has been good. This month is a good month for white cement. It is a pre-festival season. We should see the peak volumes in this month. But again, then we have a lean month, which is November because of the festivities. So the volumes will again suddenly dip, and then it is so based on quarter-on-quarter, there will not be any big variation. Yes, there will be some growth, but it is not anything which is quite significant.
Girija Ray: Thank you, sir. All the best.
Operator: Thank you. Ladies and gentlemen, due to time constraint, we will take the last two questions. Next question is from the line of Naveen Sahadeo from ICICI Securities. Please go ahead.
Navin Sahadeo: Yeah, thank you. Thank you for the follow-up. My only question was how do we apportion the advertisement cost between the Putty, white cement business, and the Paints business? Because I think this quarter we were saying it is breakeven. Paint business was breakeven. This quarter is a slight loss, but we continue to expect that this year it will be breaking even.
Navin Sahadeo: Also very encouraging to know that future CapEx will be from internal accruals of this particular segment only. So I wanted to at least understand at a very steady state, what is the margin that we are expecting this business to carry and the advertisement cost, how is that apportioned? Thanks.
Ajay Saraogi: So, one, see, as far as the margins are concerned, we are trying to work out. We are working out on the improvement of margins and the paint margins to be. We see what are the margins of the competition and say which is around 40% plus. We are presently lower. So over a period of time, we continue to work and reach the numbers of around 35%, 38%. So this is the number which we are presently targeting. As far as the apportion of advertisement, see, it is common because this is a Maxx brand where the activities are both for paint, putty, and partially for white.
Ajay Saraogi: So it is a common brand which we advertise. More or less we have worked out more as an allocation, try to be more specific so that each business gets its due apportionment of the cost. It is not based on any top line or anything, but we are trying to allocate the cost so that for the paint gets fair, whatever is the paint advertisement cost, it is charged to the paint business.
Operator: Thank you very much. Ladies and gentlemen, due to time constraint, we will take that as the last question. I will now hand the conference over to Mr. Vaibhav Agarwal for closing comments.
Vaibhav Agarwal: Yeah, thank you. On behalf of PhillipCapital (India) Private Limited, we would like to thank the management of J K Cement for the call and also many thanks to everyone joining the call. Thank you very much, sir. Need help to now conclude the call. Thank you.
Ajay Saraogi: Thank you everyone.
Navin Sahadeo: Thank you.
Ajay Saraogi: for joining the call. Thank you.
Operator: Thank you very much. On behalf of PhillipCapital (India) Private Limited, that concludes this conference. Thank you all for joining us and you may now disconnect your lines. Thank you.
