Operator: Ladies and gentlemen, good day and welcome to JSW Cement earnings conference call for the quarter and H1 ended 30 September 2026. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vaibhav Agarwal from PhillipCapital. Thank you, and over to you, Mr. Agarwal.
Vaibhav Agarwal: Thank you, Ringu. Good morning, everyone. On behalf of PhillipCapital India Private Limited, we welcome you to the Q2 and H1 FY27 call of JSW Cement Limited. On the call from JSW Cement we have with us Mr. Nilesh Narwekar, Chief Executive Officer; Mr. Narinder Singh Kahlon, Director of Finance and Commercial and Chief Financial Officer; Mr. Hitendra Jariwala, Chief Marketing Officer; and Mr. Kunal Mukherjee, Head of Investor Relations. I would like to mention on behalf of JSW Cement Limited and its management that certain statements that may be made or discussed on this conference call may be forward-looking statements based on current management expectations, and also something that relate to future expected business development by JSW Cement's management. Such statements are subject to a number of risks. The actual developments and results could differ materially from any management projections made on this call.
Vaibhav Agarwal: JSW Cement Limited and the management of the company assumes no obligation to publicly update or alter these forward-looking statements, whether as a result of any new business development information or future events or otherwise. Also, participants can download a copy of JSW Cement's Q2 FY27 results presentation from the company website or documents list. I will now hand over the floor to the management of JSW Cement for their opening remarks, which will be followed by interact with Q&A. Thank you, and over to you, sir.
Kunal Mukherjee: Yeah. Thank you, Vaibhav. Good morning to all, and we welcome you to the Q2 FY27 earnings call of JSW Cement. We have uploaded the results and investor presentation last night, and I hope you have been able to review these. With this, I will hand over the call to Mr. Nilesh Narvekar for his opening remarks.
Nilesh Narwekar: Thank you, Kunal, and good morning to all. Q2 FY27 has seen a challenging external environment marked by geopolitical uncertainties arising from the ongoing West Asia crisis and weaker monsoon, which has impacted the broader operating environment. However, the underlying fundamentals of the Indian economy remain resilient, supported by healthy GDP growth, sustained government capital expenditure, and infrastructure activity continuing to support cement demand. We remain constructive on the demand outlook for the balance of the year, particularly as infrastructure execution and construction activity gather pace. We have seen robust cement demand during the quarter, and this has supported price increases across our markets in September and October. With fuel and other input costs remaining elevated, we expect these price increases to sustain and support the company's margins. I would also like to highlight our continued momentum in the north region.
Nilesh Narwekar: Utilization at this plant has increased to 75% during the quarter. We are also continuing our dealer network expansion while focusing on product quality, service levels, and cost reduction initiatives. Happy to announce that at Nagaur we have achieved EBITDA breakeven in Q2. The additional 1 MTPA grinding capacity commission in October further strengthened our ability to serve this region, and our costs will continue to reduce over the coming quarters. As I highlighted in our previous calls, we have received several project approvals on the demand side, which has reflected in the current quarter's numbers for GGBS volumes and has grown by 7% YOY. The business continues to witness encouraging momentum driven by growing demand from infrastructure and the RMC sector. Moving to the key operational highlights for Q2 FY27. Firstly, on volumes.
Nilesh Narwekar: Our total volume increased very strongly by 26% YOY to 3.93 million tons, which is among the highest in the industry. Taking this product-wise, cement volume sold was 2.29 million metric tons, increased by almost 40% YOY. We saw good momentum in both channel and the B2B segment. Giving a comparative, if I was to exclude the north operations, cement volumes grew by around 13% YOY. GGBS volumes grew by 7% YOY, as I have already mentioned. I also wanted to touch on realizations, as shown in our presentation. Cement realizations for Q2 FY27 was INR 4,781 per ton, an increase of 3% YOY, but a softening of 3% QOQ.
Nilesh Narwekar: We saw a decline in prices across regions in the early part of the quarter, but as I mentioned in my opening remarks, cement prices have increased across zones in September to the latter half and of course October. GGBS realizations for Q2 FY27 was INR 3,749 a ton. We would consider this a normal variation due to mix, and we continue to maintain our strategy of stable pricing. Within cement, trade mix remained stable at 52%. Our clinker to cement factor increased to 58% with the ramp-up of north operations, especially as we currently are selling a high quality of OPC to maximize our kiln usage. Lead distance increased by 9 kilometers in the quarter to 294 kilometers. Lastly, I would also like to briefly touch on the capacity expansion program.
Nilesh Narwekar: As committed, during Q2, we commissioned the waste heat recovery system and the alternate fuel handling co-processing system at the Nagaur integrated unit. Early this month, we also commissioned the additional 1 MTPA grinding capacity at Nagaur and the overland belt conveyor for transporting limestone from the crusher to our plant. These initiatives are expected to substantially reduce our costs in Q3 and Q4. In addition to the Nagaur WHRS unit, we added 36 megawatts of wind capacity in Q2 at Nandyal in Vijayanagar, and together this has increased our green power share to 41% in Q2. Let me now hand over to Narinder Singh Kahlon to take you through the key financial highlights.
Narinder Singh Kahlon: Good morning. I will summarize the performance of Q2. Consolidated revenue was INR 1,912 crores. That is an increase of 33% YOY, and 0.8% QOQ, despite this being a monsoon quarter. Consolidated operating EBITDA was INR 278 crores. That is an improvement of 4% YOY. We saw improvement in realization in both cement and GGBS YOY. However, both fuel and packing cost also increased on YOY basis. Consolidated operating EBITDA per ton was INR 708 for the quarter. As has already been mentioned, the company achieved EBITDA breakeven in north in this quarter with a slightly positive EBITDA contribution. Excluding the north region on a like-for-like basis, revenue growth of 14% YOY in Q2, while operating EBITDA increased by 3% YOY to INR 275 crores, which equates to INR 8.21 per ton. On a consolidated basis, total EBITDA including other income was INR 295 crores.
Narinder Singh Kahlon: PBT was INR 101 crore during the quarter, including positive contribution of nearly INR 20 crores from Fujairah. PAT for the quarter was about INR 77 crores. In terms of the trend in the main cost elements during the quarter, raw material and power and fuel decreased by 2% quarter-on-quarter, with slightly higher fuel cost on QOQ basis offset by product mix changes. Blended fuel costs increased slightly from INR 1.80 paise per Mcal in Q1 to INR 1.84 per Mcal in this quarter. As all of you are aware, pet coke prices are at very high levels, and this will create more cost pressure in the coming quarter. But we are actively working towards increasing our share of domestic fuel and optimize our costs.
Narinder Singh Kahlon: Logistic cost was stable on QOQ basis with the impact of higher lead distance offset by savings from the railway busy season surcharge waiver and reallocation of volumes between Vijayanagar and Dolvi plants. Employee and other expenses per ton were stable on QOQ basis. In terms of balance sheet, net debt was INR 4,287 crores at the end of September. Net debt to EBITDA stood at 3.2x. Average cost of debt for the quarter was stable quarter-on-quarter at 7.67%. The company incurred CapEx of INR 483 crores during the quarter and INR 820 crores during H1. This is basis the cash outflow, though the CapEx number will be slightly higher. We will be happy to address your questions now. Thank you.
Operator: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Prateek Kumar with Jefferies. Please go ahead.
Prateek Kumar: Yeah, good morning, sir. I have a question on your cement realization, which has fallen like 3% QOQ since highest versus peers, especially background of your lead distance also increasing. Why is this divergence? Have you sold more aggressively in volumes versus competition driving a pricing decline?
Nilesh Narwekar: Yeah, Pratik, the thing is it's good to compare with the industry numbers on the decline, but our geographic spread compared to others, our geographic footprint compared to the others, quite different. And actually, that's what's playing out. We've not taken any aggressive price cuts, if that's what you were alluding to, because of which the volume increase has happened. That's not what has led to it. In terms of price, we maintain ourselves as what we were in Q1 as well. It's primarily the geographic spread which has led to the kind of numbers that we're looking at.
Prateek Kumar: Sure. Does that flow through to your EBITDA also? Any change in your mix which impacts your realization, does that neutralizes on cost and as a result, EBITDA per ton impact is not there?
Narinder Singh Kahlon: It flows through EBITDA.
Nilesh Narwekar: It flows through all the way to EBITDA, and then what we reported is fundamentally factoring that in.
Prateek Kumar: Sure. The other question is on leverage. There is an increase in leverage QOQ and interest cost QOQ while your CapEx seems on a run rate basis, not higher. So what are the key reasons it is attributable to change?
Narinder Singh Kahlon: No. CapEx continues in north and some land acquisition also continues for the projects which we had shared with you earlier in the previous calls. We have been utilizing the IPO proceeds that reflects in the net debt situation. There has been a marginal additional drawdown of debt. But that number is quite small. It is more of the utilization of the cash proceeds of IPO. Coming to finance cost, we all know that there has been a reset in the repo and MCLRs have been going up. Of course, this number is very marginal, but we will see more impact of this going forward. However, though I make this statement, we do not see a huge impact on our average debt cost because of the way we have financed or the debt mix it is. We do have FX loss.
Narinder Singh Kahlon: Not every foreign debt is held by us as a policy. We go as per our forex policy. You all know that there has been a sharp appreciation in the dollar, so that has reflected in our finance cost.
Prateek Kumar: Sure. I have more questions, but let me get back to the queue.
Nilesh Narwekar: Thank you, Prateek.
Operator: Thank you. A reminder to all the participants that you may press star and 1 to ask a question. Next question comes on the line of Sanjeev Kumar Singh with Motilal Oswal Financial Services Limited. Please go ahead.
Sanjeev Kumar Singh: Thank you for the opportunity, sir. In the previous answer question, you mentioned that there has been some regional mix change in this quarter. Even if ex-north basis, my sense is that the volume has grown by 11% YOY. Does it mean that you have sold higher volume in the east market where pricing was under pressure?
Operator: Mr. Singh, please go ahead.
Sanjeev Kumar Singh: Did you hear me?
Operator: Yes. Ladies and gentlemen, the management line has been disconnected. Please be on hold while we get them reconnected. Ladies and gentlemen, the management line has been reconnected. Please go ahead.
Sanjeev Kumar Singh: My question was-
Nilesh Narwekar: Yes, Sanjeev.
Sanjeev Kumar Singh: Yeah. My question was that, in answer to the previous question, you mentioned that there had been some regional mix change which led to a sharper fall in realization. X north basis volume seems to be around 11% up year on year. Does it mean that you have sold higher volume in the east region and where we believe that the prices were under pressure? Can you give some sense on your regional volume growth in the south and east markets in this quarter?
Narinder Singh Kahlon: No, definitely in the east, our volumes have gone up substantially. We will just share the number.
Nilesh Narwekar: Yeah. For cement, the volume numbers in the east, the growth has been around 20% YOY. Across the south and the west, south has been around 13%. Because of that, the mix fundamentally changing. I think you are right there, Sanjeev. That is what is fundamentally causing it.
Sanjeev Kumar Singh: Okay. My second question is on north India operations. With the kind of cost initiatives like WHR is commissioning AFR, we have seen it this quarter, how do you expect the variable cost or cost of production to move in H2 for these plants?
Nilesh Narwekar: Yeah. Our own reading is, we are expecting our cost to come down by anywhere in the range of INR 550 to INR 600 a ton with all this. And despite the increase in the fuel cost, we expect to be broadly in line with what the industry numbers are. With the commencement of OLBC, which is a significant cost saving, with the commencement of WHR and AFR, which will come into full effect in this. And as our volumes start to ramp up and our clinker utilization starts to go up, we expect these numbers to start to get corrected.
Sanjeev Kumar Singh: Okay. And my last question would be on the fuel consumption cost. You mentioned in your opening remarks that there has been increase in fuel prices. So with current fuel prices, how do you expect variable cost to move in Q3 and Q4 FY27?
Nilesh Narwekar: Yeah. As was mentioned by our Director of Finance, INR 1.84 paise per Mcal is moving up to INR 2.10 paise per Mcal, which translates to, based on a clinker factor, of approximately INR 90 a ton increase in cement cost. Which we believe
Sanjeev Kumar Singh: Yes.
Nilesh Narwekar: Which we believe, because of our increase in green energy, because we are jumping up from 41% to a higher number upwards of 50%, and the price increase that has come through in the second half of September and continues in October. We believe this should offset the impact primarily on margin, which is where I think you are taking this argument, would probably be held, and we will be able to maintain that.
Sanjeev Kumar Singh: Okay, sir. Thanks a lot. I will come back in the Q&A.
Nilesh Narwekar: Sure. Thank you.
Operator: Thank you. A reminder to all the participants that you must press star and one to ask a question. Next question comes from the line of Siddharth Mehrotra, Kotak Securities. Please go ahead.
Siddharth Mehrotra: Thanks for the opportunity. Sir, a small question on our CapEx numbers. I was under the impression that we did not have sufficient land in Dolvi for an immediate expansion. The number given for CapEx here, roughly INR 500, INR 550 odd crores, is that including the land?
Narinder Singh Kahlon: I will give you a small brief. Earlier, our plan was to put up a unit across the creek only next to the PNP jetty. Now, at our existing location, JSW Steel has cleared up some land, which we are in a position to use now. Answering your question, it will only be the lease rental or the lease premium for this additional piece of land that we will be receiving from JSW Steel. This is where we will be putting up a 2 million ton grinding unit, additional grinding unit.
Siddharth Mehrotra: Okay. Only expansions post 6.5 MTPA will perhaps require that land again, right?
Narinder Singh Kahlon: Yes. We continue to buy that piece of land. Right now it will be this piece of land which I just mentioned.
Siddharth Mehrotra: Understood, sir. Secondly, sir, on our GGBS volumes. They have sort of disappointed us with respect to growth compared to, say, the cement growth, which we just highlighted in other regions. What would be perhaps a sustainable number to sort of take for GGBS volume growth? Would it be closer to 10%, maybe higher, lower? How should we think about it?
Nilesh Narwekar: Yeah. See, as we had guided last time, high single digits is the forecast that we had given for the year, and we continue to hold ourselves. If you just go back Q1, we were, I think, 2.3%. This quarter is 7%. With the momentum that exists, we expect to meet what we had committed in Q1, which is high single digits. Hoping to get to that.
Siddharth Mehrotra: Okay. Just one last question. We expect the cost to have sort of fully reflect in their highest from this quarter. Do we expect further pressure on margins in the remaining half of the year?
Nilesh Narwekar: I think on-
Narinder Singh Kahlon: It is only the fuel.
Nilesh Narwekar: Yeah.
Narinder Singh Kahlon: It's only the fuel, which of course, today we have enough fuel till January, December and early January. But let's see how things behave after the midterm elections, US results are out, et cetera.
Nilesh Narwekar: But the positive part, honestly, out here is one, of course, is the fuel cost, which is going up. But the positive side, as I mentioned a little earlier, was our power cost is something which will come down with the higher percentage of green energy moving up from 40% to 50%, 55%. And of course, the third aspect is the price increase, which we've seen. We've seen a marked increase in the month of October. And with the kind of cost pressures that the industry is facing, we believe the price table that the industry is targeting will hold on.
Siddharth Mehrotra: Got it, sir. Thank you, and all the best.
Nilesh Narwekar: Yes. Thank you.
Operator: Thank you. Press star and one to ask a question. Next question comes from the line of Harsh Mittal with Emkay Global. Please go ahead.
Harsh Mittal: Good morning, sir. Thank you for the opportunity. My first question, you have alluded to the fact that cement prices have increased in later half of September and early October. Can you quantify the amount of price increase both in trade and non-trade in your operating regions?
Nilesh Narwekar: Yeah, sure. Let me start with the non-trade. In the South, non-trade, as we speak, for October, we are seeing a ₹15 to ₹20 per bag increase. In the East, we are seeing a ₹25 to ₹30 a bag increase, and ₹10 in West, and around ₹20 per bag in the North. This for non-trade. On trade, we are seeing a ₹10 to ₹15 a bag increase only in the East. The other regions, the prices, we are yet to see the reflection of that play out. Our view is, I think the prices should hold firm, primarily because of cost pressures that the entire industry is facing.
Harsh Mittal: Got it. My second question is on the demand scenario. We have been hearing a lot on the drought situations, and our core operating regions are also in primarily Maharashtra and somewhat of South, and these regions are mostly impacted due to the drought. Given that we are today at the month end, how has the month of October trending in terms of demand? If you can throw some light on that.
Nilesh Narwekar: It has been fairly positive. In fact, across our GGBS and cement all across. For us, Maharashtra is primarily around Mumbai and the Mumbai urban agglomerate because our cement unit in Dolvi is hardly around 110 kilometers. So that has not been impacted. The infra growth that we are seeing is significant. So that kind of supports it. Otherwise, in all the zones or the regions that we operate, the markets that we operate, our growth has been fairly positive.
Harsh Mittal: Understood. As the last question, what would be the RMC revenues for this quarter and your expectation for full year FY27? Thank you.
Nilesh Narwekar: For Q2, it was around INR 170 crores was the RMC revenues.
Harsh Mittal: The expectation for the full year, sir, FY27?
Nilesh Narwekar: No, we would refrain from going down that path because they are still being set up and there are a number of things that are being sorted out.
Harsh Mittal: Understood. Okay.
Nilesh Narwekar: Going forward, we will probably see if we can provide that.
Harsh Mittal: Okay, sir. Thank you. These were my questions.
Nilesh Narwekar: Thank you.
Operator: Thank you. Press star and 1 to ask a question. Next question comes from the line of Gaurav Nagori with Avendus Spark. Please go ahead.
Gaurav Nagori: Yeah, thanks for the opportunity. Just two questions related to GGBS segment. First one is that, can you put some color on how the cost pressure in the GGBS cost per ton compare to the gray cement? Second, have you taken price hikes in GGBS in this quarter?
Nilesh Narwekar: Yeah. I think you understand the product GGBS. So there has been no major cost pressure other than marginal increase in whatever the power cost increase or the fuel increase that we need for drying of the GGBS. So that has been marginal. That has not been significant. Coming to the second part, which is in terms of price hikes. No price hikes have been taken. We maintain our stance of continuing the price point so we guys can drive more penetration of GGBS across all the applications of concrete.
Gaurav Nagori: Understood. So just to understand it better, even the slag procurement price for you is similar to, let's say, the last year.
Narinder Singh Kahlon: Yes.
Nilesh Narwekar: Yes, absolutely.
Gaurav Nagori: Understood. Thanks for the answer.
Nilesh Narwekar: Yeah.
Narinder Singh Kahlon: Okay. The previous speaker did make a reference to RMC revenue. I just want to highlight here is that because we are just setting up the unit, our margins are very minimal. Just keep that in mind. It is very minimal because we have not yet ramped up the volumes enough to cover the fixed cost.
Operator: Thank you. Press star and one to ask a question. Next question comes from the line of Naveen Sahadeo with ICICI Securities. Please go ahead.
Navin Sahadeo: Yeah. Good morning, and thank you for the opportunity. My question was on the GGBS realization. If I am not wrong in the past, what we understand is that whenever OPC prices are under pressure, the GGBS realization also tends to come under pressure because of, I think, the product mix at the RMC level, which the RMC maker has to match. Some thoughts are linked around that. But in the current scenario, wherein cost is rising and because of which the industry is attempting a price hike, directionally, do you see scope to see some pricing improvement in GGBS? Or as you mentioned, the priority is still towards volume and not really prices.
Nilesh Narwekar: Naveen, that's a great question. In fact, we evaluate that on a regular basis. We keep evaluating concrete mix designs for different geographies, keep assessing the fly ash mixes versus GGBS mixes versus pure OPC mixes. But our current stance is to drive volume, drive penetration of GGBS in the RMC by maintaining the GGBS price. If the arbitrage becomes fairly significant, we may probably revisit, but if that's the case, I think that's where we get back. For now, it's about maintaining the GGBS price so that we can drive penetration of GGBS across the concrete applications.
Navin Sahadeo: Understood. And sir, the previous participant did touch upon the question about drought situation. In Maharashtra, I understand our sales are largely concentrated around Mumbai and maybe around Pune at max. But in Karnataka, where again the situation of water or also in Andhra, I think there is press release of government trying to impose some restrictions. Do you see any red flags there or it doesn't really matter for our catchment areas?
Nilesh Narwekar: For now.
Navin Sahadeo: Hello? I think. Hello.
Operator: Speakers, please go ahead.
Navin Sahadeo: Hello, am I audible? I am not able to hear anybody.
Operator: Mr. Sahadeo, I can hear you. Speakers, please go ahead. Ladies and gentlemen, the speaker line has been disconnected. Please be on hold while we quickly get them reconnected. Thank you. Ladies and gentlemen, the management line has been reconnected. Please go ahead.
Nilesh Narwekar: Yeah. Hi, Naveen. I am sorry. I think the line dropped at our end. Apologies for that. If you could just tell me, what is it you could hear, and where is it that dropped? Because I will end up repeating the whole statement.
Navin Sahadeo: If I could just complete my question. I do not know if you got it.
Navin Sahadeo: Your entire response missed. My question basically was around drought situation, not in Maharashtra, but in Andhra and Karnataka markets. Are we of the view that it is a potential red flag, or it does not really matter in our catchment areas?
Nilesh Narwekar: Okay, sure. Thanks, Naveen. Naveen, before I answer that, I will just take your previous one where you mentioned about opportunity for price increase in GGBS to drive realization since the OPC prices are going up. Trust me, we keep evaluating this regularly. What our current thrust is to drive the GGBS penetration in the concrete mix design. Currently, it is around 35% to 40% thereabout. Our endeavor is to take it to 50%, which is approved as per the BIS norms and probably move it beyond, because there are certain applications it can go significantly beyond. Those trials are underway. The conversations are underway. Technical conversations are underway. That is the direction that we are headed. If the opportunity definitely arises, if the arbitrage is significant, then over time, we will definitely evaluate that as an option to increase the realization.
Nilesh Narwekar: Coming to your specific question that you asked now around drought situation. In our catchment area, we are not seeing that play out for now. The geography that we sell in, we are having a fairly healthy run in terms of volumes for the month of October.
Navin Sahadeo: Thank you. Just one more question, if I may. This was around the net debt position and the CapEx plan in general. Of course, the company has ambitious, aggressive growth plans, and I totally appreciate it more so coming from the group. Because in general, I have a view that JSW Group itself is being known to be very aggressive in terms of capacity expansion, be it even high leverage. In cement specific thing, since the current net debt to EBITDA is around 3.3x, what is the comfort level for which as to continue pursuing these aggressive expansions or take a pause in terms of the leverage? Or you think leverage is just an interim number and we will still pursue very aggressively with our expansion plan?
Narinder Singh Kahlon: Naveen. Yes, the plan is always to stay aggressive, but at the same time, we have a mandate to keep the net debt to EBITDA below 3x. We will continue to be around 3x for maybe a year or so more, and definitely it is going to be below 3x in the coming years.
Navin Sahadeo: Understood. Thank you.
Operator: Thank you. Press star and 1 to ask a question. Next question comes from the line of Shravan Shah from Dolat Capital. Please go ahead.
Shravan Shah: Hi, sir. A couple of things. First, in terms of the, just to get again the guidance on the CapEx absolute number for this year, 2027, 2028. Last time we said INR 2,300 crore and INR 2,000 crore. So that number remains intact?
Operator: Hello. Ladies and gentlemen, the manager line has been disconnected. Please be on hold while we quickly get them reconnected. Ladies and gentlemen, the management line has been reconnected. Please go ahead.
Shravan Shah: Hi, sir. Sir, just to recheck in terms of the CapEx number that we have last time said INR 2,300 crore and INR 2,000 crore for 2027, 2028. So that number remains intact?
Narinder Singh Kahlon: Yes.
Shravan Shah: Okay. To reach 43.5 MTPA, the total CapEx from here on, is this INR 7,500 odd crore that we need to still spend?
Narinder Singh Kahlon: Yeah, correct.
Shravan Shah: Okay. Further in terms of it, just to get a timeline. So two expansions that we announced yesterday with the results where the timeline is there. Just to get a further in terms of the 2.5 million ton Nagaur, when we are looking at in terms of the start that plant and the 2 MTPA Vijayanagar. When is this supposed to Sorry, 2 MTPA Dolvi, because in presentation it is 4 MTPA. 2 MTPA yesterday we have mentioned in the timeline. So the balance, when it will come, and the Kujara 1.7, when it will start.
Narinder Singh Kahlon: I will answer each of them. Nagaur 2.5 should be ready in Q4 2028.
Shravan Shah: Okay.
Narinder Singh Kahlon: Kujara, Q1.
Shravan Shah: FY 2028.
Narinder Singh Kahlon: '28.
Shravan Shah: Q1 FY 2028?
Narinder Singh Kahlon: Correct. It should be around May and June next year.
Shravan Shah: Okay.
Narinder Singh Kahlon: Dolvi, the work starts and should be completed within 20 to 21 months from January 2027. That is again FY28, probably the second quarter or the end of third quarter, early third quarter.
Shravan Shah: '29.
Narinder Singh Kahlon: Sorry, 2029, not 2028. Sorry, 2029.
Shravan Shah: Yeah. Dolvi is for 2 MTPA, but we in the presentation have a 4 MTPA.
Narinder Singh Kahlon: I agree. So initially because of the land, because we did not want to wait, JSW Steel's blast furnace is ready in calendar 2028 sometimes. So we want to be ready for that slag, hence this urgency to go ahead with the 2 million tons. Parallelly, we are still working on the land, as I mentioned earlier in the call, we are working on the land east on the PNP jetty. As and when that happens, we take our decision on the balance 2 million. However, Vijayanagar we are starting again because Vijayanagar steel plant is ramping up from 18 to 24 million, and we want to be ready to catch that slag. So that work starts December this year, and it will be 1.5 years to commissioning.
Shravan Shah: Okay, got it. In terms of the cement volume for this year, how one can look at GGBFS you have mentioned for this year on the cement front, how we can look at them? At the same time, Nagaur now it is a 75% utilization is there. So in the second half, can we see the similar or will it further improve the utilization?
Narinder Singh Kahlon: No, we continue to maintain it will be a high teens growth over last year.
Shravan Shah: Okay. Got it. For Nagaur, how one can look at in terms of the second half utilization?
Narinder Singh Kahlon: No, Nagaur should definitely improve from here. If you can see, we did about INR 5.80 lac in this quarter, including sale of clinker. This number has to improve from here. We are consistently working on now that we have another 1 million grinding operational. Hello.
Shravan Shah: Good.
Narinder Singh Kahlon: Hello.
Shravan Shah: Yeah. Go ahead.
Narinder Singh Kahlon: Right now, as we have about 3.5 million grinding operational. The number will be definitely going up from here, as against INR 5.80 lac that we did in Q2.
Shravan Shah: Okay. Lastly, incentives or anything, have we finalized with the auditors for this Nagaur, the INR 650 crore incentive that we were having for 10 years?
Narinder Singh Kahlon: We are awaiting the-
Shravan Shah: Okay.
Narinder Singh Kahlon: We are awaiting the Entitlement Certificate from RIPS, the Rajasthan body. That should be coming in any time. We are working on. We are awaiting the date of the next meeting there. Whenever that happens, probably we were expecting this month end. Hope it is not happening. Maybe sometimes next month. Once we have the Entitlement Certificate, we will be recognizing this revenue.
Operator: Thank you. Mr. Shah, please return the queue for more questions. A final reminder to the participants, press star and one to ask a question. Next question comes from the line of Amit Murarka with Axis Capital. Please go ahead.
Amit Murarka: Hi. Thanks for the opportunity. On north, you can see that there is just a INR 3 crore EBITDA loss in the quarter. You had earlier mentioned of breakeven by end September. Could you just guide some more now on north EBITDA bridge from here to, let us say, going into Q4, which is generally the high quarter for the sector?
Narinder Singh Kahlon: No, it is not a loss. I think I mentioned it is a INR 3 crore profit for the quarter. It is not an EBITDA loss.
Amit Murarka: Oh, is it? Okay.
Narinder Singh Kahlon: Yeah.
Amit Murarka: Sure. But generally, how will this EBITDA scale up now?
Narinder Singh Kahlon: No, it should be hitting about probably INR 650 to INR 700 in Q4. That has majorly to do with the underutilization of the clinker line as of today. Because as you can figure out, we just have 3.3 and a half million grinding, and the clinker is 3.3. About 2.2.3 million is sufficient to give us this cement volumes that we are looking at. So once that ramp-up happens, probably when we have another 2.5 million grinding ready is when we will be hitting a higher number, much higher number, maybe close to the industry numbers. But in Q4 we see around INR 700.
Amit Murarka: 700 for north. Okay.
Narinder Singh Kahlon: For north.
Amit Murarka: From WHRS and OLBC, is there any cost reduction number that you would like to guide for the north plant, let's say?
Narinder Singh Kahlon: It is part of that 700.
Nilesh Narwekar: As I mentioned earlier, there was a INR 550 to INR 600 per ton reduction on the clinker cost because of OLBC, AFR systems, and WHR. That has been factored. It is a part of the entire EBITDA number that has been discussed.
Amit Murarka: Sure. Also in the previous quarter, I think you had mentioned you spent INR 33 crores in marketing in north. Any more marketing spend planned in north as you scale up?
Narinder Singh Kahlon: No, not as of now. We may look at that number sometime in Q4 end, but not as of now. We do not have any plans.
Amit Murarka: In Q3, there was no high spend as in normal marketing only in Q3. Q2, sorry.
Narinder Singh Kahlon: No.
Nilesh Narwekar: Yeah, it was normal. Usually a full season, so there is nothing which is extraordinary.
Amit Murarka: Sure. Just a last question, if I may. Could you also give a split of trade, non-trade in north that you are doing?
Nilesh Narwekar: Yeah. We are currently at around 53% of trade. We expect these numbers to start to go up. We are targeting close to 60% by end of the year.
Amit Murarka: Okay, sure. Got it. That is all from me. Thank you.
Nilesh Narwekar: Thank you.
Operator: Thank you. Next question comes from the line of Rajesh Ravi with HDFC Securities. Please go ahead.
Rajesh Ravi: Hello.
Nilesh Narwekar: Yes, Rajesh. You are good.
Rajesh Ravi: Yeah, good morning to the team, and congrats on healthy ramp-up at the north operation and turning EBITDA positive.
Nilesh Narwekar: Thank you.
Rajesh Ravi: My first question is just on the cement and clinker, you said 581,000 in north operations, which would imply that it would be around north of 1 lac clinker sales from the north operations. Would that be fair given that 75% is
Narinder Singh Kahlon: Yes, you are right.
Rajesh Ravi: in place. Okay.
Narinder Singh Kahlon: Yeah, you are right.
Rajesh Ravi: Understood. So this GGBS capacity, which was planned 4 million ton, and CapEx number earlier was pegged at INR 1,600 crore. Now this 2 million ton, INR 550 odd crore, which you have mentioned. So is the remaining INR 1,000 crore still remain on book for the remaining 2 million ton because of the expensive land additions or depreciation which would be required?
Narinder Singh Kahlon: No, that number will be much less.
Rajesh Ravi: Okay. The second phase would come immediately soon after, or we should factor in a lag of a year or two?
Narinder Singh Kahlon: No, there will be a slight lag. Because once we have this 2 million, that one that we are setting up, we will wait for utilization levels to hit about 65% to 70% before we start the work on the next 2 million.
Rajesh Ravi: Okay. On the GGBS, one more question. This year you are targeting high single digit growth, but for next year onward, fair to assume that 15% CAGR can resume. Is that a possibility?
Narinder Singh Kahlon: No, it should not because once we start getting. Probably we will see a small slowdown in FY28, but then the number starts going up once we have additional slag coming, both at Dolvi and Vijayanagar.
Rajesh Ravi: Understood. For FY28, we will be factoring in high single digit growth. Is that a-
Narinder Singh Kahlon: Yes.
Rajesh Ravi: Understood. Lastly, if you look at your balance sheet, the trade payables stand for, on a consolidated level, at around 80 days, which is more than the industry average of 30 to 40 days. There is a large amount of acceptances. Can you please elaborate on it?
Narinder Singh Kahlon: No, as you understand, today we are in this growth phase.
Rajesh Ravi: Okay.
Narinder Singh Kahlon: Somewhere something suffers, right?
Rajesh Ravi: Okay.
Narinder Singh Kahlon: Yeah. But not that our vendors are unhappy with us. Now these numbers will be coming down very shortly. See, but at the same time, keep in mind, I have to be mindful of the debt number also. So I don't want my debt to go up beyond a certain number.
Rajesh Ravi: Okay.
Narinder Singh Kahlon: At the same time, I want to do my CapEx sales.
Narinder Singh Kahlon: There is a lag when I spend and when I start generating cash from the investment.
Narinder Singh Kahlon: Once this starts, like Rajasthan, once it starts throwing up cash, enough cash probably in Q4 end or sometimes Q1 next year,
Rajesh Ravi: Okay
Narinder Singh Kahlon: you will see a substantial drop in the payables.
Rajesh Ravi: Understood. Then lastly, this CapEx number we are shortfall in terms of the run rate for full year INR 2,300 crore. But you are still confident that you would be able to complete the whole INR 2,300 crore by end of FY27? INR 800 crore-
Narinder Singh Kahlon: No. As I mentioned, the number that we read earlier, INR 400 something and INR 800 something, that is the cash outflow we are talking of. So we will have some acceptances, et cetera. So definitely we will be closing the CapEx number, the actual spend-
Narinder Singh Kahlon: close to about INR 2,200, INR 2,300. Not that we have slipped on that number.
Rajesh Ravi: So just to clarify, the cash flow statement which is INR 800 crore reading for H1, would that still go to INR 2,300 crore or that would be including acceptance and all that?
Narinder Singh Kahlon: No, definitely there will be some outstandings. Whatever spends are done in the February or March month probably may get paid in either March end or April. So though we may end up doing the CapEx, the payments may get deferred to April.
Rajesh Ravi: Understood. Great. That is all from my end. Thank you. Will come back in queue.
Narinder Singh Kahlon: Yeah.
Operator: Thank you. The last question comes from the line of Shravan Shah with Dolat Capital. Please go ahead.
Shravan Shah: Hi. Sir, two things. First, this INR 100 crore this quarter employee cost. So this kind of a run rate to continue?
Narinder Singh Kahlon: Yes.
Shravan Shah: Okay. Second, sir, in the CC ratio, because obviously the north plant, it has recently from 1.82 to 1.72 this quarter. How one can look at in terms of the CC ratio going forward?
Narinder Singh Kahlon: No, clinker ratio will continue to be around this number only. We are ramped up. Today we are selling OPC. This OPC number will start coming down in north. So my clinker factor should be ideally lower than this number.
Shravan Shah: Okay. The total clinker sale for this quarter is around 0.1516 million ton?
Narinder Singh Kahlon: Right. 150,000, 160,000, of which about 120,000, 130,000 is from Nagaur, and the balance is from Shiva Cement. in Q3, we don't see any sales from Shiva Cement. Yeah, that's how it is.
Shravan Shah: Okay.
Narinder Singh Kahlon: We are intended to run the kiln at full in Nagaur, and if we have to do that, we have to necessarily sell clinker.
Shravan Shah: Yeah. Sure.
Narinder Singh Kahlon: At least till December 2027.
Shravan Shah: Yeah. Okay. Thank you, and all the best, sir.
Narinder Singh Kahlon: Thank you.
Operator: Thank you. Next question comes from the line of Navin Sahadeo, ICICI Securities. Please go ahead.
Navin Sahadeo: Yeah, thank you for the follow-up. My just one question. This cost per Kcal which you have shared of 1.8 going to 1.84, based on your fuel mix and at the current spot rate, both of the various fuels that we use, pet coke or imported coal, and even domestic coal when the premiums have shot up. This cost per Kcal has gone up to how much at current spot rate? I know it will not hit in Q3 entirely, but just to understand the upper end of this fuel cost. Thanks.
Narinder Singh Kahlon: It's a blend. See, pet coke is hitting now INR 3.08 paisa today. If somebody has to buy spot.
Navin Sahadeo: Okay.
Narinder Singh Kahlon: INR 3.08 paise to even INR 3.17 paise.
Navin Sahadeo: Right.
Narinder Singh Kahlon: Imported coal today, US NAPP is about close to INR 3. Domestic is much lower. We work on lignite also to some numbers in north. Lignite, sorry, in north. Our intent is to keep the cost down. As I mentioned, we have enough stock till December and January. That will be at INR 2.10-
Nilesh Narwekar: 10 paise.
Narinder Singh Kahlon: 10 paise for us in Q3, the fuel cost. Q4, it all depends where we will be.
Nilesh Narwekar: And one important thing here, just to add to what Narendar said. It is also the proportion of alternate fuel mix and other cheaper coals that we end up putting in the mix. It is a weighted average of that. And with the AFR systems now fully geared up across all the plants and our operability at a high level, we should be able to maintain the numbers that we are talking about.
Navin Sahadeo: Yeah, great. Thank you. Thank you so much.
Nilesh Narwekar: Yeah.
Operator: Thank you. The last question comes from the line of Prateek Kumar with Jefferies. Please go ahead. Mr. Kumar, please go ahead.
Prateek Kumar: Yeah. Hello. Yeah. Sir, my question is on the cement prices. So you mentioned about the non-trade price have risen up to INR 30 per bag, but trade price have only risen in 15 in east market. So in other markets, have there been any reversals or the attempts have not been made? As you said, cost has been through the roof.
Nilesh Narwekar: Please. Not sure about the reversals or attempt, but we are not seeing the reflection of the price in the market as we stand. We are neither price takers. However, with the cost pressure that we were alluding to earlier and the general increase in demand, we expect the entire price table to start, and these are the pricing part to move towards the supply side. As it has happened in non-trade, trade will start to reflect shortly, and all of you will understand this. Non-trade sets in and automatically trade numbers will start to look up more healthy.
Prateek Kumar: INR 30 price hike in non-trade in east, is it material difference in your trade non-trade price in east?
Nilesh Narwekar: No. Sorry. Repeat the question again, please.
Prateek Kumar: You talked about INR 25 to INR 30 per bag hike in east in non-trade.
Nilesh Narwekar: Yes.
Prateek Kumar: What would be the gap in pricing in east, in the trade and non-trade?
Nilesh Narwekar: Gap in-
Prateek Kumar: Trade and non-trade pricing in east particularly.
Nilesh Narwekar: One second. See, because there is also a commensurate price increase in trade of INR 15 the bag. That is also taking. So it is a combined effect of that that we are seeing. Our non-trade ratio, I think our trade ratio in the east is at 70%. So I guess that is going to flow out into trade. If you want the exact differential, I think you can get in touch with our investor relations, and we will revert to you with the exact number, please.
Prateek Kumar: Sure. Thank you. This was the only question.
Nilesh Narwekar: Yeah.
Operator: Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question and answer session. I 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 JSW Cement for the call, and many thanks to the participants for joining the call. Thank you very much, sir. I think we may now conclude the call. Thank you.
Operator: Thank you. On behalf of PhillipCapital, that concludes this conference. Thank you for joining us. You may now disconnect your line.
Nilesh Narwekar: Yeah.
