For bookkeeping, what would be volumes out of Orient business this quarter?
I would refrain from giving that. Orient does not have its own direct sales because we have migrated from Orient brand to Ambuja and ACC. These assets are operating at a healthy level at clinker and cement both. On an overall basis we have a good healthy utilization of the cement capacity at 18.4 million tonnes.
What would be the volume for Penna Cement this quarter?
I would refrain from giving individual unlisted company volumes - they are part of MSAs. We are at 18.4 million tonnes for capacity which has gone up to 105, with average capacity at almost 95. So overall capacity utilization is around 77-78%.
How much money for Penna is likely to be paid this year and when will Penna's clinker capacity in North come on board?
Clinker should come to us by Q2 itself, by end of September. Other assets like Krishnapatnam and small CAPEX at Tandur are progressing well. Balance small payments left for Penna will be paid within contractual terms of the DSPA. Jodhpur asset is bang on time and progressing well - a beautiful asset.
Could you share the volume numbers for the full year now adjusted for clinker sales? And for Orient and ACC, what would be the CapEx and capacity enhancement?
For the full year we are targeting to hit 118 million tons. Volume can be broadly extrapolated using current 75-78% utilization trend. On Orient CapEx, priority is improving overall efficiency rather than immediate expansion - this year more about cost numbers and de-bottlenecking. Chittapur and Devapur expansion will be looked at next financial year. M.P. is not an immediate priority. Detailed Orient growth plan will come separately.
On the marketing side - during the Marwa visit you indicated simplification of marketing structure with only 3 layers. Have you progressed on that? And on calcined clay - one of our peers has commercialised it; is this on priority for us?
On calcined clay vs fly ash - I am sitting on a huge opportunity of fly ash; those who do not have the opportunity will look around for different products. There is no better substitute to fly ash because the chemical process and cement strength is far superior, well demonstrated in many labs. On the 3 layers marketing structure - that is more internal, not right to discuss on this forum, but yes we are simplifying and reimagining the whole org structure, plant structure, and you will see prospectively a positive impact.
On realizations post the quarter - how have realizations been across different geographies?
I am very upbeat about realization. With strong brand equity we are able to get the right price and have also upped the price of our premium cement. Realization is better off and will remain better off for leaders providing high-quality premium cement and addressing solutions. We are bringing good discipline in adhering to whole channel network and pricing - that will continue from our side.
Are prices today better than what you expected in June?
I would not say. June saw an improvement in prices. Our focus on continuously addressing requirements of customers will help us and differentiate us better than the industry on prices. I remain positive on demand and on this factor also.
What has been the contribution of South-based plants in EBITDA per tonne, and where should we end this year in terms of overall consol Ambuja EBITDA per tonne?
South now has a good large share - almost 26% of overall capacity while West is 23% (Slide 15). South has been a good contributor for the June quarter but South has excess capacity making it hard to predict. I am bullish on demand and positive on prices. I would not comment on overall price or EBITDA expectations - the EBITDA reported is what we are targeting to sustain and improve. Giving specific numbers will not be possible or appropriate.
For the JPA bid - what would be the strategy in case we win for the non-core assets?
Adani Enterprises Limited as a company has applied for that. Not fair from my side to comment on cement and non-cement as a complete pack since AEL has applied. I would refrain from anything further on that.
On a sequential basis, there is a sudden increase in power and fuel, logistics and other opex even adjusted for volumes. Can you help us understand in detail what's happening over here?
On a y-on-y basis there is reduction across most cost lines. The Q-o-Q bump is largely because Orient asset got consolidated this quarter while it wasn't there in March; this caused some disruption in costs. Fuel cost in fact came down from 1.73 to 1.59. Power cost has higher consumption units because of acquired assets but we see at least 5 units reduction opportunity in coming quarters. Other expenses also include higher branding/sales/promotion investments and the Orient overhead. Both power and fuel will come back to sequential numbers very soon.
What would the cost numbers be without Orient and by when should we expect this to normalize to pre-Orient acquisition levels?
Coming to this quarter itself, you will see a sharp improvement. With renewables push, my power costing has come down. So this quarter itself you will see a good level of improvement in terms of sequential quarter. The integration takes a couple of months here and there. Acquired assets have done very well in terms of volume - hence the 20% jump on volume. On the cost side this quarter itself you will see a good level of stabilizing.
On an unadjusted basis, your volume grew by 20% year-on-year. When industry grew by 4%, where would Ambuja Console be on a fair comparison basis?
If I adjust and only consider Ambuja and ACC erstwhile capacity, it comes to almost 13%.
Pertaining to slide 18 of the deck - same volume on a consolidated basis is 18.2 for the last quarter, but in the last quarter's deck the number was 18.7. EBITDA hasn't changed. How should I reconcile the two numbers?
So far CLC, which is clinker plus cement both were considered, but we are not in the business of selling clinker. Like all other competitors we now report on basis of cement factor. So for March, 18.2 is the cement sale. The 0.5 difference between cement and clinker is for the CLC factor. The 18.4 is purely cement sale - no clinker factor. EBITDA and everything is now reported as a factor of cement.
If I exclude Orient's and Penna Cement's volume in this quarter, we are standing at around 1-1.5% of volume growth YOY. Is it a fair set of assumptions?
Absolutely not. If I adjust for the acquired assets I am still sitting on a healthy volume growth of 13%.
On capacities - timelines are no longer indicated in the presentation. What is the commissioning for each of those capacities you were giving earlier? Updated timeline now?
Out of 18 million tonnes earlier indicated, 5 has already been achieved. The balance 13 is in fairly advanced stages. This quarter you will see some of these capacities, by December most including Salai Banwa, Penna Jodhpur, Bhattapada and a couple more. By March, 118 million by FY26 is there to be achieved as indicated.
Bhattapada is facing some delays. You had earlier indicated March 25 commissioning. Why is it getting delayed - is it linked to Chinese equipment vendors and Chinese engineers not being allowed into the country?
No, the vendor you are referring to is already a vendor to us for some of our other assets. We do not see any issue on that. The March target is a management target. There are no concerns on the vendor or on execution and completion. With brownfield expansion in established estates, a couple of months here and there is nominal.
Could you provide the cash position at the end of June?
March end was almost 10,250 odd crores. Right now we are sitting closer to 3,000 odd crores. This is after the overall acquisition of Orient, capex of almost 2,000 crores for the June quarter, and 550 crores for dividend. So we are holding 3,000 odd crores of cash and cash equivalent.
Is the expected effective date for Orient 22nd April or 18th June for merger/consolidation purposes?
Naveen, it is 22nd April.
Is it safe to assume Rs.10,000 crore CapEx for FY26?
You can consider ballpark 1,000 here and there. So 10,000 is a good amount to assume. I would have considered between 9 and 10, but 10 is okay. That includes Penna also.
What CapEx is at ACC and what about progress on the Wadi clinker?
After Ametha, Asian acquisition and Salai Banwa progressing very well in U.P., ACC focus is improving cost efficiency, green power and WHRS. Sindri was expanded as announced in March. Wadi line is in the drawing boards - dismantling of line 1 already commissioned. Wadi is in pipeline but not for this financial year - limited initial groundwork only, will come in next financial year. The bridge in EBITDA between ACC and other peers will be bridged very fast.
Out of the Rs.9,000-10,000 crore, how much CapEx can one work out in standalone ACC?
Generally you will factor 75:25 between parent company (Ambuja) and ACC. Sometimes 70:30 or 75:25 kind of thing.
On ACC - significant cost bump on a sequential basis for both raw mat as well as other costs. Is it tied to clinker units shut down in South, higher inter-regional trade, higher clinker cost?
Given early monsoon in June, we did scheduled maintenances at Wadi for ACC. Whenever there are scheduled maintenances you find a bump in that quarter but it gets neutralized over the year - benefits will come in subsequent quarters. Other expenses for ACC include settlement cost, VRS, employee separation, and brand promotion/sales promotion which will get intensive this year. The delta positive impact is coming on revenue.
We have taken out Wadi 1, Bargarh and Chaibasa, so how are we substituting that clinker for the GUs in South for ACC?
Under MSA there is a good movement of clinker between Ambuja and ACC. Clinker movement this time has been almost 0.47 million metric tons. With Penna and Orient assets like Chittapur available, we use whichever is logistically best suitable. With 64 million tons of clinker capacity and 105 million tons of cement capacity, the overall balance of cement vs clinker is well balanced.
Just on the cash of Rs.3,000 crores - is this on a consolidated basis including Orient? Possible to split between ACC, Ambuja and Orient?
Yes consolidated. Broadly between Ambuja and ACC you can say 60-40 or 50-50. Sanghi, Penna and Orient would not be bearing major cash because cash flows have been used to make them debt free. The major cash is lying with Ambuja and then ACC.
On the cost saving target of Rs.530 per ton given last year - apple to apple from FY24 days, how much of cost benefits have come through and under which buckets?
The journey of Rs.530 continues. We would have hit almost 35-40% of that journey by now. So closer to Rs.200 a ton, Rs.175-Rs.200. Power is one factor with green power. Second is fuel side. Third is logistics. Raw material has been sustained with long-term fly ash agreements with the group. From here onwards I will see improvement on raw material, continued improvement on power and efficiency of power, also heat consumption while sustaining and improving on coal cost. Logistics with grinding capacity and lead distance reduction; also some EV initiatives to bring down PTPK.
On a consol basis with Orient now in picture, does the Rs.530 target still hold?
It continues. When we gave the numbers we had envisaged some acquisitions, therefore we will adhere to that number.
Other expenses on the presentation is mentioned as 678 but on a reported cost basis it is 788, with a footnote saying excluding new assets and one-time gain. Could you quantify whether these are startup costs or one-time?
It is the one-time gain which was there in the previous year. We have aligned with the comparison so YoY comparison is what we have done. The footnote excludes new assets and the one-time gain of the previous year. The new asset cost will not be recurring - therefore you will see considerable improvement on these other expenses.
Why such a big difference in profitability between ACC and Ambuja, especially when South prices went up and ACC has better region presence in south and east?
Ambuja has the advantage of captive coal mine while ACC is all third-party purchase, so fuel is an important factor. ACC power cost is almost Rs.6.10 per unit vs Ambuja Rs.5.30, overall Rs.5.90. ACC WHRS factor is 14% (one-fourth) while Ambuja has 21%. For ACC, primary efforts are working on investments and efficiency gains. The Rs.300-Rs.400 a ton gap will close to 4-digits sooner. ACC Gold premium product is a blockbuster that will help further improve topline and realization.
We see a lot of brand spends being done for ACC but the pricing gap between ACC and Ambuja is still pretty elevated. Are we positioning the two brands differently?
Both brands have strong brand equity leveraged prominently now. There is no per se promoting differently, but using their own advantages. In many pockets ACC has better price than Ambuja and in many pockets Ambuja has - because of natural strengths. East and South is where ACC has been very dominant historically; North and West is where Ambuja has been very dominant. With synergy, the blend is helping us on overall basis. ACC will see good improvement in price per bag.
On the next phase of expansion of 21 million tons, will it be largely greenfield or brownfield? What are preferred locations and geographical mix?
The 21 million for FY27-28 has lots of groundwork done - land, CTOs, environmental, public hearings, basic civil work, pre-operating expenses, technical consultants. Negotiations with vendors are at very advanced level. North will see good capacity, center a couple of assets, east already commissioned, and west also. Center is currently 8% of cement capacity, so we will see balancing across all 5 regions. Not biased to any particular belt. 140 million tons by end of March'28 is well on track.
How is the brand integration progressing in south, especially from Penna's plants? How is Ambuja's brand positioning in the trade channel in south?
Very positive. Penna and now Orient brand penetration has migrated to Ambuja and ACC. Both have done very well, dealers received it very well, all dealers onboarded into Ambuja and ACC platforms. Adjusted volume growth is 13% and unadjusted 20%, the 7-8% from Orient and Penna comes from this brand penetration. They have also helped improve price realization. I'm very happy with this transition.
In geographies of north and west Ambuja is A or A+ category - is the same positioning in south where Ambuja was not present like AP, Telangana, Tamil Nadu?
From a positioning perspective, both Ambuja and ACC remain as A category brands PAN India, including south.