Cost staircase reset to INR4,500 peak and INR250/yr glide.

Heartening to hear that cost optimization journey is on track. Can you help us understand the quantum of cost savings achieved during the year? Also is there any change in the guided benefits of INR100 per ton in fiscal '26 and INR150 in fiscal '27?

When we started in September '22, we were at INR4,250 cost levels, and in March '24 quarter at INR4,170, then committed to INR3,650. So far we have achieved around INR150 to INR175 per ton of cost reduction and the balance INR300 to INR325 per ton is what we expect in FY '26 to FY '28. The cost reduction is driven by WHRS, AFR and renewable power, fly ash strategic investments (10-year agreement with Adani Power for 5 million tons at almost negative 400), BCFC rakes as a game changer, and marine logistics with 8 shipping vessels in advanced stages of ordering. The INR100 per ton in FY26 and INR150 in FY27 guidance is absolutely broadly on track, in fact the team is committed to achieve it before what we have committed.

On the revenue side, our share of premium products has improved to 29%. Can you help us understand how to look at this over the next couple of years, taking into account expanded capacity, both on organic and inorganic basis?

The share of premium cement has been averaging 25%, 26%, and this time it is 29%, 30%. Focus remains very core to promote premium cement. We are substantially increasing ground network, putting whole lot of branding and promotion activities, ensuring consistent quality supplies. Premium cement gives almost INR200 to INR300 per ton extra realization and our target for FY '26 is around 35% on premium cement.

On ACC - there were a few transactions including land purchase under ACC Mineral Resources for about INR680-odd crores. Could you help understand what is this land for? And by when can we expect new capacities planned on this?

Overall ACC had cash outflow of INR1,100 crores from INR4,660 crores to INR3,590 crores; total deployment around INR4,500 crores including INR2,300 crores in fixed assets and CWIP, INR1,300 crores working capital, INR750 crores lease liability. The INR690 crore land investment is for grinding units and acquired coal mines on the western side of the country, closer to Chanda. ACC also invested INR750 crores in BCFC wagons for Ametha, Kymore, Wadi; INR500 crores in Salai Banwa and Sindri grinding units; plus WHRS investments at Chanda and Wadi II. Ambuja and ACC are one composite business with MSA benefits flowing both ways.

Was there some impairment of cement plant - what was this impairment for?

Some old assets which are clinker units we now find unfeasible like Bargarh, Chaibasa and Wadi line number 1, so we have decided to put them off and proactively provide for those assets. It is around close to INR200-odd crores provided. This is a proactive prudent accounting so down the line we will discontinue these assets from a clinkering perspective. So far as grinding is concerned, Bargarh is right now working from a grinding perspective. Wadi one line we already have started the process of dismantling.

Total promoter fund infusion of INR20,000 crores post Orient and Sanghi - the entire cash deployment is largely done. You mentioned Ambuja will focus more on organic expansions now. Can we say competitive intensity in the industry can soften and overall industry profitability could improve, or there is still room for more M&A?

The promoters infusion of INR20,000 crores plus existing cash equivalents has been used; sum total of acquisitions enterprise value is almost INR25,000-plus crores. More than M&A action, overall demand levers are better - government spending, cost initiatives benefit mature companies with strong balance sheets. FY '26 should be far, far better than FY '25; March '25 quarter momentum is spilling into June. My focus will be more on organic growth to achieve 20 million ton additional in '26, but not averse to M&A at the right opportunity.

On the ramp-up of acquired units - both Penna and Sanghi. Sanghi utilization is still under 60% in peak quarter March, having acquired almost five quarters ago. Can you throw some light on Sanghi ramp-up and Penna ramp-up?

Penna clinker utilization is almost 75% to 80%; cement is lower because south markets have been sluggish. Sanghi we may be a few months behind because it's an island plant requiring power and dredging care, plants weren't well maintained, gone into refractory linings. Both kilns are now up and running with significant improvement seen in April. Sanghi will be one of the best assets in cost - my jewel and hub of clinker, sitting on 1,000 million tons of limestone. This year you will see significant capacity utilization for Sanghi.

On capex and cash flow position - cash flow was INR10,000 crores. After Orient Cement pay down what will be the cash position in April? And the open offer - what is the timing and overall cash expectation related to Orient Cement?

Open offer - we have already deposited the entire INR2,000 crores into SEBI escrow and awaiting SEBI clearance of the detailed letter of offer. We acquired Orient 46% at outflow of INR5,500-INR5,600 crores. After that I'm sitting on INR5,000 crores of cash, which is getting added with improved operating performances every passing month plus incentive and tax favorability. My entire capex for growth will be self-funded with decent closing cash and cash equivalents.

On capex - can you share for FY '26 and '27 ongoing organic capex? And broadly split between expansions on WHRS, on overall renewable, some breakup?

Growth capex is closer to around INR6,000 crores, efficiency capex INR2,500-INR3,000 crores, total INR9,000-odd crores. Some discrete and some ongoing. For 18 million tons of cement coming, one component of INR6,000 crores capex covers that. Efficiency capex primarily WHRS and BCFC rakes. Growth capex - clinker units at Bhatapara, Maratha, Marwar Mundwa and Mundra petchem (4 lines). Grinding units - Warisaliganj, Naultha, Salai Banwa, Bhatinda, Raigarh - all part of 140 million tons capacity.

On the clinker capacity that will be dismantled for ACC - what is the total capacity of the 3 plants? And does the 89 million ton clinker capacity in presentation include further expansion or will the real number be lower than 89 once you scrap the 3 plants?

Wadi I is around 1 million tons, Bargarh 1 million, Chaibasa 0.6 million - altogether 2 to 2.5 million. When we say 89 million for FY '28, this is already after factoring in the reduction of these capacities. This is part of the whole plan of 140 million tons journey.

The INR3,650 cost reduction we are talking - what's the number for fourth quarter or FY '25?

For the fourth quarter we are at closer to INR4,250 a ton, so around INR500 higher than the INR3,650 target as of now. This is a variable that keeps moving. We will move from INR4,200 to INR3,650 with all the planned investments.

What is the industry level supply that we are looking at for next 2 fiscals? The average number would also do fine.

Stretching to 2030, industry supply will be at 6% CAGR while demand will be at 7% to 7.5% CAGR. Demand will outpace supplies, leading to good capacity utilization and price uptick. Industry should target 950 million tons of cement capacity by 2030. Capacity utilization will inch from 65% to 67%, 68% at industry-wide level over next 4-5 years.

On impairment - how long have these plants been non-operational, what has been the main reason? Looking at other ACC assets, are you confident Lakheri, Kymore and others will not have impairments in next couple of years?

Kymore is one of the best assets - 100-plus years of plant with sizable limestone reserves and Ametha is neighboring; allay any concerns over there. The 3 impaired assets - they were always opportunistic depending on coal price and clinker cost. With new 10,000-12,000 TPD clinkering units, cost arbitrage will be much higher. We've used them for some quarters opportunistically; long-term strategy now needs upgradation. Lakheri is doing very well even though one of oldest ACC assets and will continue to operate as long as it's adding value. On northeast - we have acquired limestone reserves and will evaluate strategy in due course; we already serve via Bengal, Farakka and Sankrail with very good demand for ACC and Ambuja.

Could you talk about exit capacity utilization for Sanghi, Penna and Orient for FY '25?

Sanghi is around 40% to 45%. Penna clinker is at 75%, 80% and cement hovering around 45% to 50%. Orient is hovering between 60% to 75%.

Can you give a flavor on pricing across pan-India, your view on overall pricing terms for south or north, and how do you see the scenario going forward?

From December to March prices improved INR7 to INR10 per bag. As we move into this financial year there is a healthy trend better than March. Last 4 months have good momentum backed by demand buoyancy in government capex and consumption. South market shows good improvement; central to western market improvement; eastern subdued; north a little subdued but not as bad as south's substantial fall - delta will be higher in south. Overall at country level on weighted average we are seeing good healthy traction on prices.

You've done a few acquisitions in last 12-18 months - do you think the company will digest those acquisitions, consolidate and then move forward? Will FY '26 be a year of consolidation rather than aggressive acquisition?

For FY '26 our key focus is and remains on organic growth. Consolidation in terms of overall integration - we are in a very strong ground. Sanghi, Penna, Orient highlighted. Integration of these companies is natural because we are an acquired business. We've tested success right from Ambuja and ACC integration. These smaller companies will be much easier and better. Those employees are looking forward to being part of 100 million tons cement capacity platform versus their previous 4-5 or 8 million tons. They get advantage on cost, logistics and motivation levels are very high.