JPA acquisition narrative quietly dropped from FY28 75mt path.

On production and inventory at end of quarter - how much was production and inventory sitting at exit June?

This buildup of the inventory typically happens every first quarter because by the end of the year, the entire industry sells all stocks from plants and depots. It gradually builds up in Q1, remains flattish during Q2/Q3 and Q4 again it gets released. Slightly higher than Y-o-Y, about INR100 crores. Puneet Dalmia added it's a seasonality effect, nothing unusual this year.

On expansion - currently guiding roughly 62 million tons in March '27, aspiring to 75 by '28. Why are you hesitant on going all out on addition, and how does Jaisalmer fit if JPA acquisition is uncertain?

We are not at all hesitant. We can press the button on construction in Q1 of next financial year in Jaisalmer. JPA acquisition is under process - JP is minimum 5 million tons of cement (Rewa, Churk, Chunar) and could be greater depending on BJCL and the Ultratech arbitration. We are absolutely not stopping. Land purchase is done, mining lease is done, environment clearance in process. We have to review the situation in March '26, which still gives us time to complete by March '28. We are even developing projects for our next phase to take us to 100 million plus by FY '31.

You said the endeavour is to go pan-India, but recent announcements are South and West India including Pune. Why did you decide on Rajasthan optionality versus what was just announced?

Our overall strategy is to create a pan-India footprint while creating significant presence in each market. Our Kadapa plant is operating at high utilization, so it's important to deepen presence in Northern Tamil Nadu, Southern Karnataka and Andhra Pradesh. We are also developing projects in regions we don't operate in - Jaisalmer and Jaypee (Central India). Both pan-India footprint and significant presence in existing markets are important.

On the ED provisional attachment with respect to Kadapa limestone (~417 hectares) - is this any form of risk?

This is a provisional attachment. We have challenged it and we think the case is unsustainable. We do not see any risk in terms of expansion or mines. We have been operating this for the last 14 years with literally no issue. We don't foresee any risk of disrupting operations.

Discounts in the marketplace have nearly doubled over last 4 years to ~INR1,200 per ton. How should we understand the marketing strategy with this number?

There are markets where we made sales on lower margins - we have to improve quality of sales, brand positioning, and deepen distribution. That is exactly what we are doing and green shoots are visible. Dharmender Tuteja added that last year industry tried to increase prices but most of the time they didn't hold and had to be given back as discounts - that price increase not made effective also shows up in discount in the annual report.

Strong pricing during the quarter sustained in July despite weak demand. Are we seeing pricing discipline in the industry, or is this near-term and we may see competitive environment return post-monsoon? Second, are we moving away from 75 mt and 110-130 mt capacity targets?

At current margin levels, no new capacity creation is viable. As consolidation happens, it will boost pricing power and margins will become respectable. Top players are taking disproportionate share of growth. There will be blips - this is not linear. We should not get swayed by quarter-on-quarter volatility. Best strategy is to take long-term view and invest. We have deep faith in India and our execution capabilities. Currently I'm quite optimistic prices will hold in the near term, but it's a cyclical business.

Timing of expansion - given operating at ~60% utilization at company level, won't we be better off going for expansion at 70-75% utilization?

Our utilization is not the same across all regions - need a granular approach. It takes time to build new capacity. We were behind the curve in acquiring land, permits and mining leases. We want to be in absolute state of readiness. We are within our capital allocation framework. We will continue to sweat existing assets - intent is profitable growth and returns on capital, not nameplate capacity.

What specifically have you done to improve price positioning? Are you vacating non-profitable markets? What steps to improve brand positioning, and how does this tie with adding capacity?

Strategy is very clear. We will continue to invest with a clear vision India will do well and consolidation will increase. There were unprofitable segments we were operating in - we don't want to operate in those segments now. Different strategy for every micro market balancing growth and profitability. Creating discipline in which segments to chase, leeway on discounting strengthens the brand. Distributors can dilute the brand if discipline isn't enforced. We are engaging deeper, giving clear messages. If it means trade-offs in unprofitable segments, we will make them.

Can we expect volume growth in line or above industry along with profitability focus?

Long term, yes; short term, we'll have to make a balance.

On capex - between Jaisalmer and Nawalgarh, you're pressing Jaisalmer. Is Nawalgarh less feasible? Risk of leases going away if delayed? Wouldn't layering be more prudent versus 18-20 mt simultaneously?

64 million tons is firm. We will look at how Jaypee plays out and be in state of readiness for all projects. We will take a call by March 2026 on whether to press the button on Jaisalmer. We have layered and created scenarios that manage risk fairly well. We will review every quarter, see how Jaypee plays out and how execution plays out.

On Kadapa capex - 6 mt grinding at Kadapa with bulk terminal at Chennai - explain the strategy versus a split grinding unit in down south Tamil Nadu.

We examined whether to put a grinding unit in Chennai or a blending unit. From an economic standpoint, it is better to put all grinding in Kadapa and just a bulk terminal in Chennai. We want to balance capex and servicing the market - this was more economically viable.

The 150-200 per ton cost saving was announced last year - has any of it come till now and which key heads will it be? Second, on JP - is one reason the auction premium for Jaisalmer (12-15%) versus no auction premium on central limestone?

We had said this was a 3 year journey from Q1 FY '25 to reduce cost by 150-200 per ton. We are doing work on renewable energy, some visible by H2 of this year. Logistics optimization will play out by Q4 of this year and into next year. On JP - it accelerates entry into the market. Auction premium is one issue but overall we want to build a Pan-India footprint and it's in line with strategy.

Capex breakup - how much has been spent on Umrangso and Belgaum till Q1FY26? How much of INR4,000 crore FY26 capex remaining? What about FY27 capex excluding Jaisalmer/JP?

For Umrangso, we're almost done - trial run starts September. About INR600-800 crores will probably get spent this fiscal on Umrangso. On Belgaum, the number should be closer to INR1,400-1,600 crores this year as most capex incurred by Q4'27. Of total INR4,000 crore capex, approximately 75-80% will go into announced growth projects and procuring land. Balance 20% supports RE, maintenance, ROI improvements. For FY27, capex should be similar to INR4,000 crores again, with approximately 70-75% growth capex and balance for maintenance/ROI/renewable.

Marketing spend reduced from FY24 to FY25 - any change in strategy? Earlier INR75-80 per ton, now declined to INR50.

Aditi Mittal said no change. Dharmender added there was a one-time brand launch expense, otherwise continuing the same. Going forward as we deepen brand leadership this will slightly go up. The focus has slightly shifted on the BTL expenditure closer to the markets - earlier the brand was launched, more ATL on IPL sponsorship; those things are shifted towards BTL.

On Northeast expansion - what incentives do these plants (grinding unit and clinker unit) bring? On annual basis how much could Dalmia accrue? Repeat the incentives accrued/collected this quarter.

On the capex, we had 200% of the incentive on total fixed cost investment, for 20 years. At a macro level, we see about INR100 per ton for the company as a whole rather than getting into project-specific per ton basis. This quarter: INR84 crores accrued and INR42 crores received.