Refused to commit on clinker utilization 9m q3.

My first question pertains to the volumes. Sequentially, the volumes are flattish. Could you throw some light that given that seasonally, Q3 is expected to be better than Q2, why we haven't been able to deliver volume growth. And while the tolling arrangement with the JP has been stopped, but we are still shipping volumes from our East plants, so how much is the volume? And why should we not -- when we are already underutilized, why should we see that Y-o-Y we have still grown except tolling?

I think as we said that the market growth has been in low single digit in our view. And if we look at this quarter, the sales volume from Dalmia plants has been around 3.7%. We are serving some of the central markets, but we are not serving all markets from Dalmia plants. And I also think that if I look at the 9-month performance, our growth is ahead of the industry growth. So I think overall, there has been a macro slowdown. And that macro slowdown has definitely impacted overall growth for every company. However, I think on a 9-month basis, our growth has been faster than the industry.

Okay. And in terms of what would be your clinker utilization for the 9-month period at least or maybe Q3?

I think we don't give our clinker utilization numbers. We share our cement volume numbers and our CC ratio keeps changing, depending upon what's the demand in the market and what product mix we sell.

Okay. My second question is on the management bandwidth and the transitions that we have seen of late, the recent one being of Mr. Bansal. So how are we rebuilding the team? Are we in advanced stages of hiring people? How do you see that planning out in the next couple of years?

I think Rajiv has been with us for 4 years. He had built a very strong team and a very strong process, internally. And I think our team is fully geared up to take forward the agenda that he started along with me and along with our entire leadership team. We are fully equipped to handle it. I think overall, as I said a few quarters ago, we are looking at succession planning in every role. We started this exercise with I taking over from Mr. Singhi. And in all critical roles, talent is being mapped, and we are looking at proper succession planning and ensuring that we give opportunities to our internal people as well as wherever needed, we can -- we'll also recruit people from outside.

On volumes, just wanted to check, like while you mentioned that you grew 3.7% on your own plants, how much of that would have gone to Central India? That was one as against, let's say, the 0.37 million tons that was from tolling? And was there any market share loss for you in any region?

I think, as I have said earlier, we don't share region-by-region data. But I can only say one broad point that we are not serving all markets of Central India from Dalmia because it is not long-term viable. Those are not the core markets. Some markets we are serving. And I also want to say that the JPA tolling arrangement was in a more spread out market in both UP and Central India, which, from Dalmia plants, we cannot serve and will not serve. So I think to that extent, the addressable market is slightly less, but we can't share with you the regional numbers in state by state.

Sir, a couple of questions on Northeast. I appreciate we don't give region-wise profitability, but if you could give some sense of utilization levels or directionally on the profitability and how much it does contribute at the company level. The second question is, what is our coal sourcing strategy specifically for the North east plants. The reason to ask this is there have been recent unfortunate events in the region. And lastly, again, the market leader has actually made indirect foray into the region. So what is our strategy incrementally to combat or ensure that our market share remains good and we also protect our profitability.

I think first of all, we are unable to share region wise numbers. I can only say that we are one of the strongest players in Northeast with unmatched footprint and an unmatched cost structure and a great brand and distribution. I think we have seen that in almost every market, wherever we have done brownfield expansions, in markets where we are already present, those expansions have been very, very low risk. And it gives us instant access to distribution. It gives us here an established brand. We have a low cost structure, and our ability to serve the market better than our competitors in this market gives us an advantage. I think we are quite lucky that the timing of our investment is coming together with the likely surge in demand in Northeast. I think we are seeing a lot of announcement in hydropower projects. We are seeing a lot of announcement in infrastructure. And also, there is a huge push from the government of India to secure our borders as well as create connectivity of Northeast with the mainland. So, I think all this all augers very well with the demand growth projection in Northeast. So I would just say that we welcome competition. Competition always keeps us on our toes, makes us more efficient.

Sir, specifically on coal sourcing?

On coal sourcing, look, this is an accident which happened in a mine, which was being operated by some Local miners. I don't think we are doing any coal mining in Northeast. So this is something which local miners have to think about and worry about.

Sir, would you like to highlight on our sourcing mechanism? Is it coal India? Is it imported, linkage? How should we look at that?

There are multiple sources, but mostly, it is on the local miners as well as some portion comes from the Coal India subsidiaries, but that is very small.

First, I just wanted to ask on volumes. As you can understand from all these questions, if we strip out the sales to Central India, it does look like in the core markets, Dalmia seems to have lost market share in this quarter. I just wanted to understand that in the last few quarters, there's been a lot of volatility, some quarters higher growth than the peers and lower pricing growth. Some quarters, it's the opposite. And there's been churn in management team. There's been learnings from trying to enforce pricing discipline. I just wanted to understand what have all the learnings being from this volatility in the last few quarters? And the changes in the sales strategy?

I think, as I said, our long-term initiatives remain the same. We will continue to invest in a strong brand. We will continue to invest in a more retail distribution channel. And we will make sure that in each of our markets, we premiumize our product mix as well as continue our low-cost position. So I think our overall direction remains the same. Quarter-to-quarter, there will be variations. And I think, my only feeling is that over the next 3 to 5 years, we want to build a culture where we can compete on practices and not on price. So I think we want to build a culture where distributors can work with us as long-term partners.

And sir, what sort of timeline are we looking at for this NCLT purchase to kind of go to the next phase?

It's very difficult to comment because there are total IBC process can take quite long, but there could be other ways within the IBC.

Understood. Understood. My next question is on our expansion plan beyond 49.5 million tons. So are we on track to give some firm plans on a bottom-up basis sometime in the coming quarter, by end of the financial year? And do we expect some bit of organic plans in new regions like Central North in the next phase of expansion?

Sumangal, I think I have already said that we will share our plans in July. And, I think we will stick to that timeline.

Okay. I understand. I mean just following up, I mean, overall, from a capital allocation framework, I mean, is the low utilization also a point of consideration? And given that we are in the range of 60-65%, maybe not able to grow beyond the market like always, is there a case to delay expansion even beyond maybe next 1 or 2 years?

Sumangal, I've told you all that utilization is not the same across all regions. And I think please trust us that we factor in utilization and market growth when we think about our expansion plans. So you don't have to worry about the fact and we make these investments with a long-term horizon. and we are going to look at our capital allocation strategy along with our strong balance sheet. We have said that we don't want to take net debt to EBITDA beyond 2x until there is a large acquisition or something strategic, which comes up. And I think we will stay within that capital allocation framework. And yes, utilization and long-term demand growth and market structure will play a role in our decision making.

Okay. Secondly, on the volume side, anything for the fourth quarter in the sense like what are you expecting our full year volume growth to range?

See, as we said that the Q4, we expect the growth to increase by about 6% to 7%. And of course, we had a, last year, high volume, but still we are optimistic that we'll be growing rapidly and show the growth in line with our trajectory, what we aspire to maintain.

Sorry, just clarifying on the volume growth, is the 6% to 7% for the industry or for you or both?

That is for the industry. we will not like to give a quarterly guidance, but I think as we said, we'll aspire to remain one of the leaders.

So one question for you, Puneet. And sorry for harping on this again. Can you help us understand how competitive landscape is evolving in East and South market specifically? Just trying to understand if you continue to grow at, say, 1.5x of industry will that come at the expense of cement prices over the next couple of years?

I think, look, again, in terms of the competitive landscape, I see 2 or 3 things. One, I think consolidation will continue. We have said this earlier also both because a larger part of the organic growth will go to larger players, and there will be M&A. So I think that story is playing out. I think consolidation will further accelerate in this industry. The second part is, I think every industry goes through a time where the players prioritize volume over value. I think this is the time when everybody is aggressive and going for market share. And I think there is added headwind because of the lack of demand growth in the first 9 months. As you know, industry has grown at a low single digit, and first half was even worse. So this is a phase that we are going through where the players are prioritizing market share over margins. And I think every industry goes through a phase where people will start prioritizing margins over market share because beyond the level, market share will not deliver value.

My question is on pricing ex incentive. So adjusted for -- let's say a higher incentive on a quarter-on-quarter basis, prices appear higher by around 1.5%, 2% Q-on-Q. How do they stand on the exit of the last quarter because December has seen meaningful price increase, so which could imply -- I mean -- and what kind of price increase assuming price remains stable in the fourth quarter?

As I said, this includes roughly about INR 14 crores of incentive pertaining to the first half because in one of the plants, we got this incentive from the effective effect 1st April. So INR102 crores includes INR14 crores of the previous quarter. And as I said, our guidance for the current year is we expect incentive to be around INR325 crores because quarter 4, the volume increases to match with impact of the incentive also slight increases. And even coming year also, we can expect INR90 to INR100 per ton kind of incentive to be there.

Yes. Sir, just to reconfirm, so to reach 75 million tons by FY '28, 25-odd million tons, so broadly, correct me if I'm wrong, INR16,000 crores to INR18,000 crores kind of a capex we need to do. So just wanted your broader assumption, if you can help us in terms of how much, in terms of the net debt, we can increase because previously, we are talking about our net debt-to-EBITDA should not cross 2x.

I think we will give you the full road map by July. So please be patient till then. And we will tell you how our balance sheet will also look. We have told you that our broad capital allocation policy will remain the way we have outlined. We are going to stick to that discipline, and we will share with you the full detailed plan by July. So please, wait till then.

Two things, sir. What is our expected industry level growth in FY '26? given that close to 120-odd million ton capacity will be added in FY '26 and '27, do you still think that there is a structural chance of cement pricing going up because incremental supply is much, much higher versus incremental demand?

So, look, it's too early to say, but I would just say that if the GDP growth picks up, we think that the demand growth would be in the range of 6% to 8% next year. And in terms of capacity additions and demand growth not keeping pace and there could be a slight oversupply. I don't know if your number of 120 million is correct or not. But I think, I had said a few quarters ago that we are going through a phase where there are short-term headwinds and the supply growth will exceed demand growth in the short term. But I think if you look at a slightly longer term view, always averages out, and we think over the 5- to 7-year period, the capacity utilization of the industry should gradually go up.

I had 2 questions. One is, I understand that the East has not grown and while you have a larger market share in the East, somewhere we've seen something like a 4% to 5% growth in the East in third quarter. However, you still see a decline in your overall volumes. how do you think the fourth quarter panning out for you specifically, as you say the volumes will not be impacted because of this coal incident, but how do you see the fourth quarter panning out? And second thing is even with the decline in volumes, I don't see a hit from the fixed cost absorption side. So what has really changed on the fixed cost side, I mean, your other expenses, which has seen a decline of 6%.

On the fixed cost side, we have been taking care of our expenses to keep them controlled. So that is one of the reasons. And of course, the number of shutdowns which are higher in Q2 have reduced in Q3. So that is also partly to explain that this cost is under check.