I see that in Q4 you were at 94% clinker utilization, could you also provide the clinker produced in FY '25? And with Panna 2 coming through, expansion plans beyond '26? Also CAPEX plan for '26?
Clinker production for the year as a whole is 12 million tons, 11.92 million tons. We are working out on the various options for our journey beyond 2030 to become a 50 million producer. We have options for Jaisalmer, Karnataka, Orissa, and another line at Panna. Mostly in next three to four months' time maybe by closer to commissioning of this plant we should be in a position to know our next plans of expansion. CAPEX will be again in the range of Rs. 1,800 crores to Rs. 2,000 crores in this year.
Has there been any update on the Orissa limestone mining lease agreement with the state government? What has been the incentive booked this quarter and guidance for FY '26?
The update is that we are still pursuing and unless we get either on getting the mining lease or the a long term arrangement which could support a project, we are still pursuing with the government. It looks challenging, but I think we should have an answer sometime in the next three to four months' time. Incentive we are booking on the accrual basis, normally in the range of Rs. 75 crores to Rs. 80 crores every quarter. Except in this quarter we have incentive which we got for Prayagraj, that is the incremental incentive of Rs. 12 crores which has come in this quarter.
There was news regarding Container Corporation working with you on tank containers for bulk cement movement as well as LNG vehicles for end-to-end logistics. Can you highlight the scope of work and how it will benefit the company?
On tanker movement this is another line which some companies are doing. We are in discussion with them. Everything is for freight optimization and we are able to resolve container cost. We had a meeting with the Chairman of Container Corporation. There is an increased demand for bulk cement going on, so how that would benefit on movement of bulk cement. They will give a proposal. We will review the proposal. And then take a final call.
On clinker utilization on annual basis in North, Central and South operation, paint segment loss for quarter and full year, competitive intensity in putty segment, and cement pricing trend post March?
Annual basis the clinker utilization is 82%. We are not giving numbers for each region. It is more or less same, in the range of say 80%. Rs. 45 crores is the loss for the paints for the full year. Competitive intensity has not softened. The competition especially on the putty is continuing to be very competitive, as a result is a declining realization per ton quarter-on-quarter. There is no particular one-offs in the quarter. Post March if you see that North and Central there could be about 1% increase in the pricing, at least from the exit. In case of the South, definitely about 5% to 7% increase is there in the pricing in the South region.
Are there any one-offs in the quarter on cost or realization that are unlikely to continue next quarter? And the UAE plant - is the EBITDA contribution sustainable, can we say UAE generates Rs. 1,800 crores of EBITDA sustainably? And on Jaisalmer preparedness?
No, there are no one-offs, but we have got the good volume numbers, mainly driven by the Central India. We are ready for the expansion. The UAE plant has a turn around and the UAE profitability is better. Toshali, the loss has reduced during the quarter. The UAE numbers will be around anything between Rs. 15 crores to Rs. 20 crores quarterly. Otherwise, if you look at I think between Rs. 15 crores to Rs. 20 crores quarterly they should be sustained. On Jaisalmer the cluster is ready for development, there is some activity by the competition. We are working out on all the details. Clear picture should be there between next four to six months' time.
We were indicating about the cost reduction journey, so could you tell us about where we are in that? And freight cost has gone up on lead distance basis - how to understand cost reduction better? On regional dynamics, which sectors are doing better in central? And other cost has gone up on per ton basis - what's the structural reason? And volume guidance for FY '26?
On the cost reduction journey, we have a scope for Rs. 150 crores to Rs. 200 crores. The exit in logistics cost is close to Rs. 35, Rs. 40 in the logistic cost. On green power also there's an exit, around Rs. 75 a ton is the exit which we have already achieved. The incremental benefit this year could get is maybe another Rs. 25, though the exit would be high. Lead distance is a result of where the customer is - we have opened up Bihar, so it's a new market. In Central, demand was good in March driven by housing and infra. Rural demand is definitely good. For us we concentrate more on trade volumes, main emphasis is to increase trade share. Other cost - it is mainly the advertisement and marketing spend extraordinarily in this quarter for the network creation. As we expand and enter new markets, this spend will continue. '26 volume guidance is close to about 20 million for the gray. And combined volume should be about 22 million.
My question was also regarding pricing, can I confirm post margin is 1% in North and Central, and 5% to 7% in South?
Yes, 5% to 7%.
On the paint business, how do we see the outlook in FY '26? And a bookkeeping question on the railroad mix?
On the paint, despite the competition, we have been able to close the year with the top line of Rs. 275 crores. And again, in next fiscal we should have a top line anything between minimum Rs. 400 crores to Rs. 450 crores. We should be able to improve upon our margins as during this year there was some modernization activity done at the paint plant which is resulting in cost savings. We are correcting on discount structures. Our primary reason to enter the paint business was we were already there with putty and we are using those counters. Our rail is 12% in this quarter, rail movement.
On premium cement we have already reached 15% in this quarter, how do you see premium cement reaching in FY '26 as a percent? And what was our fuel mix this quarter?
For the quarter we have achieved 15%, but we are working towards increase in premium, maybe another 2% increase overall. For the year the overall was about 14%. So we should do about anything between 15% to 17% in this year. Our fuel mix was like around 70% of the pet coke. And balance the alternate fuel and the imported, Indian and the imported crude.
On paints, what's the EBITDA breakeven for us, at what level do we do that? Volume growth - 18 million to 20 million tons consolidated? And on EBITDA per ton, what aspiration would give satisfaction for current fiscal? And the upcoming expansions of grinding unit, Bihar and Panna - one quarter of benefit in March quarter?
I think in FY '27 we should be able to achieve that, maybe it's one year extension because we bought the plant, so about FY '27 we should have a breakeven. Yes, 18 million we moved to 20 million tons. In case of the white the growth trajectory will not be much, nominal 1 lakh ton here and there. On EBITDA per ton, satisfaction is definitely much higher that we should be able to maintain what we have achieved in the last quarter. We will be definitely happy if we achieve a number which is more than FY '24 the EBITDA per ton was Rs. 1,087. But that's not in our hands. Our target was within FY '26. As far as the brownfield expansions are concerned, which is clinkerization and 1 million ton each at Panna, Prayagraj and Hamirpur, I am confident that we could be able to achieve that within December. The Greenfield grinding maybe would take a month or so extra, but though we are targeting by December, latest January, they should be on-stream.
If we will be starting the 6 million tons by December, January, is FY '27 we should have a 50% plus utilization, 3 million ton extra volume? Trade mix increased significantly to 71% versus 66%, further possibility to increase? Paint EBITDA loss was just Rs. 3 crores this quarter vs Rs. 15-17 crores last - by FY '27 breakeven or this year? Revenue target of Rs. 600 crores in FY '27 paints, intact? And next expansion CAPEX - 20 million tons - Rs. 11,000-12,000 crores, Rs. 2,000 crores yearly? And cost saving exit Rs. 75 vs Rs. 150-200 - average vs incremental? Green share target by FY '26?
Definitely 2 million, 2.5 million, 3 million I mean as of now it is difficult, because even in this year some of the buckets when we have the volume, some of the volume numbers would be there, will be part of the expansion in this year also. On trade mix, new markets like Bihar, the entire volume is in the trade segment only. When the grinding unit gets started, then we will enter non-trade. On paint, as branding investment more or less remains the same, incremental top line with improved gross margin will bring down the losses. Initially it was FY '28, now we are targeting break even by FY '27. Yes, it should be Rs. 600 crores. If we grow annually year-on-year by Rs. 150 crores, that will definitely help. On expansion - if we target 50 million tons, the kind of investment mentioned will have to be made. On cost saving, the average cost saving during this year over last year would be about Rs. 40 a ton. The exit is Rs. 75. We used to get on an average another additional Rs. 40, Rs. 50 as an incremental in the next fiscal on year-on-year basis. By FY '26 green share should be closer to 60, after Panna should be closer to 60.
From UAE plant, are we at optimum utilization? What is the import being done into India from UAE plant? Any CAPEX on UAE plant? And in white cement and putty business, volumes will remain flat in FY '26? On gray cement 20 million tons - volume from new plant? And price increase in Maharashtra?
The UAE plant is not operating at that level as yet. We are exporting a certain volume from UAE plant for our certain markets in the Southern region, that volume is around 40,000, 45,000 tons annually. Asian Paints' plant is likely to commission sometime in Q2. That will definitely have an impact on white cement consumption because they would also reduce the volume which they are taking from us going forward. We will be growing in the putty and there may be some slippage. For the UAE planned we have entered into a dry mix category where we are doing quite well, we are number three in the dry mix segment. So we are working out on Africa. Africa is growing, the putty there. From the new plant, major volume growth will again come from Central India. The expansion itself could be another 0.5 million and balance will come in. Out of that 2 million tons growth we could see more than half coming in from Central India. On prices, it has broadly mainly increased in the Karnataka, not so much in the Pune region but it is more in the Karnataka region.
Volume mix around various geographies for FY '25, like between North, Central, and South, including Bihar. New Bihar grinding unit - plan to grow East as well now. What's the rationale of going more into Bihar when you can cater to UP, MP with better realization given Bihar has lower pricing?
Broadly I would say, maybe 65% and 35% broadly, I mean, exactly from North and South should be about 65% and 35 in the Central. East is part of Central plant. Central plant, that's a natural extension into Bihar from Central India. Because Bihar does not have any limestone. So it is only fed by Central India plants. So it's a natural growth where we are setting up there. So clinker will definitely go from Central India into Bihar. When you want to expand, there is definitely some subsidies in Bihar which we may get. As you grow, growth you cannot pick and choose. If you do not expand your territory then you cannot grow.