Q4FY26 reversed Q3FY26's capex collapse: FY27 capex back up to INR1,500cr.

On cement realization, you mentioned it was INR4,840 per ton. Could this exclude other operating income, if I'm not wrong? And could you give a similar number for Q1 as well? Given that we are in the midst of a significant expansion program, what would be then the outlook on the expanded capacity? Can we expect them to kind of have a slow and gradual ramp up? And on the one-offs, you mentioned that adjusted one-off, what exactly was the one-off?

INR4,840 is excluding other operating income. The previous quarter, I had explained that because of our glitch in our SAP system, we could not come up with an NCR number. The NCR number this quarter onwards will always be disclosed to everybody, that glitch has been rectified. So we do not have a comparable Q1 number, but roughly there is a decline Q-on-Q, YoY increase you have already understood. Amit, please understand that there is no entry barriers which anyone can create in the cement market. It is your strategy of value over volume, which restricts you to your dispatches. However, I can assure you, we will be growing either in line or slightly better than the industry. S.S. Khandelwal: For our Guntur unit, we had taken power connection from Andhra Pradesh Transmission Company. And we had to create a substation at our capex, which as per the agreement entered into with them, was to be transferred by way of a gift deed back to the transmission company. This transaction took place this quarter, and therefore this write-off.

Just to delve a little deeper into, is there any other one-off in other opex? I see there is a strong jump year-on-year on the other opex side. So any explanation on that would be great. Now that we are getting out of monsoon. How should one expect demand from here on over the next couple of quarters? And are we seeing any green shoots from GST cut with respect to retail as rural demand picking up? How should we see the balance between demand and cement pricing over the next few months?

K.K. Jain: As of now there's no other one-off in the result. The expense in the current quarter is slightly higher because of the repair maintenance cost and other spares cost. Otherwise, there is no one-off in this. Neeraj Akhoury: So a little too early to project demand at this moment. As you know, we're just coming out of festival seasons. We expect that GST cut would boost demand in the long term. We have to wait and watch of this impact in the short to medium term. But clearly, GST cut was a transformational step. Ashok Bhandari: I would like to add, Mr. Gupta. The effect of GST payable on finished houses, it hurts the low and middle income houses more. So the vibrancy in low and middle income house sales as well as Tier 1 and Tier 2 cities, is expected to be far better than what it had been. Neeraj Akhoury: Given the fact that there has been a GST cut, one would argue that the demand boost should happen. But it may take some more time before actual lease is converted into purchase. And that's where I'm saying in long term, it is good for the industry. Prices, as I speak for Shree Cement, we have passed on the entire benefit to the consumers of the GST reduction. And if you see our results, I think one thing you will notice is that our prices have shown about 9-odd percent growth from last year. Going forward, it is not for me to forecast prices, it will be wrong. But what I do see that if the demand grows a little better than what we have seen in the first six months, then prices should at least remain stable, If nothing else.

Just wanted to ask on overall volume and the capacity. You're looking at especially in North now that you have new volumes from the new line. Just wanted to see how are you going to look at this volume versus value growth for the last few quarters, the focus has been on premiumization. Should we expect similar focus in new capacity that you have? And other players are also looking aggressively at North in general. As you look beyond the expansion in the release, you mentioned 80 million tons. How would you look at expansions across region where new capacity is coming in north?

So to answer the first part, as I said in my opening remarks that on premium cement, we grew from about 15% to about 21% this year. This has been possible with a very high focus on increasing our share in the premium product segment. Not only that, we have also worked on our general price levels and to make sure that we are able to squeeze our brand equity in a better way. That has been the strategy, which we have often defined as value over volume. And this strategy is something that we would like to pursue in the coming years as well. On capacity, we have just commissioned, as I said, a new kiln in our North plant. And this quarter itself very soon, you will see us also announcing the cement expansion in the same cement mill commissioning at the same location, which should happen very shortly. North remains our focus and north is something that will remain our one of the areas where we will continue to evaluate all possible methods to grow in the coming years as well. Having said that, we are growing in other regions, be it East, be it South, and that will be on. But our focus on North will never go down is what I would assure everybody. Ashok Bhandari: I have two more things to add. One is that if you look at the stand-alone and consolidated results, the EPS differential, which was always around INR6, INR7 has gone up to INR33 in favour of consolidated, which clearly points out that our UAE operations are doing far better. Also, you will note that we generally have been very conservative in our dividend payout. But this year, we have given highest interim payout in dividend of INR80.

Just one clarification question on both dividend and depreciation, sir. Generally, depreciation has been very volatile.

This year we will be depreciating about INR2,800 crores or so, which is based on the capitalization schedule. We have already charged about INR1,100 crores in two quarters, so the depreciation for the next two quarters will be about INR1,700 crores. And that's alright, because as everybody is expecting, so we are. The prices should remain stable and the demand should return, so there will be no hassle in availability of distributable profit in any case for the year. Excuse me. Once again, I stand corrected. The depreciation for the year will be INR2,450 crores, not INR2,800 crores.

Sir, for my first question is that among the three core markets of north, south and east, how is pricing today on the ground versus the second quarter average? Is it lower or is it flat? So the net realization to the company would broadly be unchanged today versus what you have seen in the second quarter? Sir, my second question is that, again, if you were to look at your three core markets and over the next two quarters, do you see any one region demand outlook to be materially better than the other between north, south and east? And if you look at your competitor capacity and expansion announcement, particularly in northern India, which is very large, should we expect Shree to defend its capacity share?

No. So, as I said that, the prices have been reduced, but that is largely because, we have passed on the GST to the consumers. To that from 28% to 18%. So the prices are lower than what it were in the peak 22nd September time. No. I would say it will be slightly lower because of all these festivals and all the demand has not been very robust in October. And therefore, we see some slippage of prices happening across India, not only in regions. As we talk about demand forecast, I always keep quiet, because we have to be cautious in this statement. As we speak, we have seen demand growth almost similar across the country, except some states, which has been lower and some states have been higher not to compare region wise, state wise one can do some comparisons. Going forward also, I think this trend should continue. I would expect north and west to be slightly better than rest of the country. Ashok Bhandari: Well, this is a trick question, isn't it? This is a trick question. We have said that we will be growing marginally better than the industry. Now, which region, what region, what kind of growth, how do you all forecast this? We have to be prepared. We are having sufficient physical resources to set up capacity in most of the areas where we operate and we will take a call as the demand scenario becomes clearer.

Now, since the time you have undertaken the measures to improve the brand positioning and the premium sales, on a portfolio level, how much would have the base realization improved on a per ton basis? And what would be the milestone year along with any timelines, if you can help? But also there have been steps to improve the brand positioning as well, the base brand positioning. So all I'm trying to understand is since the time we have taken these measures, how much would the base realization moved up?

Well, we look for the numbers, as the milestone remains that we have already reached about 20%, 21% of premium sales. This is a level at which we would like to maintain in the coming quarters as well. If there are some improvements, that would be welcome. But milestone was to reach about 18%. We have already reached 21%, up from 15%. And we will be focusing a lot that we are able to maintain this same level of premium share of our trade volumes in the coming quarters as well. Ashok Bhandari: Kunal, that is the point I'm trying to make. Mr. Akhoury in his opening statement, has said, we have improved 9% year-on-year. It is unfortunate that I could not give you an NCR number for Q1. But H1 vis-à-vis last year H1, 9% incremental price is there, which is a mix of various things. And it is, you see, please understand, my dear friend, that if we are saying that we will focus and we have reached 21% of premium sales, then the price trajectory should be upwards or stable.

Understood. No. That helps. And secondly, sir, on the cost savings especially on the logistics front. Now where exactly are we in the journey? And because we were planning aggressively increase the rail share. So could you just reiterate our positioning here. Sir, just to extend it, like in FY '25, what would be the rail mix exactly? And anything on the AFR front?

On the rail, very focused work is going on. We have, as you know, already commissioned our Purulia railway siding in our Purulia unit. We are doing siding in Kodla for which the project work, land acquisition has been done and now the construction process has started. Similarly, for Etah, we have completed the land acquisition and project work has started. So, a lot of focus has been there to improve our rail connectivity across India and you will see that very soon some of them will be commissioned. So presently, it at about 11%, of rail share in our total outbound logistics here. And we think we should reach about 20% in the coming time. If I see a savings, typically on the PTPK railway, rail is about INR 1.8-1.9 versus road at about INR 2.3-2.5, if I look at the industry across, especially in the North region. So one would expect that at least INR100 per ton savings should come from our increased focus on railway operations. Yes. A lot of project work is happening across on the AFR side as well. We are now at about 2.3% up from 1.5% same quarter last year yes. And more and more facilities are getting created as they roll out in the coming years, you will see also go up on our AFR consumption.

Got it. And sir, if I can just squeeze one more. Just some capital allocation perspective, what should be the capex number for FY '26, '27 and '28? Just to clarify, sir, 80 million ton could get spilled over to 29 you mean?

FY 26-27 roughly, you estimate INR3,000 crores and for FY '27-'28 we have a broad capex in mind, but it should be in line with this much only. It was spill slightly to FY '28-'29 because we are rethinking our commissioning strategy. But I can assure you that we will maintain our spirit of growing marginally higher than the industry growth. I cannot, please understand. It's not that we are devoid of any physical resource. It is basically how the capacity utilization of the company gets ramped up and how the demand gets ramped up. So it is dependent on that. We have taken a stance that if needed 80 can shift from FY 28 to FY 29, but then as the time passes, we'll keep on updating you.

Sir, just to check. So now currently, we have a 62.8 million ton and 6 million ton, both Jaitaran and Kodla will be added in this quarter. So we will be 68.8 and from there by FY '27 and '28, will there be any capacity addition because 3 million ton Jaitaran was postponed now? And then this 2028 or 2029 when we say, is this a calendar year or FY '28 or FY '29? Sir, trade share, blended cement share, lead distance, Kcal, fuel mix for Q1 and Q2?

Wait a minute, you're asking too many questions. Let us address one at a time. 68.8 for March '26 is given. We have given you our capex guidance of about INR3,000 crores. So we should be about 72 million to 75 million, March '27. I have already told you that let us see how the demand and how capacity utilization moves to see whether we need to become 80 by FY 28 or 29. You have seen our balance sheet. You understand we have all physical and financial resources to do this capex. But the market condition are to be recognized for planning exact dates. We are not talking calendar year at all. We talk FY only. Subhash Jajoo: Yes. So for trade sale, it was 70% in September '25. And in June, it was around 71%. Blended cement sales was 68% in September and 70% in June. In Q2, it is 441 kilometers and Q1, it was 451 kilometers. For Q2, it is 1.66 and Q1, it is 1.59. No, as per our inventory pipeline, I think it should be around similar levels, maybe slightly lower than this. No. This quarter it is like around 66% it is petcoke and balance is coal and alternate material.

My first question is, Mr. Akhoury you made a comment saying that in addition to premiumization, you're also focusing on pricing to be able to extract the best value of your brand. Could you just elaborate on that, please? Then on the volume side, for the first half, now your volumes are around about 2% on a year-on-year basis, total volume, cement plus clinker. So what is your projection for the year? And on the power side, so Green Power, I would imagine that in this quarter, our green power proportion has gone down to about 60%-odd or so?

Ashok Bhandari: Well, look, Raashi, let us understand. Only 21% is premium. In our sales rates, Mr. Akhoury has clearly said only 21%. But if you look at the incremental price rises, it must be incremental plus general category also. You get my point? So overall, there is a price buoyancy. Now how it will pan out is completely dependent on market conditions. But the delta between peer groups, we are certainly trying to converge on the top line or rather price. Neeraj Akhoury: So in a sense, as you know in the industry market for same kind of product, there is a price ladder, which is not less INR15 to INR20 or even higher. And this is what we call the price gap between Brand A and Brand B. Through our pricing actions as well as distribution actions, we are trying to reduce this gap. That is one effort that has worked for us in the last 6 months and that is where we said that we will focus on value over volume. In addition to that, we have also focused on premium products, which are higher priced than the base product. And so these two combined for base brands as well as for premium there has been a focus of reducing the gap with some of the peer group companies. And that has helped us to record a 9% price growth last quarter versus whatever figures the others have. Ashok Bhandari: We should do about 37 million to 38 million tons this year. Raashi, you are forgetting. Renewables also consists of solar, and this was monsoon period. Yes, 60% for the quarter is correct.

Yes, sir, my first question is on your UAE plans. Can you elaborate on the expansion plan there and overall outlook, as you said, is very positive? What is the full quantum of capex if you're looking at is probably part of consolidated operations and not standalone capex?

So, UAE demand has been quite robust-quite healthy in the last 1 year, if not a little more than that, our assets in UAE are very well positioned to serve all parts of the country, including the main consumer centres of Dubai and Ras Al Khaimah. Our numbers have shown that we are doing very well. And hence, we have decided to put a new mill there of 3 million ton capacity. We have extra clinkers, so had sold clinker earlier. We now believe since the cement demand is very robust. We can convert that clinker into cement and sell it in the domestic market. In addition, in UAE, we also produced some special products like oil well cement and oil well cement from our facilities goes across the world, not only in Middle East, but also in some others of Europe and some markets of U.S., North America. We are also doing debottlenecking of our kiln that will give us about 0.5 million tons of additional income. So overall, we are very positive on UAE market. AED 110 million approximately of capex in UAE. Ashok Bhandari: By the way, I must point out that it is fully funded by cash available at UAE.

My first question, you mentioned on the premiumization benefit which you have approved, which I can read in the numbers, given that Q2 you have delivered around 9% NSR growth, while most of the other companies have delivered 5% to 7%. I believe for H1 also you mentioned 9% was realization growth? On the UAE business, you gave the volume numbers for Q2. Could you share the Q1 number also and the Y-o-Y number for UAE this year, Q1 and last year. And also now that UAE is also delivering performance in line with the domestic operations 20%-plus margins can we look at the company at a consol level rather than looking the two units separately?

It's INR4,854 over INR4,409. 9%. Yes. For H1, also, yes, it's similar at about 9%. Okay. It is flat. So last year same quarter UAE was at 9.87 lakh tons and this year it has been 13.19 lakh tons. That is Q2, So June '25 was 10.09 lakh tons. September '24 was 9.87 lakh tons and September '25 was 13.19 lakh tons. No. That I do not have. I am so sorry. Ashok Bhandari: Indeed, you should. That is what the idea is. That is why I pointed to Cash EPS number. So now onwards maybe a consolidated result for valuation may be more authentic. And more useful than doing standalone.

Sir, first question on the volumes. If you look at 1H, there is a decline of 2%-odd. Just want to understand either industry-wide or in our core markets, what would have been the market industry growth? And just trying to understand what is the market share loss which we have seen? So, sir, should we understand it this way that if you look at even FY '25, our volume of flattish 1Q also, we would have, I mean, it appears that we would have lost market share and from 2Q now we are maintaining and gaining? RMC business, looks like there is a lot of focus here. If you can just share what is the outlook?

So, I would not have the H1 number for industry. But Q2, the best estimates coming is around 3% to 5% cement demand growth. Versus that 3% to 5%, we have done slightly better at 6.8% on cement sales. The first quarter was when we were very firmly trying to establish our value positioning in the market. And therefore, you saw lower than expected growth. But last quarter, I believe, and the best information that I have of market growth versus 3.5% of industry growth, we are slightly ahead on our performance. Ashok Bhandari: Let me just also make one point very clear to you on our value proposition. Consol numbers of INR914 have been reported vis-à-vis our standalone number of INR1,105. If you compare it with standalone, it is INR966 to INR1105. So, the delta which was there in Q1 of INR137 at turn in EBITDA has been slightly bettered. No. Wait a minute. We have not said that we will not remain focused on value. We expect additional demand to come in because of all the fiscal measures announced by the Government of India and that should keep us in line or better than the industry depending on the geographical reach. Neeraj Akhoury: So, just to reinforce that there is no change in the strategy, this is what we would like to keep reinforcing, yes. So, it is value over volume. Having said that and you have seen that in the results when we say 9% realization growth over last year and then you should compare it with the industry numbers and I am sure you will find that we have not done badly. At the same time, while delivering 9% realization growth, we have also delivered 6.8% volume growth. It only means that the strategy has started working. So, RMC is a new business for us. We have just started a year back. Yes. Already about 24 plants are operational. I think this is one of the fastest ramp up of RMC business in this industry. We had an initial goal of going up to 40 plants by FY '28 and that continues even today. We are trying to put up more plants. I am so sorry, not FY 28, FY 26.