Understood. That's very clear. Just one last question now on the Q4. So I see that the purchase of traded goods is a bit elevated in this quarter. Is it some kind of earlier, I remember some coal was sold overseas is something similar -- this quarter?
It must be similar. I'll check and let Mr. Jajoo or Mr. Jain respond on that. You please appreciate that I do not go into such detailed analysis of numbers. If you need or if you can wait, send a mail to us, and we will reply you accordingly, but it should be in line with the trend.
Mr. Akhoury, my first question would be on the branding strategy, you joined Shree Cement about 2.5-3 years ago. So the intent has always been to close the pricing gap with others. Initially, with the different strategies didn't yield the desired results, but last few months, we've seen a change. I just wanted to see what different strategy you adopted now in the past few months. It doesn't seem like it's just withholding volumes because you're seeing the pricing gap in certain markets close with the peers. So what difference have you done in the last few months, which you've been through earlier? And is that strategy different across regions?
I don't think we had described our strategy. And I think you're hearing from us in the last 2-3 quarters call that we are giving lot of push to our premium products, and with a intent that we should improve our brand equity scores. We should create the right brands that makes an impact in the market. That strategy of creating a better brand equity score through several means, including new products, impact on quality, and bringing the right amount of technical work in the field. All that is continuing. It's a journey. And as we find that our brands are becoming more strong, we are pushing for better pricing as well. As I said, this is a journey, and it will take some more time before we really start talking about it that we are one of the best positioned players in the industry. I think Pan India market, the approach will be same in terms of brand equity and improving the brand scores that will be absolutely same. The approach will not be different in different markets. We may have different brands in different markets, but not the approach.
Sir, what is the thought process going forward in terms of expansion. We have 3 million tons, which is deferred and 3 million ton in Kodla, this Bangalore grinding unit. I think last call, you had mentioned that the clearances are awaited. So what is the status on that and the 3 million tons at Rajasthan, which you have deferred? And total capex for FY '26?
As I said, we have announced several locations in India where we're already in the advanced levels of preparedness now to launch an expansion plan as well launch expansion. At the right time, we'll be very happy to share with all of you once we start the work at those sites. Yes [for expansions beyond FY '26 we will be making announcement soon]. About INR3,000 crores [FY26 capex]. Ashok Bhandari: It's about INR3,000 crores.
Sir, just continuing the previous question, just on a directional front, is it fair to say from the average of the fourth quarter, for us, the realization would be our 2% plus kind of Q-o-Q till now on a broader sense? And couple of housekeeping data points: sales mix North/East/South, blended share and capacity utilization region-wise, premium share trajectory, and FY26 depreciation?
My friend, broader sense may give you some kind of a directional picture. It is better, you wait for one more quarter. We come back with firm numbers. What is the point in telling you this and then explaining it is 5% or it is 1%. Let's just be realistic. We have not taken anybody of the garden path. We would like to deliver first and then explain instead of proclaiming first and then explaining. K.K. Jain: Yes, the blended ratio for the quarter is 59%. North India sale is 54.7 MT, East is 32.7 MT and the South is 11 MT. The total is 98.4 MT. It is 72% at the company level and 74% in North, East is 79% and the South is 51%. Ashok Bhandari on premium: Again, you are asking us to proclaim something. Please. We have said that we have set our direction towards this. Let the numbers evolve over the quarters. Listen to me. It is about INR3,000 crores to INR3,200 crores for 25-26 [depreciation]. I have given you depreciation numbers only.
I would like to know our total clinker capacity and total limestone reserves that we have?
We would not like to be very vocal on our limestone reserve. We would certainly point out to you that our first limestone reserves expires in 2046 sometimes. We have sufficient limestone to service all our existing capacities and our new expansions coming up, up to that time for sure, maybe more, we may not like to put a number on our head. Subhash Jajoo: The current clinker capacity is 36.7 million tons and by the end of financial year '25-'26, it will become 44 million tons.
I understand the idea is to maximize cash earnings. And towards this, we saw the management and company did very well shifting towards higher pricing at the expense of volumes in the recent quarters. Now that you have guided for high single digits volume growth vis-a-vis 6.5% to 7.5% for the industry. How are you looking at cement pricing during the year? Are you turning little bearish on cement prices from here on in lieu of you looking to grow faster than the industry?
Mr. Gupta, let me put it like this. You cannot in a supply overhang scenario, enjoy the cake and have it too. Do you have to play an equilibrium between volumes and prices. We have told you we have never aspired to be the number one cement seller in the country. We aspire to be the most profitable cement company in the country. Top line is never in the command of any commodity manufacturer or supplier. We will take whatever the price is. We'll try to maximize profit, cash profit and net profit through a proper mix of volume and price prevailing at that time.
I understand that. I'm trying to understand how to look at industry pricing through the year. We have already seen good pricing trends over the past few months and a lot of capacity is expected to come in the system. So in lieu of that, just trying to understand how to look at cement pricing through the year, nothing related to Shree for that matter?
Mr. Gupta, please appreciate it that nobody sets up a capacity with the hope that he will smash the market share. He will have to fight to get the market share. And if we fight them he really needs very deep pockets. You can't fight without resources. So which is the player we are talking about? What his strategy will be? What region he will be coming into and what kind of financial strength it has, all has to be taken into consideration to understand what his pricing strategy may be. But then please understand that all existing player balance sheets are quite strong and they can take anyone head on as a matter of fact, in matching the prices. Nobody likes to give up market share in our commodity business. So it will be very difficult for us. But having said this, I have a lot of confidence into the growth prospects of the industry and general growth prospects of the country. So I expect the prices should hold and not crash.
Just had a question, data-related question. Could you kind of spell out what was the other operating revenue in the quarter as well as maybe FY '25? Also, like if you could spell out clinker sales also in Q4?
We have INR150 crores of other income... You'll hear from Mr. K.K. Jain. K.K. Jain: Other operating income is included in the revenue. We will give it you offline, please. We will tell you offline, please [clinker sales]. Neeraj Akhoury: It's very, very miniscule.
Sir, my question is more on the cost structure in the three regions. Can you give some color on how the cost stacks up across the three regions, one on manufacturing basis, and secondly, if possible on a delivered cost basis also including freight?
My dear friend, this is Bhandari, here. Of course, these data will be available, and we'll be happy to share, but can you please address my curiosity on your asking such region-specific cost numbers? Please understand as it is the net profit at company level, which is available at surplus with the shareholders. Region you leave it to us, we will set up capacity wherever it is more profitable to us. You must have some faith in our business acumen. We will tell you the overall numbers, please don't ask us questions, which may have strategic importance to us. I very much appreciate it. But please understand that if I'm using my asset side of the balance sheet completely fungible between fixed asset and cash. Any delta in profitability irrespective of region will be incremental to CROCI. So we will be maximizing our CROCI.
Just one question, on a sequential basis, how was pure cement cost moved.
Ashok Bhandari: Come back again, you want cost structure sequentially between December '24 and March '25, Am I correct? Yes, pure cement, I'll give it to Jajoo, he will be able to explain to you. Subhash Jajoo: So we don't have that data readily available. Raashi, I will send it to you, separately. We have blended cost. I have the blended cost with me, which is roughly 2% up quarter-on-quarter, and it is around 3% down year-on-year basis. But you want specifically for cement. So that is not available right now. So blended is up right on a sequential basis. I will just check up and then let you know.
My first question is on volume. We have seen generally industry kind of do high-single digit volume growth off late, but our volume rate still remains in low single digits. So I wanted to understand that what is the outlook now for volume for FY '26, particularly as we are commissioning large capacities in Q1 also?
Let me make it very clear to you. Right after in Q1 '24-'25, we had said that our strategy is not to be the biggest volume player in the industry, but be the most profitable player in the industry. Accordingly, a constant trade-off has been undertaken between price and volumes and since profit reflects in terms of price that is, EBITDA or net profit available to the shareholders. We thought it better to concentrate on profits instead of concentrating on volumes. And you know that it is proven fact that in a capacity overhang scenario, you don't get price and volumes, both. So you have to do a trade-off, come to a cut-off point and see at what volumes you can maximize your profitability because that is the only distributable item in our hands. We don't distribute revenue, we distribute profits. And as far as the volumes for '25-'26 is concerned, Mr. Akhoury has clearly said that we expect 6.5% to 7.5% or 8% growth. I would be slightly more aggressive. I would like to say that we may do about 39 million tons for this year. However, the strategy of trade between volume and profit will be foremost in our minds.
So when we pursue like you're saying the high single-digit volume growth in the target maybe this year, which broadly I understand will be in line with industry. So then is it fair to say that the capacity utilization, whether it stays subdued for you? I mean which we have been seeing this to be in the range of 65%-odd for the last year or so. So then the new expansion also will remain same.
You have to understand the rationale of our capital expenditure or capacity creation. Please understand that the delta between the treasury return, which may be, say, a 10-year G-Sec, and inflation is hardly about 2%. So we are creating an option at 2% for additional capacity because if we get two quarters like January - March, all these option costs are taken care of. So at 2% option, we are creating capacity to see and generally the cement demand should be more vibrant than what we are claiming today. And that is because of the fact that the demand has not been as robust as it should have been in April -- until first week of May, which was because of the war. So we are slightly cautious. Give us some time the demand should pick up. We are positive about it. No growth is possible without cement and steel. So we expect that in 2-3 years' time, we should go back to about 75%-85% capacity utilization.
Second question on the capacity you're creating, especially in North. You have one near Pali and the other one coming up in Etah. I mean, it looks like on the outside similar market, north with the distance of 500 kilometers. But just wanted to understand, data, are you looking to go further central eastern side of UP main and with the Pali one are you looking at maybe going to Gujarat. So what are the target markets you are looking at, because they're both North, but are you looking to get to Central and Gujarat from these markets?
So clearly, even Etah being closer to Agra - it is closer to the Central UP markets as well as some of the East UP markets. And therefore, we will try to use Etah capacity to better our market shares in the very high demand markets of Central and East UP. As far as North plants are concerned, we still have rooms in many of the northern markets, including states like Jammu and Kashmir and states like Gujarat and states like West MP and some other markets as well. So that effort will continue. So both plants will be catering to different markets. But we are excited that we will be entering Central UP and East UP using Etah, as a base, it's a large block. And it will help us to augment our market shares in these markets. Ashok Bhandari added: we putting the Indus water treaty in abeyance. A significant scope exists in creating necessary infrastructure to control the flow of waters. That means much greater demand in North India.
First, some housekeeping numbers. If you could share what was the fuel cost per kCal, trade mix and lead distance? Cement realization? And what is the incentives we have accrued for the full year?
Fuel costs per kCal for this quarter is INR1.48 against INR1.82 of March '24. Lead distance is 446 Km for this quarter against 435 Km for March '24. Trade Share is 73%. It is same for March '24. Cement realization for the quarter is INR 4,768 per ton. Against this December '24, INR4,554. And in March '24, it was INR4,722. The figure [incentives] is not presently available, we will share with you.
Just a question on pricing. So you mentioned that average realization for cement are higher about 5% sequentially. So is it possible to bifurcate that between North and East or give some idea of pricing in these two regions for the industry? And in April how is this spread?
The realization in Northern market, as compared to year-on-year, it is up 3%. For East it is up by 1% and South, it is down by around 5%-6%. And for quarter-on-quarter, the Northern realization is up by 4%, 8% for East and 2% for South. I think it will be better if we discuss this in the next quarterly call.
Sir, recently, there was an update about limestone mines being granted in Jaisalmer. I think just a few days back, there was an exchange notification to that effect. And in the past, I think we have had some mines being procured under auction in Gujarat as well. I believe this one, since you did not mention anything about auctions, I'm assuming it is under the old regime. So my question was, is it fair to assume that in the run-up to 80 million tons, one of those capacities is possible to come up either in Gujarat or in Jaisalmer or both? And what is the net debt as of the end of March '24?
Indeed, the Jaisalmer limestone was awarded to us in 2008 and then it got caught in the quagmire of various legal appeals and counter appeals. Final order has come to us about 10 days back. And it is a part of our expansion strategy. Gujarat, we are working and many other sites we are working. Navin, you know me, we'll keep on updating you at right time. Yes, they are part of our overall expansion strategy for sure. Since when you started using net debt. We have net cash INR5,400 crores roughly.
All your press releases, I understand we'll be setting up something like 50 million tons by FY '26. I just need clarity on that. Correct me if I am wrong, if it is 50 million tons of Shree cement is coming up. I just need to understand by when? And do we have the entire 50 million tons coming by the end of next year or is it staggered to the next year as well?
You have to understand two things. The capacity you are talking about maybe the ballpark number, but then how much of additional clinker and how much of grinding is being set up you have to consider them both separately. K.K. Jain: Our current clinker capacity is 36.7 million tons. And in the current year, that is FY26, the capacity, we are adding is 7.3 million ton. By end of FY'26, the clinker capacity would be 44 million. Same way in the cement capacity, presently, we have 62.8. This includes one unit, which we have started at Etah and another grinding unit at Raipur. And during balance period of FY'26, two new units will come, one at Kodla and another is at Ras- Jaitaran. This would be around 6 million. So the total capacity by FY'26 would be 68.8 million. Ashok Bhandari: Clinker and grinding additional, except whatever has been commissioned, should be done by HY '26.
Just one question on future greenfield expansion, as you can see from limestones looking at Jaisalmer & Kutch. What is the rationale for this? I know you already have multiple lines in Ras, Beawar and you have Nawalgarh also. So that would mean that there is limited potential there for expansion, now that you're expanding out into Jaisalmer. I just want to understand the thought process.
No, no, you are putting the cart before the horse. We have not said that we will not expand in other regions of North. We have just said that Jaisalmer, we have won the mines and it is certainly on our target now to expand. That doesn't mean that I'm not going to expand at Jaitaran or Nawalgarh or any other place where I have limestone. It has to be a constant dynamic study of how the market behaves, how the market evolves and what pricing power and what premium production we can push. Please do not consider our thinking to go to Jaisalmer is because of constraints on the limestone reserves at all other North plants we have. Please don't misconstrue it like that. We have space. Jaisalmer is a virgin area. How much market we can establish there profitably? What kind of lead distances will be there? All these are under study. But since we have got a limestone, which is really a difficult resource to get nowadays, we have taken it in our strategic plan process. And someday, we will come up with a concrete plan of setting up in Jaisalmer.
What is our clinker capacity utilization for the whole year? And if I see from past few years, 3 years, our capacity utilization has actually declined when other larger players are doing actually 70%, 75%, 80% of capacity utilization in our key market regions. So again, on top of that, we are adding more capacity. But if in case we are not much focused on the volume in terms of higher capacity utilization, how it is going to help more in the profitability? And what is the non-trade mix this time?
Subhash Jajoo: Yes. For the full year, the clinker capacity utilization is around 68%. And for this quarter, it is 73%. Ashok Bhandari: This is Bhandari here. Number one, there is a presumption in your entire premise that India will not grow or cement demand will not grow. That is the underlying -- because if it is going to grow, then everybody's top line will grow, mine too. The difference between everybody's growth in top line and our growth in top line is we don't want to be highest volume producers. We want to be the highest profit makers, which we have proven in spite of falling capacity utilization or whatever. So please understand that our top line will grow in consonance with growth in market. We will not be laggards. We may be slightly ahead of setting up capacity, but then please understand we don't borrow. We utilize our own cash resources to set up capacities, we are the lowest cost capacity creators. KK Jain: Trade 73%, Non Trade 27%.
Sir, my question pertains to RMC business. So what is the current status of RMC business, how many plants we have set up or going to set up? And what kind of revenue we are expecting from this particular business?
As we have mentioned earlier also that RMC is a new foray for us. It's about a year or so that we have started this division for us. We are currently operating about 15 plants, but the plan is to grow RMC rapidly. At this moment, we are looking at various markets where more and more units will be set up. And this process will continue. I'm happy to say that there are several plants in our RMC division, which are already EBITDA positive, they have achieved in a faster ramp-up of those units, especially in the markets of Mumbai or markets of Hyderabad. And this will continue. So we expect that over a period of time, we will have at least 50-odd RMC units. But at this moment, I will not be in a position to tell you the time lines for that.
Sir, I just wanted to know the rail-road rate mix for Q4 and full year and pet coke mix also. And I wanted to ask the status of railway sidings, which we talked about in first quarter, we are going to cover all the units with railway sidings. I think FY '25, we are targeting Purulia and Patas.
Yes. The rail percentage is around 11.3% for this quarter. And for full year, it's 11.8%. In regard to the pet coke percentage, it is 78% pet coke and the rest is coal and the alternate fuel. Full year is almost 18% is the coal and alternate fuel and the rest is pet coke, it's around 82%. Purulia has already been done. Ashok Bhandari: Purulia has already been done. Patas also commisioned. Both are fully operational. And the rest sidings, I think we have said by mid-'27 or early '28 will be done.